Paying Guest Agreement Format India: Free PG Licence Sample
Key takeaways
- A PG agreement is usually drafted as a licence: permission to occupy a bed or room with services, not an interest in the property.
- The format needs parties, room and bed, period, licence fee, deposit, a services annexure, house rules, notice and exit terms.
- Under the Easements Act a licence is revocable, but the guest gets a reasonable time to leave (S.60, S.63).
- In Maharashtra Rent Control Act areas every leave and licence agreement must be registered, whatever its term (s.55).
- General information, not legal advice; confirm stamp duty with your state's IGR or e-stamp vendor.
A paying guest agreement format is a written licence that lets a guest occupy a named bed or room, usually with services such as meals and Wi-Fi, in return for a monthly fee. It should name the licensor and licensee, the room, the period, the fee, the deposit, the services, house rules, notice and exit terms. Stamp duty and registration depend on your state.
Many formats online are images you cannot copy, or generic rent agreements reused for PGs. Below you get a fully readable, copy-ready clause-by-clause format, a separate services annexure and house-rules annexure, and the legal rules on licence rights, stamp duty and registration, each tied to the section of law it comes from.
Paying guest agreement format: the short answer
A workable PG agreement in India should contain, at minimum:
- Parties: the owner or operator (licensor) and the guest (licensee), with addresses and the type of ID seen.
- Premises: the building address and the exact room and bed number, plus whether the room is shared.
- Period: start date, end date or a monthly arrangement, and any lock-in.
- Money: the licence fee, its due date, late-payment terms and the security deposit with a refund timeline.
- Services: meals, Wi-Fi, housekeeping, laundry and electricity, listed in an annexure with what is included and what costs extra.
- House rules, notice and exit: the rules the guest accepts, the notice either side must give, and what happens to belongings and the deposit on exit.
If you are an owner letting a whole flat rather than beds, you need a standard tenancy document instead; our 11-month rent agreement format covers that case, and the PG clauses below can be added to it as annexures when a flat is run as shared accommodation. For a single room let inside the owner's own home, see the room rental agreement template.
Is a PG agreement a licence or a rent agreement?
Most paying guest arrangements are drafted as licences, not leases, and the difference matters for notice, transfer and eviction.
What a licence means
Under Section 52 of the Indian Easements Act, 1882, a licence is a right granted by one person to another to do something on the grantor's immovable property which would otherwise be unlawful, and which does not amount to an easement or an interest in the property. For a PG, the owner (licensor) permits the guest (licensee) to stay in a bed or room and use shared facilities; the guest gets permission, not an interest in the building. That is why a well-drafted PG agreement uses "licensor", "licensee" and "licence fee" throughout rather than "landlord", "tenant" and "rent".
Why the label alone does not decide it
Calling a document a licence does not make it one. Courts look at the substance of the arrangement, such as whether the occupant has exclusive possession of a defined space and what the parties actually intended, not just the title on the first page. A guest who shares a room, receives meals and housekeeping and accepts the owner's access for cleaning looks very much like a licensee. Someone who is handed the keys to a whole self-contained flat with no services looks more like a tenant, whatever the document is called.
One more caveat: the Indian Easements Act, by its own Section 1, states a limited territorial extent. Where it does not formally extend, courts still apply the same licence principles, so the clauses below are drafted on those principles rather than on any claim that the Act applies everywhere in the same way. The agreement is also a contract, so the general rules of the Indian Contract Act, 1872 on offer, consent and lawful consideration apply to it like any other agreement.
PG vs rent agreement vs leave and licence
| Point | PG agreement (licence) | Rent agreement (lease) | Leave and licence (flat) |
|---|---|---|---|
| What is granted | Permission to occupy a bed or room with services | A right to enjoy the property for a term (an interest in it) | Permission to occupy a whole flat or premises |
| Exclusive possession | Usually no; shared rooms and owner access for services | Yes, of the let premises | Drafted as no, though use is often exclusive in practice |
| Services included | Typically meals, Wi-Fi, housekeeping, utilities | Rarely; tenant arranges own | Rarely, beyond fixtures and furniture |
| Transfer or sub-letting | Not transferable by the licensee (S.56 Easements Act) | Governed by the lease and the Transfer of Property Act, 1882 | Not transferable; personal to the licensee |
| Ending it | Revocable by the licensor with reasonable time to leave (S.60, S.63) | By notice under the lease or, by default, S.106 TPA | By the notice and lock-in agreed in the document |
| Main law | Licence principles (Easements Act), Contract Act, state stamp law | Transfer of Property Act, Registration Act, state rent law | Licence principles, state stamp law; in Maharashtra, the Rent Control Act |
For the full comparison between the two flat-level documents, read leave and licence vs rent agreement.
