When it comes to renting a property, the agreement between the landlord and the tenant is an essential element. Typically, the agreement is either registered or notarized. While both types of agreements serve the same purpose, there are significant differences between them that need to be understood before signing any rental agreement.
A registered rent agreement is an agreement that is registered under the Indian Registration Act, 1908. This act mandates the registration of any document that transfers an interest in an immovable property. A registered agreement is legally binding and enforceable in court. It is also considered a legal proof of tenancy. The registration process involves payment of a stamp duty and registration fees based on the property`s location and agreement`s tenure and value. After registration, the parties are given a copy of the agreement, which serves as proof of registration. The process of registration is time-consuming.
A notarized rent agreement, on the other hand, is a rent agreement that is verified and signed by a notary public. Notary publics are appointed by the government to witness and verify the signing of legal documents such as rent agreements. Notarization is a quick process that involves the verification of the identity and signature of the parties. It is not mandatory to pay any stamp duty or registration fees for notarization. However, notarized agreements are not legally binding and enforceable in court.
The primary difference between a registered rent agreement and a notarized rent agreement is their legal validity. The registered agreement is legally binding and enforceable in court, while the notarized agreement is not. Additionally, a registered agreement serves as legal proof of tenancy, while a notarized agreement does not suffice as proof of tenancy.
Another crucial aspect to consider is the cost involved in registering or notarizing a rent agreement. The cost of registering a rent agreement is higher than notarizing a rent agreement. However, registering your rent agreement gives legal protection to the landlord and the tenant. In the case of a dispute, the registered agreement will be the primary evidence of the tenancy`s terms and conditions.
In conclusion, while both registered and notarized rent agreements serve the same purpose, they have significant differences in their legal validity and cost. A registered agreement is the recommended option for both landlords and tenants, as it offers legal protection and serves as legal proof of tenancy. A notarized agreement may be a cheaper and quicker option, but it lacks the legal protection provided by a registered agreement.