• Leave and License Agreement and Lease Agreement

1) What is the difference between the Leave and License and Lease agreement

2) In practice, i see people using 3 x 11 months Leave and License agreement instead of a single 33 month agreement. What is the idea behind that?

3) If a lease agreement is unregistered and if a dispute arises of the terms in it. What has to be process followed by the property owner (Lessor).

4) Under any circumstance can a Leave and License agreement be interpreted as Lease agreement in the eye of law based on the presence or absence of any terms?
Asked 6 years ago in Property Law
Religion: Hindu

7 answers received in 1 day.

Lawyers are available now to answer your questions.

12 Answers

1. No consideration passes in L& L agreement or in other words it is permissive occupation but in lease it is made in lieu of rent.

2. It is made to avoid lease hold rights in the premises.

3. In many states like in WB there is concept of leave and license agreement and whether it term it as leave and license or not then same would be regarded as leaseonly.

Basically the absence of rent makes an agreement leave and license.

Devajyoti Barman
Advocate, Kolkata
22779 Answers
484 Consultations

5.0 on 5.0

What is the difference between the Leave and License and Lease agreement ?

A license is a personal right granted to a person to do something upon immovable property of the grantor and does not amount to the creation of interest in the property itself. It is purely a permissive right and is personal to the grantee. It creates no duties and obligations upon the persons making the grant and is, therefore, revocable except in certain circumstances expressly provided for in the Act itself. The license, when granted, has not other effect to confer liberty upon the licensee to go upon the land which would otherwise be lawful.Under license agreements, the legal ownership and the possession of the property remain with the licensor. Under a lease agreement, the tenant generally has exclusive possession with respect to the property. In other words, a license does not create any interest in the premises in favor of the licensee.

A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

Primary distinctions between Lease and Licence:

1. A lease is a transfer of an interest in a specific immovable property, while licence is a bare permission, without any transfer of an interest.

2. A lease creates an interest in favour of the leassee with respect of the property, but a licence does not create such an interest.

3. A lease is both transferable and heritable, a sub tenancy can be created by the tenant and on the death of the tenant, the tenancy can be inherited by his/her legal heir, whereas, licence is neither transferable nor heritable.

4. A licence comes to an end with the death of either the grantor or the garantee, since it is a personal contract, but a lease does not comes to an end on either the death of the grantor or grantee.

5. A licence can be withdrawn at any time at the pleasure of the grantor but the lease can come to an end only in accordance with the terms and condition stipulated in the contract of tenancy agreement.

6. A lease is unaffected by the transfer of the property by sale in favour of a third party. It continues and the purchaser has to wait till the time period for which the tenancy was created is over before he can get the possession, whereas, in case of a licence, if the property is sold to a third party, it comes to n end immediately.

7. A lessee has a right to protect the possession in his own right. Whereas, a licencee cannot defend his possession in his own name as he does not have any proprietary right in the property.

8. A lessee in possession of the property is entitled to any improvements or accessions made to the property, while a licencee is not.

License does not allow any interest in the premises on the licensee's part. It merely gives the licensee the right to use and occupy the premises for a limited duration.A lease deed needs to be stamped and registered. The amount payable towards the lease deed's stamp duty is more than that payable towards the Leave and License's. For a period exceeding three years, the stamp duty is same for both agreements.

Ajay N S
Advocate, Ernakulam
4072 Answers
110 Consultations

5.0 on 5.0

The reason apartments/ house/flats are often licensed for 11 months is that it allows the licensor to remove the tenant with minimum notice, as the Rent Control Act does not apply to agreements of less than 12 months. This notice period will be stated in the contract and is usually agreed upon by both parties. Lease agreements give greater rights to tenants, which property owners aren’t comfortable with.Firstly, it gives tenants the right to occupy the property rented for a longer duration. A license, however, gives the tenant the right to merely use the property for a limited time only, thereby ensuring regular renewal of the terms. This regular renewal protects the interest of the property owner, which a lease does not do. Lease agreements potentially encourage tenants to permanently occupy the premises, giving them an interest in the property. Under such circumstances it can be difficult for the landlord to evict the tenant.

