A leave and licence agreement is a legal document that enables a landlord to allow a tenant to use their property for
a specific period without any change in its ownership. Leave and licence agreements are commonly used in the
rental housing segment. In the commercial realty segment, however, the use of lease agreements is more common.
This is because a lease creates an exclusive interest in the property in favour of the tenant while a leave and
licence agreement does not create any interest in the property towards the tenant.
Differences between lease and leave & licence agreement
A lease creates an interest in the property unlike a leave and license agreement.
A lease grants a tenant with exclusive possession while a leave and licence agreement only grants
permission to occupy the property.
Licences are revocable; leases are not.
Leases are not determined by the grantor while licences are.
Leases are transferable while licences are not.
A lease creates inheritable rights unlike licences.
Leave and licence agreement: Legal definition
While various courts have from time to time elaborated on the legal concept, the basis of the leave and licence
agreement is found in the Indian Easements Act, 1882.
“Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or
upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful and
such right does not amount to an easement or an interest in the property, the right is called a license,” reads Section
52 of the Indian Easements Act.
According to the Supreme Court (SC), if a document gives only a right to use the property in a particular way or under
certain terms, while it remains in the possession and control of the owner thereof, it will be a license. Basically, no
interest in the property is transferred to the tenant.
“The legal possession, thereof, continues to be with the owner of the property but the licensee is permitted to make
use of the premises for a particular purpose. But for this permission, his occupation would be unlawful. It does not
create in his favour any estate or interest in the property,” the SC said.
Since no easement right is granted, the landlord can revoke the permission granted to the tenant at will. In cases
where the landlord wants to let out his property for short periods, working out a rental agreement format on the basis
of a leave and licence agreement, gives them the freedom to do so. This is also beneficial for the tenant, as they do
not have to serve long notice periods to vacate the place.
Leave and licence agreement sample format
LEAVE AND LICENSE AGREEMENT
This agreement is made and executed on (Date) at (City) Between, (Name) , Age: About Years, Occupation: , PAN: ,
UID: . Residing at: HEREINAFTER called ‘the Licensor (which expression shall mean and include the Licensor above
named as also his respective heirs, successors, assigns, executors and administrators)
AND (Name) , Age: About Years, Occupation: ___ , PAN:_________, UID:________ . Residing at
___________________________________________________________________ HEREINAFTER called ‘the
Licensee’ (which expression shall mean and include only Licensee above named).
WHEREAS the Licensor is absolutely seized and possessed of and or otherwise well and sufficiently entitled to all
that constructed portion being unit described in Schedule hereunder written and are hereafter for the sake of brevity
called or referred to as Licensed Premises and is/are desirous of giving the said premises on Leave and License
basis under Section 24 of the Maharashtra Rent Control Act, 1999.
AND WHEREAS the Licensee herein is in need of temporary premises for his use has/have approached the Licensor
with a request to allow the Licensee herein to use and occupy the said premises on Leave and License basis for a
period of Months commencing from and ending on , on terms and subject to conditions hereafter appearing.
AND WHEREAS the Licensor have agreed to allow the Licensee herein to use and occupy the said Licensed
premises for his aforesaid purposes only, on Leave and License basis for above mentioned period, on terms and
subject to conditions hereafter appearing;
NOW THEREFORE IT IS HEREBY AGREED TO, DECLARED AND RECORDED BY AND BETWEEN THE
PARTIES HERETO AS FOLLOWS:-
1) Period: That the Licensor hereby grants to the Licensee herein a revocable leave and license, to occupy the
Licensed Premises, described in Schedule hereunder written without creating any tenancy rights or any other rights,
title and interest in favour of the Licensee for a period of Months commencing from and ending on
2) Rent & Deposit: That the Licensee shall pay to the Licensor Rs. Per month towards the compensation and Rs.
Interest free refundable deposit, for the use of the said licensed premises. The amount of monthly compensation shall
be payable within first five days of the concerned month of Leave and License.
Or
That the Licensees shall pay to the Licensor the following amount per month towards the compensation for the use of
the said licensed premises . a) Rs —————-per month for the first ——–months, b) Rs—————–per month for
the next ——–months, c) Rs—————–per month for the next ——–months The amount of monthly compensation
shall be payable within first five days of the concerned month of Leave and License. OR · That the Licensees shall
pay to the Licensor Rs————–per month towards the compensation and Rs————–interest free refundable
deposit, for the use of the said licensed premises. The amount of monthly compensation shall be payable within first
five days of the concerned month of Leave and License.
OR
That the Licensees shall pay to the Licensor Rs————–per month towards the compensation and Rs————–
interest free nonrefundable deposit, for the use of the said licensed premises. The amount of monthly compensation
shall be payable within first five days of the concerned month of Leave and License.
OR
That the Licensees shall pay to the Licensor the following amount per month towards the compensation for the use of
the said licensed premises . a) Rs —————-per month for the first ——–months, b) Rs—————–per month for
the next ——–months, c) Rs—————–per month for the next ——–months. The amount of monthly compensation
shall be payable within first five days of the concerned month of Leave and License. Licensees shall also pay to the
Licensor Rs————–interest free refundable deposit, for the use of the said licensed premises.
OR
That the Licensees shall pay to the Licensor the following amount per month towards the compensation for the use of
the said licensed premises. a) Rs —————-per month for the first ——–months, b) Rs—————–per month for
the next ——–months, c) Rs—————–per month for the next ——–months. The amount of monthly compensation
shall be payable within first five days of the concerned month of Leave and License. Licensees shall also pay to the
Licensor Rs————–interest free nonrefundable deposit, for the use of the said licensed premises.
3) Payment of Deposit:
That the Licensee have paid / shall pay the above mentioned deposit/premium as mentioned above by Cash. Amount
Rs.________
OR
That the ———————- has/have paid / shall pay the above mentioned deposit/premium as mentioned above by
Demand Draft No.———-, dated ——–, drawn from —————- Bank, ————- Branch. Amount Rs.————-
OR
That the ———————- has/have paid / shall pay the above mentioned deposit/premium as mentioned above by
Cheque No. ———–, dated——–, drawn on the Licensee’s Banking Account with —————- Bank, ————-
Branch. Amount Rs.————-
OR
That the ———————- has/have paid / shall pay the above mentioned deposit/premium as mentioned above by
Transaction Reference No. ————-, dated———-, drawn on the Licensee’s Banking Account with —————
Bank, ———– Branch. Amount Rs.———–
4) Maintenance Charges:
That the all outgoings including all rates, taxes, levies, assessment, maintenance charges, non occupancy charges,
etc. in respect of the said premises shall be paid by the Licensor.
OR
That the Licensee/s herein shall bear and pay all the maintenance charges in respect of the said Licensed Premises,
and other outgoings including all rates, taxes, levies, assessment, non occupancy charges, etc. in respect of the said
premises shall be paid by the Licensor/s
5) Use: That the Licensed premises shall only be used by the Licensee for purpose. The Licensee shall maintain the
said premises in its existing condition and damage, if any, caused to the said premises, the same shall be repaired by
the Licensee at its own cost subject to normal wear and tear. The Licensee shall not do anything in the said premises
which is or is likely to cause a nuisance to the other occupants of the said building or to the prejudice in any manner
to The rights of Licensor in respect of said premises or shall not do any unlawful activities prohibited By State or
Central Government.
6) Alteration: That the Licensee shall not make or permit to do any alteration or addition to the construction or
arrangements (internal or external) to the Licensed premises without previous consent in writing from the Licensor.
7) No Tenancy: That the Licensee shall not claim any tenancy right and shall not have any right to transfer, assign,
and sublet or grant any license or sub-license in respect of the Licensed Premises or any part thereof and also shall
not mortgage or raise any loan against the said premises.
8) Inspection: That, the Licensor shall on reasonable notice given by the Licensor to the Licensee shall have a right
of access either by himself or through authorized representative to enter, view and inspect the Licensed premises at
reasonable intervals.
9) Cancellation: That, if the Licensee commits default in regular and punctual payments of monthly compensation as
herein before mentioned or commit/s breach of any of the terms, covenants and conditions of this agreement or if any
legislation prohibiting the Leave and License is imposed, the Licensor shall be entitled to revoke and / or cancel the
License hereby granted, by giving notice in writing of one month and the Licensee too will have the right to vacate the
said premises by giving a notice in writing of one month to the Licensor as mentioned earlier.
10) Possession: That the immediately at on the expiration or termination or cancellation of this agreement the
Licensee shall vacate the said premises without delay with all his goods and belongings. In the event of the Licensee
failing and / or neglecting to remove himself and / or his articles from the said premises on expiry or sooner
determination of this Agreement, the Licensor shall be entitled to recover damages at the rate of double the daily
amount of compensation per day and or alternatively the Licensor shall be entitled to remove the Licensee and his
belongings from the Licensed premises, without recourse to the Court of Law.
11) Registration: This Agreement is to be registered and the expenditure of Stamp duty and registration fees and
incidental charges, if any, shall be borne by the Licensee.
Schedule:
(Description of flat which is the subject matter of these presents) All that constructed portion being residential unit
bearing___( Apartment/Flat No.) ____, Built-up (Area): ___________, situated on the Floor of a Building known as
______________ standing on the plot of land bearing
___________________________________________________ , of Village: , situated within the revenue limits of
Tehsil and Dist and situated within the limits of Municipal Corporation.
IN WITNESS WHEREOF the parties hereto have set and subscribed their respective signatures by way of putting
thumb impression electronic signature hereto in the presence of witness, who are identifying the executants, on the
day, month and year first above written.
Licensee
Name
Address
Photo
Thumb impression
Licensor
Name
Address
Photo
Thumb impression
Witness of execution -cum- identifier for
Name
Address
Photo
Thumb impression
Witness of execution -cum- identifier for
Name
Address
Photo
Thumb impression
Leave and licence agreement format 2
Here is a basic leave and license agreement format:
Leave and licence agreement agreement
This rent agreement is made on this __________ (date) by ________________ (name of the landlord) S/o
_______________ (father’s name of the landlord), Address:
___________________________________________________ (residential address of the landlord). Hereinafter
called the Lessor/Owner, and first party
AND
_____________________________ (Name of tenant), called lessee/tenant, or second party
The expression Lessor/Owner and the Lessee/Tenant shall mean and include their legal heirs successors, assigns,
representatives etc.
Whereas the first party is the owner and in possession of the property No:
_____________________________________________________________________________________________
__ (address of rented property) and has agreed to let out the said property to the second party for a monthly rent of
Rs. ______/- (in words) per month.
Now This Rent Agreement Witness As Under:
That the second party will have to pay Rs. ______/- (in words) as monthly rent, which does not include electricity and
water charges.
That the second party shall pay one month rent in advance to the landlord that would be further adjusted in the
monthly rent.
That the second party shall pay the water and electricity charges on the basis of the consumption to the
landlord/owner.
That the second party shall not lease the property to a subtenant under any circumstances without the consent of the
owner/landlord.
That the second party shall follow all the rules and regulations, by-laws set by the local authorities in respect of the
leased property and will not get involved or do illegal activities in the leased property.
That this rent agreement is granted for a period of eleven (11) months starting from ___________, and this contract
can be extended further with the mutual consent of both the parties.
That the second party shall not be permitted to do a construction in the rented premises. Besides, he/she could do
the installation of temporary decoration, wooden partition/cabin, air conditioners etc. without seeking the permission
of the landlord.
That the second party is not allowed to make any alteration in the rented property without the written consent of the
owner.
That the second party will have to allow the landlord or his authorized agent to enter in to rented premises for its
inspection or general checking for any repair work, if needed.
That the second party shall keep the premises clean.
That the second party shall bear the cost of day to day minor repairs.
That this contract/agreement could be revoked before the expiry of this tenancy period by serving one month prior
notice.
That both the parties have read and understood this agreement and have agreed to sign the same without any
pressure from any side.
In WITNESS WHEREOF
The landlord and the tenant have hereunto subscribed their hand at ______ (place) on this the _____________ (date
of rent agreement) year first above mentioned in presence of the following witnesses.
Witnesses:
1.
2.
___________ (name of the landlord) _________________ (name of the tenant)
Lessor Lessee
Latest court order
No single litmus test to distinguish licence from lease: Kerala
HC
July 24, 2023: There is no single litus test to differentiate between a lease and a licence agreement, the Kerala High
Court has said. The intentions of the parties involved and the surrounding circumstances determine the nature of the
arrangement and not the nomenclature used in the document and or reading of a few isolated provisions, it added.
“It is the settled law that the nature of a document has to be understood not by its nomenclature or by interpreting one
or two clauses in it in isolation, but by interpreting the document as a whole. Going by the principles laid down by the
aapex court as well as this court, there cannot be a single litmus test to decide whether the transaction is a lease or
licence,” a Division Bench of Justice Anil K Narendran and Justice PG Ajithkumar said in an order dated July 14,
2023.
“Generally speaking, the difference between a lease and licence is to be determined by finding out the real intention
of the parties as decipherable from a complete reading of the document, executed between the parties and the
surrounding circumstances,” it added while setting aside an order by the rent control court in the Ashok Harry Pothen
versus Premlal case.
The first statute which is relevant for a leave and licence is the Indian Easements Act, 1882. S.
52 of the Act, defines a 'licence' as a right granted by one person to another to do something in
or upon the grantor's immovable property, which act would in the absence of such a right be
unlawful.
