Realtybills Leave and License Agreement Format: Simplifying Your Rent Agreement Legal Process

Leave and License Agreement Format: Simplifying Your Rent Agreement Legal Process

Leave and License Agreement Format: Simplifying Your Rent Agreement Legal Process

Leave and License Agreement Format: Simplifying Your Rent Agreement Legal Process​

Leave and License Agreement Format: Simplifying Your Rent Agreement Legal Process

LEAVE AND LICENCE AGREEMENT

THIS AGREEMENT OF LEAVE AND LICENSE is made and executed on this    day of   20 .

BETWEEN

MR                                  (Aadhar No.             ) Aged about       years, Occ.: Service R/o     , Nagpur. Hereinafter called as the Licensor which expression shall include his heirs, Successors legal representatives and assigns of the ONE PART.

AND

  • , (Aadhar No.      ) aged about     years, Occ.- Private  2)      , (Aadhar No.  ) aged about           years, Occ.- Private R/o                           Hereinafter called as the Licensee which expression shall include his heirs, Successors legal representatives and assigns of the OTHER PART

WHEREAS  the Licensor is absolute owner of the residential premises             Nagpur. The licensor granted licensee for use of the above-mentioned premises to the licensee for residence purpose as per leave and license.

NOW THEREFORE IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:

  1. That the Licensee shall pay to the licensor for the premises            /- (Rs.     Thousand        Hundred Only) as rent per month & Electricity charges will be paid by licensee separately
  1. The licensee shall pay the aforesaid compensation in advance for every month by the 1st  to 10th of each  month  in the shape of Cash / Cheque.
  1. That the Licensee will used the premises for Residential purpose and no illegal activity will be carried out and neither the licensee will store any chemical, inflammable goods etc. in the premises.
  1. That the licensee is for a maximum period of 11 month with the option to renew for further two terms i.e. effective from     /      /20      to     /    /20      if both the parties mutually agrees, Both the parties can ask to terminate of lease at one month notice. That after 11 month there will be 10% increase in the total rent. That if the compensation herein remains in arrears for the period of one months (whether demanded or not) this licence shall automatically come to an end on account of the aforesaid default on the part of the licensee, the owner shall be authorized to have the premises vacated.
  1. That all the dues payable on account of electricity will be timely paid directly by the licensee at the time of vacation all such outstanding dues will be cleared by the licensee.
  1. That the licensee shall not make any addition & alternation without any written permission of the licensor nor shall licensee cause any damage to the premises.
  1. That the licensor has provided all the necessary fittings, electricity, water, latrine, bathroom at his own cost.
  1. That the licensor undertaken to effect repairs white washing, painting or wood work etc. before the start of this agreement.
  1. That day to day repairs, such as fuses and leakage of water taps shall be done by licensee as his own cost. But any major repairs, such as leakage in electric current, busting of sewage pipe or any damage to the structure shall be done be licensor at his own cost provided such damages is not caused by negligence of the licensee.
  1. The licensee shall permit the licensor or his authorized representative to enter the premises to inspect or to carry out the repairs etc. at all reasonable time as and when but with prior notice.
  1. All the rules, regulation laws and by laws of municipal or any other legal authority having jurisdiction over the premises shall be binding on the licensees and the licensee shall be to reimburse the loss if any which the licensor may suffer on account of the default of the licensee in observing the said rules, regulations / laws and by laws.
  1. That the property demised herein is in perfect condition and all sanitary/ electrical and other fittings and fixtures in the premises shall be restored by the licensee to the licensor in working order and in as good condition as at present except caused due to natural wear and tear and damage by the act of good.
  1. That the licensor represents and guarantees that he is fully empowered and authorized and able to make this leave and licence agreement and that he will use it licensee free and harmless of any demand, claim, action and proceedings by others in respect of the premises.
  1. That it is understood and agreed by both the parties that the notice herein referred to above shall be deemed to be on the respective parties if sent under Reg. A/D Post at the address hereinabove mentioned
  1. That the licensee shall not sub-let or otherwise part with any part of the premises or shall grant any licence to any one with regard to any part of the demised premises.
  1. That the licensee has satisfied himself that the compensation agreed to between the parties is fair and the licensee undertakes not to take the objections for the same.
  1. That on the expiry of the period of the licence herein, licensee shall handover vacant and physical possession of the demised premises to licenser
  1. That it is also agreed, declared and recorded that if this agreement is to be renewed, the same will be renewed for the further period of 11 months with the mutual consent of both parties, then fresh stamped document shall be duly executed between the parties here to at the cost of the licensee.
  1. If the Licensee create any sort of nuisance in the premises or if the neighbor object on the nuisance the Licensor will gate premises vacated by giving one month notice to the licensee before the termination of agreement.
  1. That, the licensee deposited an amount of       /- (Rs.          Thousand Only) without interest and same will be refunded on termination of the agreement at the time of vacating the License premises or deducting balance compensation of said house after found balance rent towards Licensee.

