Registered Agreement or Notarized Agreement

How many of you are aware of the basic difference between Registered and Notarized Agreement?

In this post, we will try to cover definitions of both and try to explain which one is better in the eyes of law. First of all we should know what exactly each one means.

Notarized Agreement:

A Notarized Agreement is an Agreement that is attested by a Notary Public. The Notary public only verifies the identity of the Licensors and the Licensees signing the agreement and stamps the agreement as “Signed Before me”.

The Notary does not check the clauses and conditions of the agreement, but only verifies the identity of the Licensor and Licensees

A Notarized agreement has the stamp (signed before me), seal and sign of a Notary on the last page of the agreement.

Registered Agreement:

An Agreement that is signed before and scanned with the Government’s Registrar office is a registered agreement. This process is conducted and concluded with the office of Sub Registrar for a particular area.

It requires all Licensors(or PoA holder) and Licensees to be present at the time of execution of document.

The Registrar or the Sub-Registrar usually checks the entire document and verifies the stamp duty and Registration Fee paid via E-Challan. He also checks if the PoA holder is duly authorized and has appropriate powers to sign and register the agreement on behalf of the owner. Once the Registrar or Sub-Registrar is through with all the above things, the same agreement is then Registered by allotting a unique Registration Document Number along with thumb impression and stamp of SRO, Receipt of Payment and Index-2 of Licensed Premises

A registered document becomes a public document and can be accessed in accordance with the legal procedures.

Now the question arises which one is best suited for either the Licensor or Licensee?

“As per the Registration Act, 1908, clause (d) of sub-section (1), registration of the property that is on lease for one year or more than a year is compulsory” Its for this reason only that most of the Rental Agreements are for a period of 11 months only to evade Stamp duty and Registration Fee. Now, in case a Rent Agreement is Notarized for 11 months only then its not illegal as it will be accepted by Society as well as Police for carrying out tenant Police Verification. This means that a Notarized Agreement of 11 months is all what is needed to rent out a flat but what happens if there is some dispute between the parties and the matter is taken to court of law. In the court of law, a Registered Leave and License Agreement takes precedence over Notarized Agreement and there are most changes that the judgement will be given in favor of Licensor if the Licensee is breaching some important clauses of Agreement. Having said that such things come into play when things turn into legal battle and then owners realize to have a Registered Leave and License Agreement to safeguard their interest.

This implies that the benefit is entirely for Licensor to safeguard their interest then why should a Licensee agree for registered Agreement?

Licensee needs it for following reasons:-

Buy or transfer a vehicle in Maharashtra: RTO accepts Registered Agreement as address proof only while  passing the vehicle

Apply for a new Passport in Maharashtra: Passport office accepts local address proof in the name of Registered Rent Agreement only

Claim HRA deduction in Income Tax: many reputed companies stipulate their employees attach copies of registered agreements when claiming HRA.

Be it change in Address of Aadhar, Issuing Birth or  Marriage Certificate in Maharashtra all require address proof in form of Registered Agreement only. Notarized Agreement aren’t accepted as local proof of Address by any Govt. Institution in Maharashtra.

Hope that with this post you may be able to distinguish between Registered and Notarized Rent Agreement and which one is best suited according to your needs. For any queries, please comment below and we will try to solve most of your queries.

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