1. Legal Definition of a Leave and License Agreement

• Governed by the Indian Easements Act, 1882, the agreement grants restricted rights to use the property.
• The landlord retains ownership and can revoke the tenant’s permission at will.
• Preferred for short-term arrangements (e.g., 11 months).

2. Key Features of a Leave and License Agreement

• No Ownership Transfer: The tenant cannot claim ownership of the property.
• Temporary Arrangement: Commonly valid for 11 months.
• Clear Roles: Obligations and penalties are outlined, ensuring maintenance of the premises.
• Termination Flexibility: Can be revoked by mutual consent with prior notice.

3. Differences: Leave and License vs. Rental Agreement

| Aspect | Leave and License Agreement | Rental Agreement |
|-----------------------------|------------------------------------------------|------------------------------------------|
| Governing Law | Indian Easement Act, 1882 | Rent Control Act, 1948 |
| Ownership | Tenant has no ownership claim | Tenant can claim ownership after 10+ years |
| Duration | Short-term, typically 11 months | Longer-term; often exceeds 12 months |
| Eviction Rights | Landlord-friendly, easy eviction process | Tenant-friendly, eviction more difficult |
| Payment Terms | One-time or periodic license fee | Monthly rent and deposit |

4. Advantages of a Leave and License Agreement

• Flexibility for Landlords: Property ownership and control remain intact.
• Limited Tenant Rights: Protects landlords from disputes under the Rent Control Act.
• Cost Savings: Agreements under 12 months avoid higher registration costs.

5. Format of a Leave and License Agreement

Key clauses to include:
1. Party Clause: Names and addresses of landlord and tenant. 2. Definitions Clause: Clarifies terms (e.g., license fee, premises). 3. Premises Clause: Details the property (location, size, purpose). 4. Duties and Responsibilities:
- Tenant: Maintenance, restricted use, no modifications. - Landlord: Ensure safety and usability of the property. 5. Payment Terms:
- License fee, deposit, and payment schedule. 6. Termination Clause: Notice period and mutual agreement terms. 7. Dispute Resolution: Arbitration or court jurisdiction.

6. Why Use an 11-Month Leave and License Agreement?

• Avoids registration under the Registration Act, 1908, saving stamp duty and registration fees.
• Ensures flexibility for renewal or termination after the term ends.

7. Rights of Tenants and Landlords

• Leave and License Agreement:
• Landlord retains control; tenant has temporary usage rights.
• No structural changes or long-term occupancy allowed.
• Rental Agreement:
• Protects tenants under the Rent Control Act.
• Tenants have greater rights, including long-term occupancy protection.

8. FAQs

Q1: What does “Leave and License Agreement” mean?
A: It gives the tenant (licensee) the right to use a property temporarily without ownership claims.

Q2: How does it differ from a rental or lease agreement?
A: A leave and license agreement is governed by the Indian Easement Act, while rental agreements are governed by the Rent Control Act.

Q3: Why are most agreements for 11 months?
A: Agreements over 12 months require registration under the Registration Act, 1908, incurring higher costs.

9. When to Choose a Leave and License Agreement?

• For short-term stays.
• To avoid tenant claims under the Rent Control Act.
• For landlord-friendly terms and easier eviction processes.

Properly executed Leave and License agreements ensure clarity and protect landlords from long-term disputes. Always consult a legal expert for drafting and compliance.

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