Copy-ready paying guest agreement format
Copy the text below into a document, replace each blank, and attach Annexures A and B. The fastest route is to create the base agreement in our free rent agreement generator and then paste these PG-specific clauses and annexures into it.
PAYING GUEST (LEAVE AND LICENCE) AGREEMENT
1. Date and place. This agreement is made at ________ on ____/____/20____.
2. Licensor. Mr/Ms ________, aged ____, residing at ________, owner/authorised operator of the premises (the "Licensor").
3. Licensee. Mr/Ms ________, aged ____, permanent address ________, occupation/college ________, ID document type seen: ________ (keep a masked copy; do not write full ID numbers into the agreement) (the "Licensee").
4. Premises. Bed no. ____ in room no. ____ on the ____ floor of ________ (full address), shared with ____ other occupant(s), together with shared use of the kitchen/dining area, bathroom(s) and common areas as listed in Annexure A.
5. Nature of arrangement. The Licensor grants the Licensee a personal licence to occupy the bed/room described above. Nothing in this agreement creates a tenancy, lease or any interest in the premises in favour of the Licensee. The Licensor or staff may enter the room at reasonable times for housekeeping, maintenance and inspection.
6. Period. The licence starts on ____/____/20____ and ends on ____/____/20____ (or: continues month to month until ended under clause 14). Lock-in, if any: ____ months.
7. Licence fee. Rs ________ per month, payable in advance by the ____ day of each month by ________ (mode). Late payment after ____ days attracts Rs ________ per day / no penalty (strike out one). The Licensor will give a receipt for every payment.
8. Security deposit. Rs ________, refundable without interest within ____ days of the Licensee vacating and returning keys, after deducting only unpaid dues and the cost of damage beyond normal wear and tear, with an itemised statement of deductions.
9. Services and charges. Services included in the licence fee and those charged separately are set out in Annexure A. Changes to Annexure A take effect only after ____ days' written notice.
10. House rules. The Licensee agrees to follow the house rules in Annexure B, a copy of which has been given and signed.
11. Personal use, no transfer. The licence is personal. The Licensee shall not transfer it, sub-let the bed/room or bring in a replacement occupant without the Licensor's written consent.
12. Inventory and damage. Furniture and items provided are listed in the inventory signed on move-in. The Licensee will pay the reasonable cost of repairing damage caused by the Licensee or the Licensee's visitors.
13. Police verification and documents. The Licensee will provide a photograph, ID and address proof for any verification required by local police or authorities.
14. Notice and exit. Either party may end this licence by giving ____ days' written notice (or fee in lieu, if agreed). On exit the Licensee will remove belongings, return keys and access cards, and settle dues.
15. Revocation for breach. If the Licensee seriously or repeatedly breaches this agreement or the house rules, the Licensor may revoke the licence by written notice stating the reason, and the Licensee shall have a reasonable time of not less than ____ days to leave and remove belongings.
16. Governing law and disputes. This agreement is governed by the laws of India. Courts at ________ shall have jurisdiction.
Signatures. Licensor ________ Licensee ________. Witness 1: name, address, signature ________. Witness 2: name, address, signature ________.
Annexure A: services and charges schedule
Most PG disputes start with services: a meal plan that changes without notice, an air conditioner billed separately after move-in, or a vague "electricity extra". A separate schedule fixes that. Fill one row per service and sign it with the agreement.
| Service | Included (Y/N) | Extra charge | Timing / limits to write in |
|---|---|---|---|
| Meals | Y / N | Rs ____ per month or per meal | Which meals, days served, veg/non-veg, notice to skip meals |
| Wi-Fi | Y / N | Rs ____ | Speed or plan, data limits, outage reporting |
| Housekeeping | Y / N | Rs ____ | Room cleaning frequency, common-area cleaning, linen change |
| Laundry | Y / N | Rs ____ per kg or per month | Number of washes or items per week |
| Electricity | Included / metered / capped | Rs ____ per unit above cap | Sub-meter reading date, cap in units, who reads the meter |
| Air conditioning | Y / N | Rs ____ | Separate meter or flat charge, months it applies |
| Parking | Y / N | Rs ____ | Two-wheeler or car, allotted slot or first come |
Annexure B: house rules that hold up
House rules are enforceable only if they are written, reasonable and accepted by the guest before moving in. Keep them short and specific:
- Quiet hours: state the times, for example 10 pm to 7 am.
