Leave and License

Leave and license agreement is an agreement where the licensor allows the licensee to occupy the premises temporarily for residential or business purpose.

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Leave and license agreement is an agreement where the licensor allows the licensee to occupy the premises temporarily for residential or business purpose. The licensor grants the license to the licensee for a minimum period of 11 months. In return, the licensee has to pay a fixed amount decided by the licensor and licensee in the agreement. It is mandatory to register the agreement before the sub-registrar of assurances at the place of jurisdiction where the property is located.

The Indian Easement Act, 1882 governs the leave and license agreement. It is different from a lease or rental agreement. In the case of leave and lease agreement, the owner gives the premises with various facilities to use for a particular time. The agreement is temporary and therefore, the licensee is not allowed to make the significant alterations in the property. The licensee is prohibited for using the premises for other activities than what is initially mentioned in the agreement. In some cases, a large amount is paid to the owner, and after that, no monthly rents are necessary to be paid.

It is a contract between the property owner and tenant which includes the terms and conditions mainly regarding the following things -

  • Date of Agreement
  • Period of Agreement
  • Deposit and monthly rent
  • Use of premises
  • Maintenance & other charges, etc.

The Leave and License agreement has the following properties:-

  • No transfer of interest is created from owner to tenant
  • No property rights shall be created
  • Participating individuals can contractually determine the amount due as License fee, deposit and other charges
  • The typical duration of the contract is eleven months
  • Owner maintains higher freedom and rights when it comes to cancellation and eviction of the tenant

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