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I have constructed a residential complex, which I would like to let out.  My son suggests having leave and license agreement, instead of lease or rental agreement.  Please inform what difference between rental agreement and leave is and license agreement.

- by Premraj, Davangere

In case of lease or rental agreements, you would be transferring possession of the property by retaining the ownership.  The lessee or tenant will be in the possession of the property on payment of lease amount or rent.  The tenant acquires tenancy rights.

In case of leave and license, you retain both the ownership and the possession, but merely permitting somebody to use property for certain specific purposes on certain condition.  Here the possession continues to be with the owner of the property, unlike in the case of lease or rental agreement.

The licensee will not get any tenancy right.  What is most important is the intention of parties and not the documents.  The difference between lease/rent or leave and license is very thin.

Earlier, stamp duty payable on leave and license was less, but recently many states have revised at par with the lease agreement.  In Karnataka leave and license agreement attracts ad volerm.


These are all the legal questions answered by Advocate S.Selvakumar in various magazines, in various occasion including realestate reporter monthly.