- Visitors: visiting hours, where visitors may sit, and whether visitors must sign a register.
- Overnight guests: allowed or not, and any per-night charge.
- Cooking and kitchen use: whether guests may cook, and cleaning duties.
- Smoking and alcohol: the owner's choice; write it plainly either way.
- Pets: allowed or not.
- Damage and repairs: report within a stated time; no self-repairs to wiring or plumbing.
- Escalation: a first breach gets a written warning, a repeat gets a second warning, and a serious or continued breach can lead to revocation under clause 15.
The warning steps protect both sides: the guest knows where they stand, and the owner has a written record if the licence is ended.
Stamp duty, notarisation and registration for PG agreements
Many PG formats online get this part wrong: some say stamp paper is never needed, others suggest an 11-month term always avoids registration. Neither holds as a universal rule.
11 months or less vs over one year
Under Section 17(1)(d) of the Registration Act, 1908, leases of immovable property from year to year, for any term exceeding one year, or reserving a yearly rent must be registered. Section 18(c) makes registration optional for leases not exceeding one year. If a document that had to be registered is not, Section 49 says it cannot be received as evidence of the transaction affecting the property, subject to limited exceptions such as a suit for specific performance or a collateral transaction. Section 23 requires a document to be presented for registration within four months of execution.
These sections are worded for leases. A genuine licence is not a lease, so the term-based rule applies directly only where a PG arrangement is in substance a lease. State law can still require a licence to be registered, as Maharashtra shows.
Maharashtra example: compulsory registration and the Article 36A formula
Section 55 of the Maharashtra Rent Control Act, 1999 says that, notwithstanding any other law, any agreement for leave and licence or letting of premises entered into after the Act's commencement shall be in writing and registered under the Registration Act, 1908, and puts the responsibility for registration on the landlord. So in areas covered by the Maharashtra Rent Control Act, a PG drafted as a leave and licence must be registered whatever its term, including 11 months.
Stamp duty in Maharashtra is set by Article 36A of Schedule I to the Maharashtra Stamp Act. For a leave and licence agreement of up to 60 months, the duty is 0.25% of the total of the licence fee or rent for the whole period, any non-refundable deposit or premium, and a notional interest of 10% per year on any refundable deposit. Agreements beyond 60 months are charged as leases under Article 36. Check the current calculator and any minimum-duty rule on the IGR Maharashtra website before paying, and do not rely on a fixed rupee figure from a blog.
Other states
Every other state sets its own stamp duty on leases and licences, and some require e-stamp paper or franking. Look up your state in our stamp paper value by state guide, and if you need to register, follow how to register a rent agreement at the Sub-Registrar's office. A notary's attestation is a different step from registration; the notarised vs registered rent agreement guide explains what each one does.
| Term or situation | Registration | Source |
|---|---|---|
| Lease up to one year | Optional (central rule) | Registration Act s.18(c) |
| Lease year to year, over one year, or reserving a yearly rent | Compulsory | Registration Act s.17(1)(d) |
| Maharashtra leave and licence / PG, in Rent Control Act areas | Compulsory regardless of term; landlord responsible | Maharashtra Rent Control Act, 1999 s.55 |
| Presentation deadline | Within four months of execution | Registration Act s.23 |
| Not registered when it had to be | Cannot be received as evidence of the transaction (limited exceptions) | Registration Act s.49 |
Deposit, notice and leaving the PG
Refund timeline and deductions
The agreement itself is the guest's main protection on the deposit. Write the deposit amount, the number of days for refund, and the only permitted deductions (unpaid fees and damage beyond normal wear and tear). Ask for an itemised statement. Our security deposit rules guide covers state-level rules where they exist.
When the owner can ask a guest to leave
Under Section 60 of the Easements Act, a licence may be revoked by the grantor unless it is coupled with a transfer of property that is in force, or the licensee has, acting on the licence, executed permanent works and incurred expense. Section 63 then gives the licensee a reasonable time to leave and remove goods placed on the property. And under Section 64, a licensee who paid for the licence and is evicted by the grantor before fully enjoying it, without any fault of their own, can recover compensation.
