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Home / Legal / Rent Agreement / How does Leave and License Agreement compare with Rental-Agreement in India? Does the case change if you are an owner of a property in Bangalore?
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How does Leave and License Agreement compare with Rental-Agreement in India? Does the case change if you are an owner of a property in Bangalore?

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0 2021-02-24T19:06:24+00:00
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Hi, 

Let me start by explaining what exactly is a leave and license agreement. A leave and licence agreement as the name suggests is an agreement between the licensor, i.e. owner, and the licensee, i.e. tenant. The agreement has a number of clauses and allows the tenants to use and occupy the licensor’s property for a certain fee. The tenant can’t make major changes to the property. The agreement does not amount to the transfer of rights as per the Indian Easement Act and favors the landlords and owners.

On the other hand, a house rental agreement is a contract of rental, usually written, between the owner of a property and a renter who desires to have temporary possession of the property for a short period of time. A rental agreement is usually made for tenants who want to access the property for less than 11 months. 

The major difference between leave and licence agreement and rental agreement is that the rental agreement falls under Rent Control Act, hence protects tenants’ interests. A tenant can claim ownership of the property after staying in the same place for at least 10 years and having paid rent regularly. Hence landlords opt for rental agreements for only 11 months. Whereas, Indian Easement Act favors the landlord/ owner. In a leave and license agreement, when the owner returns the tenant will have to vacate the property.

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1 2020-08-29T15:11:12+00:00
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A leave and license agreement is slightly different from a rental agreement. For one, a rental agreement is more favourable to tenants as it follows the Rent Control Act. On the other hand, the leave and license agreement follows the Indian Easement Act and favours the landlord/owner. With a rental agreement, under the rent control act, a tenant can claim ownership of the property after staying in the same place for at least 10 years and having paid rent regularly. You can prevent this from happening by creating an agreement for only 11 months. With a leave and license agreement, this is not possible, when the owner returns the tenant will have to vacate the property, the tenant also can’t make major changes to the property. You can check this article for more information - https://www.nobroker.in/blog/do-you-know-the-difference-between-a-leave-and-license-agreement-rent-agreement/

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