Subordination, Non-Disturbance and Attornment Agreement (SNDA)

ਸਟਾਂਪ ਡਿਊਟੀ

This Agreement is, in substance, a tri-party contractual consent and set of undertakings between the Tenant, the Landlord and the Lender — it does not itself create, transfer, subordinate in the sense of legally re-ranking, or extinguish any right, title, charge or interest in the Premises. The Mortgage referred to in clause 2 is what actually creates the Lender's security interest, and the Lease referred to in clause 1 is what actually creates the Tenant's leasehold interest; this Agreement is the parties' consent about how those two pre-existing interests are to interact, not a fresh transfer of either. Because of that, this Agreement is less likely to attract the ad valorem stamp duty that a lease, a mortgage or a conveyance attracts, and is more likely, if it is chargeable at all, to fall at most within the residuary or nominal categories this library's other tenant-facing letters describe — but that is this drafter's reasoning from the general scheme of the Indian Stamp Act, 1899, not a rate taken off a published table, and it should not be assumed either way. Confirm, before this Agreement is signed, whether Punjab or Chandigarh treats an agreement of this specific kind — a tenant's subordination and attornment consent given to a lender — as chargeable under a residuary agreement article, under a specific article for a document of this kind if either state has one, or as not separately chargeable at all; see lawyerShouldCheck, which does not resolve this either way rather than guess at it. Whatever the answer for THIS Agreement, it does not change the separate, ordinary stamp duty the Mortgage attracts as a mortgage, or that the Lease attracted (or ought to have attracted) as a lease — each of those is dealt with in its own instrument, and this Agreement does not substitute for either.

ਰਜਿਸਟਰੀ

For the same reason given under Stamping, this Agreement is unlikely to be an instrument section 17 of the Registration Act, 1908 reaches on its own account: it does not itself create, declare, assign, limit or extinguish a right in immovable property of the kind that section targets, but rather records the parties' consent about the priority and continuity of two other interests that carry their own, separate registration positions. The Mortgage's own registration position is a separate and real question this Agreement does not answer. A mortgage other than a simple mortgage effected by deposit of title deeds is compulsorily registrable under section 17(1)(b) read with the Transfer of Property Act, 1882 provisions on the particular kind of mortgage created, and the Landlord and the Lender should confirm the Mortgage's own registration was, or will be, properly attended to — this Agreement does not cure a gap in that if there is one. The Lease's own registration position is likewise separate. A lease for a term exceeding one year, or reserving a yearly rent, is compulsorily registrable under section 107 of the Transfer of Property Act, 1882 read with section 17(1)(d) of the Registration Act, 1908, and section 49 of that Act keeps an unregistered lease of that kind out of evidence of its own term and rent. If the Lease identified in clause 1 should have been registered and was not, the Lender's whole reliance on that Lease as security for its loan rests on a document that may not itself be provable in the way clause 1 assumes — see lawyerShouldCheck. If any party nonetheless wants this Agreement registered out of caution, present it in Punjab to the Sub-Registrar of the tehsil in which the Premises lie, via igrpunjab.gov.in, and in Chandigarh to the Sub-Registrar, 30 Bays Building, Sector 17, via revenue.chd.gov.in.

ਨੋਟਰੀ

Not required by law, and this Agreement takes effect once all three parties sign it. Notarisation is optional; given that the Lender is very often the party relying most heavily on this Agreement to protect a completed disbursement, and given that the Tenant and the Landlord are not otherwise before the same registering authority together, a notarial record of who actually signed and when is independent evidence worth having, though it does not cure a stamp duty shortfall and does not make the promises in clauses 3 to 6 any more or less binding on their own terms.

ਗਵਾਹ

Not compulsory, in either jurisdiction, for an agreement of this kind — it is not a lease, a mortgage, a conveyance or a will, and because it is not ordinarily presented for registration, the qualification Chandigarh applies to the first witness on a deed it does register (paragraph 127, Punjab Registration Manual) has no bearing here. Two witnesses are still provided for below, because this Agreement typically survives for years — as long as the Lease and the Mortgage both remain on foot — and a witness who can be produced later is worth more in a dispute about what was actually signed, and when, than the wording of any clause.