Ajay N S
Advocate, Ernakulam
4072 Answers
110 Consultations

5.0 on 5.0

Under leave and license agreements, the legal ownership and the possession of the property remain with the licencor.

Under a lease agreement, the lessee generally has exclusive possession with respect to the property. In other words, a license does not create any interest in the premises in favor of the licensee.

2) registration of lease agreement is mandatory otherwise it would not be admissible in evidence

3) whether leave and licence agreement operates aslease agreement is not dependent on nomenclature used but upon the terms of agreement

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

1. leave and license gives only a license for certain period thereafter licensee has to leave. it does not give any right to live there after lapse of license period.

2. in the case of lease the lessee has right to enjoy the leased property for certain period and after lapse of that period he can enjoy the property till the removal of any structure, compensation regarding any expense incurred by lessee etc... means a lessee has right under section 105 TP Act to retain the leased property till the discharge of any liability of lessor.

3. in leave and license the licensee has no such right, he is bound to leave the premises immediately after lapse of license period.

Shivendra Pratap Singh
Advocate, Lucknow
5127 Answers
78 Consultations

4.9 on 5.0

1. A leave and license agreement does not create any interest in favour of the licensee. On the expiry of the license the licensee has to vacate the premises, whereas a lease is a transfer of an interest in a specific immovable property in favour of the lessee.

2. If the duration of the agreement is more than 11 months than registration becomes mandatory, to circumvent which the duration is kept at 3*11 months.

3. If the lease deed is not registered then it is inadmissible in evidence.

4. The language used in the agreement would be determinate of whether it is leave and license or lease.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

An agreement of 11 months is not required to be registered and therefor 11*3, so that people don't have to pay the court fee.

Leave and License agreement can be interpreted as Lease agreement as anyways it has the terms of the lease agreement.

regards

Anilesh Tewari
Advocate, New Delhi
18077 Answers
377 Consultations

5.0 on 5.0

1. It is not an issue if the terms of evictions are clear Sir.

2. Generally it should not be done, even if you purchase the stamp before it should be notarized on the day when the agreement is being entered upon.

3. If a lease agreement which is for more than 11 months is not registered then it is not a valid agreement and in that case your tenancy will be considered as that of a month to month tenancy.

Regards

Anilesh Tewari
Advocate, New Delhi
18077 Answers
377 Consultations

5.0 on 5.0

Since in WB there is no concept of leave and license the same will be considered s lease only and on expiry of lease you can file eviction suit which would be guided by WBPT Act or TP Act depending upon the amount of rent.

Devajyoti Barman
Advocate, Kolkata
22779 Answers
484 Consultations

5.0 on 5.0

1) going in for lease deed is safe option provided the lease deed is duly stamped and registered

2) it is mandatory to register lease deed

3) un regd lease deed is inadmissible in evidence

4) stamp paper has to be in name of parties and has validity period of 6 months

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

Under license agreements, the legal ownership and the possession of the property remain with the licensor. Under a lease agreement, the tenant generally has exclusive possession with respect to the property. In other words, a license does not create any interest in the premises in favor of the licensee.

A licensee cannot give the premises on rent to a third party under any circumstances. On the other hand, a tenant can sub-let the premises to a third party, unless the rental agreement expressly provides otherwise.

c) A license agreement is easier to terminate than a rent agreement. License agreements are terminable, whereas lease agreements are generally not.

d) The amount payable towards stamp duty is more for a lease agreement as compared to a leave and license agreement. But for duration of more than three years, the stamp duty payable is the same for both.

e) In the case of a lease agreement, if the agreement is for a period of less than 12 months, it does not have to be registered. However, a lease agreement for 12 months and beyond has to be compulsorily registered. In many states, a license agreement does not have to be registered.

In the case of a lease agreement, if the agreement is for a period of less than 12 months, it does not have to be registered. However, a lease agreement for 12 months and beyond has to be compulsorily registered. In many states, a license agreement does not have to be registered.

The unregistered lease agreement is not valid in law for solving any legal disputes.

Leave and license agreeent is different to that of the lease agreement.

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

The conditions in the lease agreement is to be carefully drafted so that it will not create any problem at a later date.

Yes it can be done

Unregistered lease agreement cannot be enforced in the court of law.

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer