Difference between Rent Agreement and Leave and License Agreement

Difference Between Rent Agreement and Leave and License Agreement

Difference between Rent Agreement and Leave and License Agreement

Table Of Content

There are various sorts of agreements that can be used to formalize the arrangement between the landlord and the tenant when renting a property. Rent and leave and license agreements are two of the most popular agreements. Both landlords and tenants need to be aware of these significant variances between them even if they may initially appear to be comparable. In order to assist you choose which one could be most appropriate for your renting scenario, we’ll look at the key distinctions between rent agreements and leave and license agreements in more detail in this blog post.

What is a leave and license agreement?

The terms and conditions of a licensee’s brief ownership of the property while paying the licensor a fee or rent are outlined in a leave and license agreement, a legal document. In this contract, the owner of the real estate (the “Licensor”) authorizes a third party (the “licensee”) to use or occupy the property for a predetermined period of time, typically for a specified duration.

Any unmovable property is covered under the leave and license agreement. A leave and license agreement is the collection of legal documents that the owner uses to grant someone the right to inhabit the property a common contract used by both landlords and tenants. Only the tenants have the right to inhabit the property; all legal authority remains with the owner.

What is Rent Agreement?

A rental agreement is a legal document signed by the owner and tenant that allows the renter to rent a property from the owner for a predetermined amount of time. An important document that benefits both the renter and the landlord is a rental agreement.

The lease agreement includes terms and restrictions as well as details about the landlord and renter. In India, landlords prefer rental agreements lasting 11 months rather than the laborious registration process. The stamp duty in the lease is computed and paid in accordance with state law. 100 rupees is the standard stamp paper amount.

Both sides have the option to renew the contract while executing a new one after the tenure period. 

What are the Differences between a Rental Agreement and a Leave and License Agreement?

The difference between Rental Agreement & Leave and a license agreement is:

Basis Of DistinctionLeave & License AgreementRental Agreement
Meaning In this agreement, the real estate’s owner (the “Licensor”) grants a third party’s (“licensee”) permission to use or occupy the property for a specific amount of time, usually for a predetermined duration. In the Rental agreement, the owner directly gives the rented property to the second party hand-to-hand.
TypeAny unmovable property comes under this agreement.Not only property but there are more intangible things that can be given on rent.
InvolvementThird party is involved.Direct to the second party.

How to Create a Rent Agreement and Leave and License Agreement?

Well, the steps that you need to follow to create a Rent Agreement & Leave and license agreement are: 

For Rent Agreement:

  • Step 1: Create the Agreement: First you are required to draft the agreement with the necessary information stated. Details may contain information about the parties, the monthly rent and security deposit amounts, the date of the agreement, the lock-in period, and other conditions.
  • Step 2: Non-Judicial stamp e-paper: Secondly the Non-Judicial e-Stamp Paper of the required duty for the Rental Agreement should be purchased in Delhi. Although there is no set denomination remaining after switching to an e-stamp, it is always advised to pay the appropriate stamp duty to avoid any legal complications. The prescribed duty for an agreement in Delhi is Rs 100.
  • Step 3: Attest the agreement with a notary public or get it registered by Sub registrar: When you notarized the agreement it can be considered legal if you get it registered by the sub-registrar has more weightage and is more legal than a notary agreement. 

For Leave and License Agreement:

During the leave & license agreement offline process-

You might hire a lawyer to draft it for any neighboring court. It should be carefully examined by both parties. If any clauses require modification. Both parties’ signatures are required. After that, it ought to be printed on stamp paper. In the Sub Registrar’s office, record it last.

Leave and license agreement Online process-

  • Complete the relevant form, 
  • Then double-check the information.
  • Make the shipping address public.
  • Make the payments lastly, then relax.

What is the cost of a Rent Agreement and leave and license Agreement?

The cost of both agreement papers depends on the state. Different states have different cost charges. Which a citizen has to pay. Even the stamp duty charged also depends on the state. For example, In States like Haryana, the stamp duty that a citizen is liable to pay starts from 101, and in Maharashtra the stamp duty is paid between 100 & 500.

What Are the Advantages and Disadvantages of Rent Agreement and Leave and License Agreement?

In Below table, we have mentioned all the major pros and cons of Rent and Leave and license agreement.

Advantages of Rent Agreement

  1. Both the tenant and the owner feel they have some freedom under this agreement.
  2. The lease is a temporary arrangement. After the notice period, a tenant may switch to another property if he or she so chooses.
  3. The tenant can readily switch between properties in accordance with his or her comfort.

Disadvantages of Rent Agreement

  1. As stated in the lease, the landlord is permitted to raise the rent on the property.
  2. The renter cannot benefit from the stability advantage over the long term. For instance, if a family rents a home, they lack the security of a long-term residence.

Advantages of Leave and License Agreement

  1. Both parties have already been hit with expectations.
  2. It is a quick, inexpensive, and hassle-free process.
  3. The clauses of the agreement are subject to equal control by both parties.
  4. The eviction process is substantially simpler under a leave and license arrangement.

Disadvantages of Leave and License Agreement

  1. If one of the parties becomes involved in a controversy, there may be a danger that their reputation and goodwill will suffer.
  2. If you encounter any incorrect individuals, the process may become drawn out.
  3. Due to their dread of being evicted, the tenant does not feel secure.
  4. If the landlord encounters a bad renter, difficulties may ensue.

How long can you Lease a house?

When a house or property is given on lease then the tenure period does not matter. You can lease a property for a year or 3 years, 10, or 20 years. The lease agreement is made when you lease out the property for long-term for commercial purposes or residential purposes.

For example, if a person gave out his building for commercial purposes for 5 years to his friend then will need to sign a lease agreement between them. The friend has to pay the amount in one go, no installments are welcomed.


So now you might have got the idea as to how different rent agreement and leave & license agreement are in reality. The concept of their being similar is what people have made since they almost have similar requirements but not entirely. If you require to make rent agreement then you can get it made through edrafter.in..

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Adrika Mishra – Content Writer

Adrika Mishra is a Content Writer with a passion for writing crisps and well researched pieces. With a graduate degree in Mass Communication and over a year of hands-on experience in writing content for the web. Adrika is a person brimming with creative instincts. Constantly seeking to learn and grow, she uses writing as a medium to document her knowledge on topics she is passionate about. When not working, Adrika can be found grooving to music. Believing in the power of “The pen is mightier than the sword”, Adrika hopes to inspire and educate readers through her writing.