Leave and License Agreement — Overview
A leave and license agreement grants the licensee permission to use the property without creating a tenancy or leasehold interest. Under Section 52 of the Indian Easements Act, 1882: a license is personal permission — revocable by the licensor. This is the most common arrangement for residential and commercial occupancy in India — preferred over lease because it avoids Rent Control Act protections for the occupant.
Specimen Leave and License Agreement
[11-month format — most common in India]
LEAVE AND LICENSE AGREEMENT
This Agreement is made on [Date] at [City]
BETWEEN:
[Licensor Name], [Address] (the "Licensor") AND [Licensee Name], [Address] (the "Licensee")
TERMS
1. Licensed Premises: The Licensor grants the Licensee a license to use [Property Description — flat/office/shop at Address, area, floor] (the "Licensed Premises") for [residential/commercial] purposes.
2. Term: [11] months from [Start Date] to [End Date]. Renewable by mutual consent for further periods of [11] months.
3. License Fee: Rs. [Amount] per month, payable on or before the [5th] of each month by [cheque/NEFT/UPI].
4. Escalation: [X]% increase upon each renewal.
5. Security Deposit: Rs. [Amount] (interest-free, refundable on vacating in good condition, after deducting unpaid fees and repair costs).
6. No Tenancy: "This Agreement is a License and does NOT create any tenancy, leasehold, or any interest in the Licensed Premises in favor of the Licensee."
7. Use: Exclusively for [residential/commercial — specify]. No sub-licensing without consent.
8. Maintenance: Licensor: structural repairs, property tax. Licensee: daily maintenance, utilities, minor repairs, society maintenance.
9. Termination: (a) Expiry of term. (b) By either party with [1/2] months' notice. (c) By Licensor immediately for: non-payment (2 consecutive months), misuse, nuisance, illegal activity.
10. Handover: On termination: Licensee vacates within [30] days and delivers vacant possession. Deposit refunded within [30/60] days after deductions.
11. Governing Law: Laws of [State]. Jurisdiction: courts at [City].
IN WITNESS WHEREOF the parties have executed this Agreement on [Date].
LICENSOR: [Signature] | LICENSEE: [Signature] | WITNESSES: 1. ___ 2. ___
Registration
Maharashtra: MANDATORY registration of ALL leave and license agreements (Section 55, Maharashtra Rent Control Act, 1999) — regardless of duration. Other states: Registration mandatory only if term exceeds 12 months (Registration Act Section 17(d)). For 11-month agreements in most states: registration is optional but recommended. Stamp duty: varies by state — typically 0.25% of total license fees in Maharashtra; nominal in other states.
Disclaimer: This article is for informational purposes only and does not constitute legal or professional advice. While every effort has been made to ensure accuracy based on the latest laws and amendments, readers should consult a qualified professional before acting on any information provided. For expert assistance, contact us.
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❓ Frequently Asked Questions
Why is the 11-month term commonly used?
The 11-month term is used to: (1) AVOID mandatory registration under the Registration Act (Section 17(d) — leases exceeding 1 year require registration), (2) AVOID Rent Control Act protections that attach to longer tenancies, (3) keep the arrangement FLEXIBLE — renewal by mutual consent for successive 11-month periods. However: in MAHARASHTRA, registration is mandatory even for 11-month agreements. Also: courts look at SUBSTANCE — if the arrangement involves repeated renewals creating a continuous occupation: courts may treat it as a lease despite the 11-month term.
What is the difference between license fee and rent?
Legally: LICENSE FEE is the payment for permission to use property under a license (no tenancy). RENT is the consideration for a lease (creating tenancy). The distinction matters because: (1) 'rent' may trigger Rent Control Act protection (rent control, eviction restrictions), (2) 'license fee' does not create tenancy rights. In practice: the monetary amount may be the same — the legal characterization depends on the overall arrangement (license vs lease). Always use 'LICENSE FEE' in leave and license agreements — never 'rent' — to maintain the license characterization.
Must this agreement be registered in Maharashtra?
YES — Section 55 of the Maharashtra Rent Control Act, 1999 mandates registration of ALL leave and license agreements — regardless of duration (even 11-month agreements). Non-registration: (1) the licensor is liable to a FINE, (2) the agreement may not be enforceable against the licensee, (3) the licensee may claim tenancy rights. Registration: at the Sub-Registrar's office with stamp duty (0.25% of total license fees + deposit in Maharashtra). Other states: registration is mandatory only for agreements exceeding 12 months.
What stamp duty applies on leave and license agreements?
Varies by state: MAHARASHTRA: 0.25% of (total license fees for the entire period + refundable deposit). Example: 11-month agreement, Rs. 25,000/month, Rs. 2 lakh deposit: stamp duty = 0.25% × (Rs. 2,75,000 + Rs. 2,00,000) = Rs. 1,187.50. DELHI: 2% of average annual rent. KARNATAKA: Rs. 100-500 (nominal). TAMIL NADU: 1% of annual rent. Always check the state-specific stamp schedule. E-stamp certificates are recommended — available online through SHCIL.
Can the licensor evict the licensee before the term expires?
YES — unlike a lease (where eviction requires specific grounds under Rent Control Act): a license is REVOCABLE by the licensor. However: (1) the licensor should follow the NOTICE provisions in the agreement (typically 1-2 months' notice), (2) immediate termination is available for CAUSE (non-payment, misuse, nuisance, illegal activity), (3) the licensor should NOT use FORCE — if the licensee refuses to vacate: the licensor must file a suit for eviction (or in Maharashtra: apply to the Competent Authority for fast-track eviction), (4) the SECURITY DEPOSIT must be refunded after deductions.