In good faith and testimony, the parties have set their respective hand on this leave and licence on this      day of         20      written in the presence of the following witnesses at Nagpur

WITNESSES

  1.    

                                         ( LICENSOR )

 

 

 

 

 

 

  1.  

  (LICENSEE )

  1.  

  (LICENSEE )

FAQs on Notarized Leave and License Agreement on ₹500 Stamp Paper

1. Can a Leave and License Agreement on ₹500 stamp paper be valid?

Yes, such an agreement is valid but has limited legal enforceability. A notarized agreement on ₹500 stamp paper is acceptable for informal purposes but does not carry the same legal weight as a registered agreement.

2. What is the legal status of a notarized agreement that is not registered?

A notarized agreement acts as evidence of a mutual understanding between the parties but is not admissible in court for enforcing rights, especially if it is not registered as required under law.

3. Is it mandatory to register a Leave and License Agreement?

Yes, under the Registration Act, 1908, a Leave and License Agreement exceeding 11 months must be registered. Not registering it can lead to penalties and legal complications.

4. What are the risks of using an unregistered agreement?

  • Limited Legal Protection: Courts may not accept it as evidence in disputes.
  • Eviction Challenges: If the tenant refuses to vacate, eviction can be difficult.
  • Penalties: Using an unregistered agreement for longer terms may attract fines.

5. Is a ₹500 stamp paper sufficient for a Leave and License Agreement?

The stamp duty varies by state. In most states, ₹500 may not suffice for agreements involving significant rent or security deposits. You should calculate the exact duty based on the rent and security deposit as per the state laws.

6. Why is registration more secure than notarization?

Registration provides:

  • Legal Enforceability: Courts recognize registered agreements as evidence.
  • Public Record: Registration ensures the agreement is on record with the registrar’s office.
  • Reduced Fraud Risk: It minimizes disputes over authenticity.

7. Can I evict a tenant with only a notarized agreement?

Eviction becomes challenging with a notarized agreement, as it lacks the legal enforceability of a registered document. A registered agreement is crucial for initiating eviction proceedings in court.

8. What is the penalty for not registering a Leave and License Agreement?

Penalties vary by state but generally include fines equivalent to 10 times the unpaid stamp duty or more.

9. Can a notarized agreement be upgraded to a registered agreement later?

No, you cannot “upgrade” an existing notarized agreement. A new agreement must be drafted and registered with proper stamp duty and registration fees.

10. What should I do if my Leave and License Agreement is only notarized?

  • Keep it as temporary documentation.
  • Draft and register a new agreement as per legal requirements to ensure enforceability.

11. How do I calculate the correct stamp duty for registration?

Stamp duty is typically calculated as a percentage of the total rent and deposit amount for the duration of the agreement. Consult local state guidelines or a legal advisor for precise calculations.

12. Can notarized agreements be used for agreements less than 11 months?

Yes, notarized agreements are commonly used for agreements up to 11 months to avoid registration. However, registration is always recommended for better legal protection.

Leave and License Agreement Format: Simplifying Your Rent Agreement Legal Process​

लीव एंड लाइसेंस एग्रीमेंट

लीव एंड लाइसेंस एग्रीमेंट
यह अनुबंध दिनांक _______ 20__ को किया गया और निष्पादित किया गया।

पक्षकार:
पहला पक्ष:
श्री _____________ (आधार नंबर _____________), उम्र _______ वर्ष, व्यवसाय: ______, निवासी _____________, नागपुर। जिसे आगे “लाइसेंसर” कहा जाएगा, जो अपने उत्तराधिकारियों, कानूनी प्रतिनिधियों और अधिकार हस्तांतरणियों को सम्मिलित करेगा।
दूसरा पक्ष:

  1. श्री/सुश्री _____________ (आधार नंबर _____________), उम्र _______ वर्ष, व्यवसाय: निजी।
  2. श्री/सुश्री _____________ (आधार नंबर _____________), उम्र _______ वर्ष, व्यवसाय: निजी।
    निवासी _____________, नागपुर। जिन्हें आगे “लाइसेंसी” कहा जाएगा, जो अपने उत्तराधिकारियों, कानूनी प्रतिनिधियों और अधिकार हस्तांतरणियों को सम्मिलित करेगा।

जहां:
लाइसेंसर _____________, नागपुर में स्थित आवासीय परिसर का पूर्ण स्वामी है और उसने यह परिसर लाइसेंसी को केवल आवासीय उपयोग के लिए लीव और लाइसेंस पर दिया है।

अब, यह अनुबंध निम्नलिखित शर्तों के अनुसार किया गया है:

