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SHEKHAR MISHRA (public servant)     29 September 2008

Lease and Licence

What   is   the  difference   between  lease and  licence?


 3 Replies

Shree. ( Advocate.)     29 September 2008


Dear Sir,

Following are the basic differences between Licence and Lease.

A] License is governed by the Easements Act, 1882, while the lease is governed by the Transfer of Property Act, 1882.

B] If an interest is created in a property it is lease, but where only a permission for user is granted, it is license.

C] Generally if an exclusive possession is granted it is lease else license.

D] It will basically have to be construed from the document creating it.

E] normally a lease is for a longer period and license for a pretty short period

In practice, the term licence usually refers to a relatively flexible, short term agreement. Licences should be for less than six months, non-exclusive, and be terminable at short notice (say one month) by either you or the 'licensor', to avoid being treated as a lease. Licence agreements usually have a low initial cost, perhaps a deposit equivalent to one month's rent. Typical licensed premises include small office units or workshops within a larger building, and often include various support services (such as reception and security).

Legally, however, what matters is not whether an agreement is referred to as a licence or as a lease, but what the agreement actually says. Although many licences are relatively straightforward, you still need to satisfy yourself that you understand your rights and obligations before entering into any agreement

SHEKHAR MISHRA (public servant)     29 September 2008

Thank  You   very much  Sir.

A.G.Syam kumar (Advocate)     29 September 2008

licence  is permission for restricted use

but lease is total uniterruped permission to use

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