So a PG owner can end the arrangement, but not by locking a guest out overnight. The agreement should state the notice period, and even for a serious breach the guest should get a reasonable time to pack and leave. A guest who has paid a month in advance and is asked to leave mid-month without fault has a claim for the unused period. Contrast this with tenancies: Section 106 of the Transfer of Property Act sets a default of 15 days' notice for a month-to-month non-agricultural lease where nothing else is agreed, but that default is a lease rule and should not be assumed for a PG licence.
If the building is sold
Section 59 of the Easements Act says that if the grantor transfers the property, the transferee is not bound by the licence merely because of the transfer. A buyer of a PG building does not automatically inherit the guests' licences. This is a guest-side risk worth knowing; a clause requiring the licensor to give written notice of any sale and refund deposits and advance fees in full on termination helps. Section 56 adds the other side: a licence cannot be transferred by the licensee, so a guest cannot hand over the bed to a friend without the owner's agreement.
Tenant running a PG in a rented flat
If you rent a flat and want to take in paying guests, read your own rent agreement first. Most agreements restrict sub-letting or parting with possession, and keeping paying guests without your landlord's written consent can be treated as a breach of that clause. Get the consent in writing, name the number of guests allowed, and make sure your PG agreements with guests do not promise anything longer than your own tenancy. Our subletting clause guide covers this in detail, including how to word the landlord's consent.
Documents and police verification
For the agreement itself, both parties usually need a photo ID, address proof and a passport-size photograph; the owner should also have proof of ownership or authority to run the PG. Keep masked copies of ID documents where possible. Many city police forces run a tenant or guest verification process, but the rules and forms differ by state and city, so check with your local police station rather than assuming one national rule. Our tenant police verification guide explains how the process typically works. Your municipality may also have rules for paying guest accommodation; check locally before you open.
Common mistakes in PG agreements
- Image-only samples: copying a template from a picture leads to missing clauses and typos. Use a text format you can edit.
- No services annexure: "food and Wi-Fi included" without detail is the root of most fee disputes.
- Mixed wording: "tenant", "rent" and "licensee" in the same document muddies what was intended. Pick licence language and use it consistently.
- No deposit timeline: a deposit clause without a refund period and permitted deductions invites delay.
- No inventory: without a signed list of furniture and its condition, damage claims become one person's word against another's.
- Assuming 11 months means no registration: true for leases under the central rule, but not in Maharashtra Rent Control Act areas for leave and licence agreements.
- No exit procedure: spell out key return, final meter reading and deposit settlement.
This page is general information, not legal advice. Stamp duty and registration rules change; confirm the current position with your state's IGR or e-stamp vendor, and consult a local advocate for disputes.
Frequently asked questions
Is a PG agreement legally valid?
Yes. A written PG agreement is a contract and, where drafted as a licence, the licensee's rights follow licence principles such as revocation with reasonable time to leave. Its usefulness as evidence can depend on correct stamping and, where the law requires it, registration.
Is stamp paper required for a PG agreement?
Stamp duty is set by each state, so the answer depends on where the PG is. In Maharashtra, leave and licence agreements up to 60 months attract duty under Article 36A of the Maharashtra Stamp Act. Check your state's rules before signing.
Does a PG agreement need registration?
Under the Registration Act, leases over one year, year to year or reserving a yearly rent must be registered. In areas covered by the Maharashtra Rent Control Act, every leave and licence agreement must be registered regardless of term.
Can a PG owner ask me to leave without notice?
A licence can be revoked, but under Section 63 of the Easements Act the licensee gets a reasonable time to leave and remove belongings, and Section 64 allows compensation if a paying licensee is evicted early without fault. Your agreement's notice clause also applies.
Can a tenant keep a paying guest in a rented flat?
Only with the landlord's written consent if the rent agreement restricts sub-letting or parting with possession, which most do. Without consent it can be treated as a breach of the tenancy.
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Start nowThis article is general information, not financial, tax or legal advice. Figures are approximate and change over time — always verify with a qualified professional or the official source before making a decision.
Written and reviewed by the Rent Agreement Generator editorial team. Facts checked against primary sources; see the reference above.