Table Of Content
- What is Leave and License Agreement?
- Who is the Licensee?
- Clauses that come under the Leave & License Agreement
- Required documents for Leave and License Agreement
- Where to get Leave and License Agreement?
- Advantages and Disadvantages of Leave and License Agreements
- Can Leave and License Agreement be for more than 11 months?
- Is it Necessary to Register to License & Leave Agreements?
- Difference Between a Rental Agreement and a Leave and License Agreement
- Is Police Verification Required for Leave and License Agreements?
- Conclusion
- Frequently Asked Questions
It’s essential to know all of the legal paperwork that will be signed during the renting or leasing process of a property. These agreements set forth the terms and conditions of the contract between the property’s owner and the party wishing to use or inhabit it. There is another legal form that is used to give temporary occupation rights for a property, even if some individuals may be familiar with common lease or rental agreements. Yes, we are talking about Leave and License Agreement.
Let’s talk about this crucial legal document that’s frequently used to give property owners temporary occupancy rights. This contract is crucial for protecting the interests of both parties engaged in the transaction.
What is Leave and License Agreement?
A leave and licence agreement is a legal contract that spells out the terms and conditions of a licensee’s temporary possession of property while paying the licensor a fee or rent. In this agreement, the property’s owner (licensor) grants another party (licensee) the right to use or occupy the property for a predetermined amount of time, usually for a defined duration.
Any property which is unbudgeable comes under leave and license agreement. The set of legal documents which grants a person the right to occupy it by the owner is labeled as a leave & license agreement. A document that is popular among tenants and landlords. The legal authority remains with the owner only the tenants get to occupy the property. However, there is more to it, let’s dig deeper into it:
Who is the Licensee?
Suppose, you have occupied a property on a leave & license agreement. Then you and the owner of that property will be known as the licensor and licensee. In simple words, the person who has been granted permission se that property as a licensee, and the owner of that property is called a licensor.
What are the Clauses that come under the Leave & License Agreement?
The clauses that are covered on L&L agreement are-
- Information on the disputed properties,
- Information on rent or consideration payments,
- Duties and obligations of the parties and between them,
- The length of the license or the duration of the contract,
- Information on the security deposit,
- Information on upkeep, electricity, and water costs,
- Cancellation and renewal of licenses,
- Penalty clause defining the specifics of the punishment that would be imposed on either party should it fail to carry out its obligations in line with the agreement,
- Information about fixtures and a list of the property,
- General clauses (including those relating to confidentiality, dispute resolution, application of the law, and termination of the agreement),
- Date on which the contract was signed.
What Documents are required for Leave & License Agreement?
The Only documents you need for the L & L agreement are:
- The ID proofs of both parties.
- Address proofs of both parties.
Where to get Leave and License Agreement?
There is a set format for the look of the L&L Agreement but no set way of drafting it. Either get it made Online or Offline.
- Any nearby court, you can get it drafted by a lawyer.
- Both parties should carefully scrutinize it. If any clause needs to be mended.
- Signatures of both the parties are needed.
- Then it should be printed on a stamp paper.
- Lastly, get it registered in the Sub registrar’s office.
During the Online procedure, you can look up to authentic online websites. As per my knowledge, people are supposed to:
- Fill up the concerned form,
- Checkout the details again.
- Give out the shipping address.
- Lastly, make the payments and sit back.
Everything’s done. Even eDrafter.in provides Rental Agreement service online with the same simple procedure. Make your purchases now.
What are the Advantages and Disadvantages of Leave and License Agreements?
In many articles, you might have read that only Owners have the upper hand in this but it might not be true, so let’s find out!
| Pros of Leave and license agreement | Cons of leave and license agreement |
| The expectations are already lashed out to both parties. | There may be chances of losing brand power and goodwill if any one of the parties gets into a scandal. |
| It is a time-saving, pocket-friendly & hassle-free process. | The procedure can get lengthy if you come across any wrong person. |
| Both parties have equal control over the clauses in the agreement. | The Tenant does not feel a sense of security since they the fear of getting evicted. |
| The eviction under leave & license agreement is much easier. | The landlord can get troubled if he/she comes across a nasty tenant. |
Can Leave and License Agreement be for more than 11 months?
Absolutely not, under the Registration Act 1908, to avoid the hefty Stamp Duty and registration charges the L&L Agreemtn is usually prepared for 11 months only. This is also the reason why the leave and license agreement is of 11 months. Don’t get confused between Rental Agreement and the L&L Agreement. The rental agreement is compulsory to register if it is for 12 months.
Is it Necessary to Register to License & Leave Agreements?
Registering all your legal documents gets you on the safer side. Eventually, according to section 17 of the Registration Act 1908 it is mandatory to get your license and leave agreement registered. In near future, no hurdles would be coming your way.
What hurdles could you face? Hmm.. Let’s see. If you have not got your license & leave agreement registered then in the eyes of the government it didn’t come to notice. So if any kind of dispute happens and some uncertain situation is put forward then no support from the government can be provided but in case your leave and license are registered then it is legally valid and you can take help from the government.
Difference Between a Rental Agreement and a Leave and License Agreement
Getting confused between a rental agreement and on L&L agreement should be a real deal since both documents come in handy when a place needs to be put on lease or rented on lease. But you need to be updated in detail so let’s find out license & leave agreement vs Rental agreement:
| Basis of Distinction | Rental Agreement | Leave & License Agreement |
| Governed By | Rental Control Act | Indian Contract Act |
| Possession | Exclusive rights are given to the tenant of the rented property. | The licensee has the right to occupy the property but the ownership remains with the owner. |
| Stamp Duty | Stamp Duty is higher | Stamp duty is comparatively low |
| Revocability | The landlord can not revoke the Rental Agreement. | Can be revoked by the landlord as the ownership remains with him. |
| Transferability | Can not be transferred or terminated. | Can be transferred and terminated as per the landlord’s wish. |
Is Police Verification Required for Leave and License Agreements?
Police verification has never been optional with any legal documents. For a L & L agreement, police verification is a must. The documents which are needed for the verification are:
- Identification Proof – Aadhar Card, Ration Card, Driving License, or Passport
- Two Passport size photographs.
Although, same goes for rental agreement as police verfication is necessary for rent agreement to ensure you have tenenat who won’t bother you as they have clean history.
Conclusion
The terms and conditions of a temporary occupation arrangement between a licensor and a licensee are governed by a L & L agreement, which is a legal instrument. This agreement enables the licensor to transfer ownership of the property while granting the licensee the right to inhabit and use the property for a predetermined time. The period of the licence, the rent and other fees due by the licensee, the license’s purpose, the parties’ rights and obligations, and the termination conditions must all be expressly stated in the agreement. To prevent future disagreements and legal issues, it is crucial to make sure that a L&L agreement is correctly designed, reviewed, and signed.
Frequently Asked Questions (FAQs)
Yes, stamp duty needs to be paid on Leave and License agreements. The amount of stamp duty varies from state to state and is based on the rental value of the property.
Yes, a Leave and License agreement can be terminated before the agreed-upon period by mutual consent of the parties or in case of any breach of the terms and conditions mentioned in the agreement.
If the licensee does not vacate the property after the license period expires, the licensor can take legal action to evict the licensee. However, the licensee may be entitled to some notice period before eviction, as per the terms mentioned in the agreement.
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 Comm. 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.
