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Deeds and agreements · Differences

Rent agreement vs Leave and licence

A rent agreement is a lease: it gives the tenant an interest in the property for the term. A leave and licence agreement only permits the licensee to use the property and gives no interest in it, which makes eviction simpler. Leave and licence is the standard form in Maharashtra, where it must be registered.

Side by side

FactorRent agreementLeave and licence
Legal natureLease under the Transfer of Property ActLicence under the Indian Easements Act
Interest in propertyYes, for the termNo, only permission to use
Where commonMost statesMaharashtra, especially Mumbai and Pune
RegistrationCompulsory for terms over one year; 11-month leases are commonCompulsory in Maharashtra for any term
Rent control lawsMay apply, depending on the state's lawDesigned to sit outside tenancy protection
Recovering possessionThrough the state's rent or civil processUsually quicker after the licence ends
Stamp dutySet by the stateSet by the state

When Rent agreement matters

Outside Maharashtra, a rent (lease) agreement is the usual document; read the clauses on lock-in, notice and deposit.

When Leave and licence matters

In Maharashtra, expect a registered leave and licence agreement; online registration is available.

In more detail

The name on the document does not decide its nature. Courts look at the substance: exclusive possession, rent and a fixed term can make a so-called licence a lease, and vice versa.

The Maharashtra Rent Control Act, 1999 requires leave and licence agreements to be in writing and registered. Elsewhere, a lease of more than one year must be registered; that is why 11-month agreements are common.

The Model Tenancy Act, 2021 is a central model law; it applies only where a state adopts it, and its terms then depend on the state's version.

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Common questions

Is leave and licence better for landlords?

It gives the licensee no interest in the property, which usually makes recovering possession simpler. In Maharashtra it is the standard form.

Why are rent agreements for 11 months?

A lease of more than one year must be registered. An 11-month term avoids compulsory registration in many states, though registration is still possible.

Does a leave and licence need registration in Maharashtra?

Yes. The Maharashtra Rent Control Act requires it to be in writing and registered, whatever the term.

Sources

  • Transfer of Property Act, 1882, sections 105 and 107
  • Indian Easements Act, 1882, section 52
  • Maharashtra Rent Control Act, 1999, section 55
  • Registration Act, 1908, section 17

A plain-language summary, not legal or tax advice. Rules set by states differ and change; check the current position for your property.

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