India rent agreement › Leave and license
Leave and license agreement — the complete guide
A leave and license agreement is the most common urban rental contract in India. It grants a licensee the right to occupy a property for a fixed period without transferring any legal interest in the property itself, which makes it easier to terminate than a traditional lease.
Legal basis
A leave and license is governed by Section 52 of the Indian Easements Act, 1882, which defines a license as a right to do something on the licensor\'s property that would, without permission, be unlawful. Crucially, a license does not transfer any interest in the property — the licensor retains legal possession at all times.
Leave and license vs lease
| Leave and license | Lease | |
|---|---|---|
| Governing law | Easements Act, 1882 | Transfer of Property Act, 1882 |
| Transfers interest in property? | No | Yes |
| Possession | Stays with licensor | Transfers to lessee |
| Typical duration | 11 months | 1 year or longer |
| Easier to terminate | Yes | No (statutory protections) |
| Mandatory registration | Maharashtra: yes; others: only if >12 months | If >12 months |
What a leave and license agreement should contain
- Names, addresses and ID details of licensor and licensee
- Description of the licensed premises (full address, floor, area)
- License period (commonly 11 months)
- Monthly license fee (rent), due date and payment method
- Refundable security deposit
- Maintenance and society dues responsibility
- Lock-in period and termination notice (commonly 1–3 months)
- Permitted use and restrictions (residential only, no subletting, etc.)
- Lift, parking, common-area rights
- Stamp duty paid and registration details
- Witness signatures (2 required)
Stamp duty by state (overview)
| State | Stamp duty (11-month agreement) |
|---|---|
| Maharashtra | 0.25% of total rent for term + 10% of deposit |
| Karnataka | ₹500 minimum |
| Delhi | ₹100 stamp paper |
| Tamil Nadu | 1% of (rent + deposit) |
| Telangana | 0.5% of (rent + deposit), max ₹20,000 |
| Uttar Pradesh | 4% of average annual rent |
| West Bengal | 0.5% of (rent + advance) |
Registration in Maharashtra
Maharashtra is the only state where leave and license registration is mandatory regardless of duration, under Section 55 of the Maharashtra Rent Control Act, 1999. Failure to register attracts a fine of up to ₹5,000 and imprisonment of up to three months. Registration is done online through the IGR Maharashtra portal or in person at the sub-registrar\'s office.
FAQs
What is a leave and license agreement?
A leave and license agreement is a contract under Section 52 of the Indian Easements Act, 1882, by which a property owner (the licensor) grants a licensee the right to occupy a property for a specified period without transferring any interest in the property itself. It is the most common form of urban rental contract in India.
How is a leave and license agreement different from a lease?
A lease (governed by the Transfer of Property Act, 1882) creates an interest in the property and gives the lessee exclusive possession. A leave and license is merely permission to use the property — no interest transfers and the licensor retains legal possession. Licenses are easier to terminate than leases, which is why most urban landlords prefer them.
Is a leave and license agreement legally valid?
Yes. A leave and license agreement is fully enforceable in India provided it is in writing, signed by both parties, and (where state law requires) printed on stamp paper of the correct denomination and registered with the sub-registrar.
Does a leave and license agreement need to be registered?
In Maharashtra, registration is mandatory under the Maharashtra Rent Control Act regardless of duration. In other states, registration is required only when the term exceeds 12 months. Most landlords use 11-month agreements to avoid mandatory registration.
How much stamp duty applies to a leave and license agreement?
Stamp duty varies by state. In Maharashtra it is 0.25% of total rent for the term plus 10% of the deposit. In Karnataka it is ₹500 minimum. In Delhi an 11-month agreement uses ₹100 stamp paper. Check your state stamp act for current rates.