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patel (employee)     28 September 2015

Leave and licence agreement or no agreement

dear experts first of all would like to thank you all for the service rendered by you.

kindly help me out in this query.i need to rent my house.few are suggesting that i can go for leave and licence agreement which will help me  (two or three months notice.if he doesnt then taking the issue to rent controller and then to court) if the tenant refuses to vacate or creates some problem.few say its better to rent the house without any agreement as it is even more easy (15 days notice and if needed tresspass complaint can be filed) to vacate in case if any problem arises.

i am really confused as to which one to go far.kindly help me experts



Learning

 4 Replies

Jatin Mittal (Corporate Lawyer)     29 September 2015

Hi

If you plan to lease out your house only for the purpose of resdential purposes, then go for lease agreement. Leave and license agreement is mostly made for the commercial purposes when you want your lessee to utilise the premise only for some specific purpose. For any other clarification, feel free to write to me at mittaljets@gmail.com. No charges for the consultation.

Pragandh Ketkale (Sr. Associate)     30 September 2015

Rental Agreement vs. Leave and Licence Agreement in India

Rental agreement 
 Rental agreements are also referred to as tenancy or lease agreements. In rental agreements, there is a transfer of interest from a lessor to a lessee. If the premises are given on tenancy, there is an element of irrevocably (or immovability) by the owner except on the grounds for eviction mentioned under the Rent Act.

Leave and licence agreement
The phrase "license" was defined in Section 52 of the Indian Easement Act, 1882 [ACT NO. 5 OF 1882] [17th February, 1882], as follows: "Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license".

Licence does not create any interest in the premises in favour of the licensee excepting a mere right to use and occupy the premises for a limited duration in consideration of the price paid. Licence only creates a right or interest in the immovable property to do something, under the authority of the grantor of the licence.

Every license is governed by the provisions under the Indian Easement Act. When any property is given on leave and license, the agreement is known as leave and license agreement.
A leave and license agreement can be terminated according to the terms of the agreement, and the owner can demand the possession back from the licensee.

The classification of an agreement
The question whether a certain agreement to occupy an immovable property is an agreement to lease or an agreement of leave and license has been a subject of many court judgments.

Ever since the introduction of the Rent Acts and security of possession given to the tenants by law, agreements of license have come to be viewed with suspicion that they are a disguise taken by the landlords. According to the courts, the classification of an agreement and the real nature of the transaction has to be determined through construction of the document as a whole and not based on particular words used in the document.

From the various judgments it can be said that the tests laid down to decide whether an agreement is a lease or a license are - what was the intention of the parties and whether the agreement creates an interest in the property.

Where one person grants to another, a right to do something in the immovable property of the grantor, and such right does not amount to an easement or an interest in the property, it is a licence. A licence may be granted by anyone to the extent to which he may transfer his interests in the property affected by the licence. The grant of a licence may be express or implied from the conduct of the grantor, and an agreement which purports to create an easement, but is ineffectual for that purpose, may operate to create a licence

patel (employee)     30 September 2015

thank you experts.

T. Kalaiselvan, Advocate (Advocate)     05 October 2015

If you have planned to rent out your house then you must ensure that you enter into a rental agreement or a lease agreement with the tenant on the terms and conditions you may stipulate in it.  This will safeguard your interest in the future too.  


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