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  • Which is more beneficial, lease agreement or leave and license agreement?

    Are you looking for clarifications on the lease agreement and its difference with leave and license agreement? Would you like to know which is more beneficial and why? Follow this thread for detailed explanations.

    Just recently I have come across the term leave and license which is governed by Indian Easement Act 1882. My initial understanding is that leave and license agreement is superior to a lease agreement as the possession is not transferred to the tenant.

    My own limited understanding of the topic has raised few questions in my mind.

    Firstly, if there is such law that is beneficial to owners then why people still make the lease or rent agreement?
    Secondly, if there are disputes under the lease and license agreement. How will it be resolved? Do we need to go to rent controller for resolution?
  • Answers

    3 Answers found.
  • These days many people especially in cities are going for leave and licence agreement. Rent agreements are coming down. If there is a rent agreement and as long as the tenant is paying the rent normally, we can't force him to vacate. The rental agreement is covered by the Rent control act. So the rental agreement is good for the tenant.
    Generally, the leave and licence agreement is valid for 11 months only and if you want to extend your stay you have to renew the agreement for another 11 months. These leave and licence agreements are more favourable to the owner. This is not covered by the Rent control act. Only people who are not aware of the leave and licence agreement will go for the rental agreement. Many landlords use the format of leave and licence agreement only but they say it is a rental agreement.
    The main differences are brought out here.
    1. The leave and licence agreement gives the landlord the right to enter and use the property. The licensee (tenant) can't contest the move. But in the lease agreement, a landlord will give full possession of his fixed assets for a certain period to the lessee against payment of rent.
    2. A the lease agreement there is a notice period. There is no notice period in a leave and licence agreement as it is for a fixed time and not covered under the Rent control act.
    3. Even though the tenant is staying in the property, a set of keys will be with the owner of the house also,
    4. A rent agreement will be even in force even though the property is sold by the owner. But leave and license agreements will cease to be in existence once the property is sold.
    5. In a leave and licence agreement any party involved can file a suit for damages in a court of law.
    Whether to go for a lease agreement or leave and license agreement will depend on the parties involved. I

    always confident

  • In the legal world there are provisions for everything and there are laws covering everything. It is only because a normal person or layman is not aware about various regulations and provisions, it seems to be a new thing when it is told to some common person.
    Rent agreement is a very general term and there are many things and situations which are not legally covered in an ordinary rent agreement. It is only when some problem comes that people start searching for the solutions and then find that they should had in fact gone for a leave and licence agreement.
    So, leave and license agreement gives the landlord immense power in all the respect. Generally the major problem in any rent agreement comes when the tenent refuses to vacuate the premises on one pretext or other and starts creating problem for the house owner and many times even stops paying the rent and when the house owner approaches a court he comes to know the various provisions and modalities of the lease contract whether it is a simple rent contract or leave and license contract.
    The category of the contract as defined in the legal terms in the books of law is taken for the interpretation of any situation that may arise later in any such contract. If the title of the contract is leave and license agreement then the agreement clauses will be considered in light of the provisions and regulations stipulated for the leave and licence contact.
    So, in essence, whenever we go for any contract, it is always better to find out what are the different categories of contacts available to the persons and which one they prefer to choose. It is also possible that if one of the party insists for a particular type of contract and it doesn't suit to the other party then contact will not be signed. Anyway a signed contract in which disputes arise later is not a healthy thing.

    Knowledge is power.

  • In the earlier days, we have seen how the tenants have harassed their owners not allowing them for the revision of the rents and even by paying a rent of Rs 150/- decided in 1990, they are putting themselves along with their families. This is the flaw of rental system. Even if the owner wants to get rid of such tenants, in practical term, the owner finds it difficult to implement new regulation.
    Hence under the present time, owners are opting for leave and license agreement for their convenience where the time period slot would be mentioned specifically for 11 months and would be extendable for a similar period but with the revised payment option as decided by the owners. The agreement will be finalised with the mutual consent of the tenants.
    This type of agreement is in favour of the owner where it will be necessary for the tenant to follow the contract for which both the parties have entered.
    Lease agreement lacks that protection for at least the owner.
    There is no such provision of notice period in the leave and license agreement since it follows the time period bindings. However in case of a lease agreement, there is a notice period which can be initiated by either of them.
    Rent agreement will remain valid even if the owner has changed due to some circumstances but with lease and license agreement, the conditions would terminate with the selling of the property.

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