As housing demands evolve, so do the agreements that govern property rentals. The Leave and License Agreement stands out as a practical option for those requiring temporary accommodation without the long-term commitments of standard leases. Exploring this agreement can offer valuable insights into more flexible rental arrangements.
What is a Leave and License Agreement?
A Leave and License Agreement is a legal contract in which a property owner (the licensor) allows another party (the licensee) to use their property for a specified period, without transferring ownership.
Unlike lease agreements, which confer a property interest to the tenant, a leave and license agreement does not create any ownership or interest in the property. This is particularly common in the residential rental market, while commercial leases are typically used for longer-term arrangements.
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Documents Required to Register a Leave and License Agreement
- Identity Proof: Aadhar Card/ Passport Copy/Voter ID
- Address Proof: Utility Bills/ Aadhar Card
- Property Ownership Proof: Title Deed/ Sale Deed
- Photographs: Recent Passport-Sized Photos of Both Parties
- Stamp Duty: Receipt of Paid Stamp Duty
- Notarisation: Notarised Signatures of Both Parties (if required by state laws)
Also Read: Check the list of documents that you need to apply for home loans.
How to Register a Leave and License Agreement Online?
| Step | Action |
|---|---|
| 1. Visit Official Website | Access the official portal of the concerned authority for online registration. |
| 2. Create an Account | Register on the portal to begin the registration process. |
| 3. Fill Out Agreement Form | Complete the online form with all relevant details and terms of the agreement. |
| 4. Upload Supporting Documents | Scan and upload required documents, such as identification and address verification. |
| 5. Pay Stamp Duty | Pay the stamp duty online using secure payment options provided on the portal. |
| 6. Verification and Approval | Wait for the documents to be verified and for the registration to be approved. |
| 7. Receive Digital Copy | Once approved, download the digital copy of the registered agreement and the acknowledgment receipt. |
How to Register a Leave and License Agreement Offline?
| Step | Action |
|---|---|
| 1. Draft Agreement | Create a clear agreement with mutually agreed terms and conditions. |
| 2. Visit Sub-Registrar Office | Go to the nearest Sub-Registrar Office to initiate the registration process. |
| 3. Pay Stamp Duty | Pay the required stamp duty based on the agreement’s value. |
| 4. Submit Agreement | Submit the signed agreement along with necessary supporting documents. |
| 5. Provide ID & Address Proof | Include identification (Aadhar, passport) and address proof documents. |
| 6. Sign in Presence of Sub-Registrar | Both parties sign the agreement before the Sub-Registrar for validation. |
| 7. Receive Registered Agreement | Obtain a copy of the registered agreement and acknowledgment from the Sub-Registrar. |
Sample Leave and License Agreement PDF
https://efilingigr.maharashtra.gov.in/ereg/downloadstuff/LAndL.pdf
Things to Note Before Signing a Leave and License Agreement
- Understand all clauses, including rent, security deposit, and responsibilities.
- Verify that the property matches the description in the agreement through a detailed inspection.
- Be aware of the required notice period for termination and the eviction procedures.
- Ensure the correct stamp duty has been paid and is documented in the agreement.
- Officially register the agreement at the local Sub-Registrar’s Office to ensure its legal validity.
- Confirm that witnesses are present and have signed the agreement.
- Consult a lawyer if you have any questions or concerns about the agreement’s terms.
Benefits of Leave and Licence Agreement
- Easier Eviction: Landlords can evict tenants more easily without lengthy legal battles.
- No Property Rights Transferred: Tenants do not acquire any property rights, ensuring no claims beyond the agreement terms.
- Exemption from Rent Control Laws: Falls under the Indian Contract Act, avoiding Rent Control Act restrictions that favor tenants.
- Shorter Tenure: Typically for shorter periods (like 11 months), giving owners greater control over the property.
Difference Between Lease and Leave and Licence Agreement
| Aspect | Lease Agreement | Leave and Licence Agreement |
|---|---|---|
| Possession Rights | Grants the tenant exclusive possession of the property, creating a property right. | Provides permission to occupy the property without transferring any possession or ownership rights. |
| Transferability | Tenants can transfer or inherit the leasehold interest. | Licensee cannot transfer or inherit any interest in the property. |
| Interest in Property | Transfers a leasehold interest to the tenant. | Does not transfer any interest in the property to the licensee. |
| Tenure Period | Can be fixed (e.g., 1 year, 5 years) or in perpetuity. | Typically short-term, usually up to 11 months. |
| Stamp Duty | Requires higher stamp duty based on the lease agreement value. | Generally involves lower stamp duty compared to lease agreements. |
| Registration Requirement | Mandatory registration for agreements exceeding one year. | Does not require registration unless the agreement exceeds 11 months. |
| Legal Protection | Provides stronger legal protection to the tenant under rent control laws. | Offers limited legal protection as it falls under the Indian Contract Act, avoiding rent control restrictions. |
| Termination Process | More stringent termination conditions, often requiring substantial notice or cause. | Easier to terminate with minimal notice as per the agreement terms. |
| Renewal Terms | May include provisions for automatic renewal or renegotiation at the end of the lease term. | Typically does not include automatic renewal, emphasizing its temporary nature. |
| Usage Flexibility | Limited flexibility due to longer commitment periods and binding terms. | Greater flexibility for both parties, allowing for short-term occupancy and easier modifications to terms. |
Conclusion
A Leave and Licence Agreement offers a flexible and straightforward approach to property occupancy, benefiting both licensors and licensees in various scenarios. However, it’s essential to weigh the advantages against the potential drawbacks and ensure that the agreement is legally sound. By understanding the key features and differences from traditional lease agreements, you can make informed decisions that best suit your housing needs and property management goals.
Frequently Asked Questions
A lease agreement transfers possession of the property to the tenant for a longer period (typically for a year or more) and creates property rights, whereas a leave and license agreement only grants permission to occupy the property for a short period (usually 11 months), without any property rights.
A leave and license agreement is not mandatory to be registered unless it exceeds 11 months in duration. If the agreement is for 12 months or more, it must be registered under the Registration Act of 1908.
Yes, a landlord can terminate the agreement before the agreed term ends by providing a notice as per the terms mentioned in the agreement. Typically, a notice period of 1-2 months is required.
If the tenant does not vacate the property after the agreement term expires, the landlord can initiate legal proceedings for eviction. However, the leave and license agreement typically makes eviction easier compared to other rental agreements.
No, in most leave and license agreements, tenants are not allowed to sub-let the property. The agreement usually specifies that the tenant cannot transfer the license to any other person without the licensor’s prior consent.
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