• Tenancy vs Leave & License Agreement

I have a residential apartment building in Hyderabad which I would like to rent out. For renting purpose, please advise whether a tenancy agreement is better or Leave & License?

Almost all landlords (whom I spoke with) in Hyderabad are using Tenancy Agreement with their tenants. Leave & License is not so common.
Asked 3 years ago in Property Law
Religion: Muslim

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7 Answers

A tenancy agreement works in favor landlord, where as in leave and license landlord  does not have control till the expiry of license. Tenancy is better proposition. You can get the agreement executed through GPA. Draft a GPA in favor of relative giving him power of execute tenancy and get the GPA attested through Indian consulate online as walk-ins are suspended due covid, sent the GPA to him, he can get all legal formalities completed on your behalf  


A tenancy agreement works in favor landlord, where as in leave and license landlord  does not have control till the expiry of license. Tenancy is better proposition. You can get the agreement executed through GPA. Draft a GPA in favor of relative giving him power of execute tenancy and get the GPA attested through Indian consulate online as walk-ins are suspended due covid, sent the GPA to him, he can get all legal formalities completed on your behalf  

Ravi Shinde
Advocate, Hyderabad
4482 Answers
42 Consultations

- Rent Agreements are usually opted by those who only need to stay in an area for a certain period. Whereas, Lease Agreements are opted by those who seek stability and long-term tenure.

- Further, a rent agreement can be for 11 months and registration is not mandatory for 11 months period  , whereas leave & license agreement may be entered for long terms and may be locking period as well. 

- Hence, if you want to give the premises for short terms then a tenancy agreement is better choice . 

Mohammed Shahzad
Advocate, Delhi
14773 Answers
225 Consultations

Better to give premises on leave and licence for 11 months or more with renewal clause 

 

2) register leave and licence agreement 

 

3) take security deposit from licencee 

 

4) there should be clause that in event of failure to pay rentals on time agreement would stand terminated after issue of one month notice or so 

Ajay Sethi
Advocate, Mumbai
97605 Answers
7901 Consultations

Dear sir,

1. You should go for the Tenancy agreement as it favour's the landlord. it is favorable for a short-term rent.

2. Registration is not mandatory for rent agreements which are generally done for 11 months but in case of leave & license is generally made for a long-term period. It also takes away the control from the Landlord during the period license.

Thank you

 

Anik Miu
Advocate, Bangalore
10422 Answers
121 Consultations

lease creates an interest in the property, unlike a leave and licence 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.

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.

Under the Registration Act, 1908, it is mandatory to register a rental agreement if period is more than 12 months.

Hence, to avoid stamp duty and registration charges, leave and licence agreements are usually for 11 months.

 

T Kalaiselvan
Advocate, Vellore
87806 Answers
2365 Consultations

You better go for leave and license but it will require registration.

Ashish Davessar
Advocate, Jaipur
30814 Answers
974 Consultations

1. If you register a tenancy agreement, vacating the tenant will be decided by the Court as per Tenancy Act of your State.

 

2. Whereas in case of leave and license agreement, it will be much easier to vacate the licensee since he is not your tenant but the person whom you have given license to stay at your place for a particular period of time on certain terms.

 

3. Leave and License Agreement for a period of more than one year is required to be registered for which the flat owners execute leave license agreement for 11 months and keep renewing the same.

Krishna Kishore Ganguly
Advocate, Kolkata
27533 Answers
726 Consultations

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