  1. लाइसेंसी परिसर के लिए प्रतिमाह ₹_________ (₹_________ हजार _________ सौ मात्र) का किराया देगा, एवं बिजली का शुल्क अलग से चुकाएगा।
  2. लाइसेंसी यह किराया हर महीने की 1 से 10 तारीख तक नकद/चेक द्वारा अग्रिम में चुकाएगा।
  3. परिसर केवल आवासीय उपयोग के लिए होगा और किसी भी गैरकानूनी गतिविधि या ज्वलनशील वस्तुओं का भंडारण नहीं होगा।
  4. यह अनुबंध अधिकतम 11 माह के लिए मान्य रहेगा और दोनों पक्षों की सहमति से 2 और अवधि के लिए नवीनीकरण का विकल्प रहेगा।
  5. बिजली बिल का भुगतान समय पर लाइसेंसी करेगा और परिसर छोड़ने से पहले सभी बकाया राशि चुकाएगा।
  6. बिना लिखित अनुमति के परिसर में कोई भी परिवर्तन नहीं किया जाएगा।
  7. परिसर में सभी आवश्यक फिटिंग्स और सुविधाएं लाइसेंसर द्वारा प्रदान की गई हैं।
  8. नियमित मरम्मत लाइसेंसी करेगा, जबकि बड़ी मरम्मत लाइसेंसर द्वारा की जाएगी।
  9. लाइसेंस समाप्त होने पर लाइसेंसी परिसर को उसी स्थिति में लौटाएगा, जैसी स्थिति में उसे प्राप्त हुआ था।

गवाह:

  1.  

(लाइसेंसर)

  1.  

(लाइसेंसी)

  1.  

(लाइसेंसी)

Leave and License Agreement Format: Simplifying Your Rent Agreement Legal Process​

LEAVE AND LICENSE AGREEMENT

This Leave and License Agreement is made and executed on this ___ day of ______ 20___, at Nagpur.

BETWEEN

Mr. [Licensor’s Name],
Aadhar No.: ____________, Age: ___ years, Occupation: [Service/Business],
Resident of: ________________________, Nagpur.
Hereinafter referred to as the “Licensor” (which expression shall include his heirs, successors, legal representatives, and assigns) of the ONE PART.

AND
1) [Licensee 1’s Name],
Aadhar No.: ____________, Age: ___ years, Occupation: [Private/Public/Other],

2) [Licensee 2’s Name],
Aadhar No.: ____________, Age: ___ years, Occupation: [Private/Public/Other],
Both residing at: ________________________, Nagpur.
Hereinafter referred to as the “Licensee(s)” (which expression shall include their heirs, successors, legal representatives, and assigns) of the OTHER PART.

RECITALS

Whereas the Licensor is the absolute owner of the residential premises located at ________________________, Nagpur, hereinafter referred to as the “Premises”.
And whereas the Licensor agrees to grant, and the Licensee(s) agree to accept, the Premises on leave and license basis for residential purposes only, under the terms and conditions stated herein.

TERMS AND CONDITIONS

  1. License Fee and Rent Payment:
    The Licensee(s) shall pay a monthly license fee of ₹________ (Rupees _____________ Only) to the Licensor. Electricity charges shall be paid separately by the Licensee(s).

  2. Mode of Payment:
    The rent shall be paid in advance between the 1st and 10th day of every month via cash or cheque.

  3. Purpose:
    The Premises shall be used strictly for residential purposes. No illegal activities or storage of hazardous materials will be permitted.

  4. Agreement Duration:
    This agreement is valid for 11 months from //20___ to //20___, with an option to renew for two additional terms of 11 months each, subject to mutual consent. A 10% rent increase will apply for each renewal.

  5. Termination:
    Either party may terminate the agreement with one month’s written notice. In case of rent arrears exceeding one month, the Licensor may terminate the agreement immediately.

  6. Electricity Charges:
    All electricity dues shall be paid directly by the Licensee(s) and cleared before vacating the Premises.

  7. Alterations:
    No structural alterations or modifications shall be made by the Licensee(s) without prior written permission from the Licensor.

  8. Maintenance and Repairs:

    • Day-to-day maintenance (e.g., fuses, water taps) shall be borne by the Licensee(s).
    • Major repairs (e.g., structural damage, pipe bursts) shall be handled by the Licensor unless caused by Licensee negligence.

  9. Inspection Rights:
    The Licensor or their representative may inspect the Premises with prior notice at a mutually convenient time.

  10. Compliance with Laws:
    The Licensee(s) shall comply with all applicable municipal, legal, and regulatory requirements.

  11. Premises Condition:
    The Premises and its fixtures (e.g., electrical, sanitary) shall be returned in the same condition as at the commencement of this agreement, except for normal wear and tear.

  12. Deposit:
    A refundable deposit of ₹________ (Rupees _____________ Only) shall be paid by the Licensee(s) to the Licensor. The amount will be refunded upon vacating the Premises, subject to any adjustments for pending dues or damages.

  13. Sub-Licensing Prohibited:
    The Licensee(s) shall not sub-let, transfer, or share the Premises with any third party.

  14. Nuisance:
    In case of any nuisance or disturbance caused by the Licensee(s), the Licensor reserves the right to terminate the agreement with one month’s notice.

  15. Renewal:
    Renewal of the agreement shall require mutual consent and execution of a new stamped agreement.

WITNESS AND SIGNATURES

In witness whereof, both parties have signed this agreement on this ___ day of ______ 20___, in the presence of the undersigned witnesses.

Licensor:

Name: _____________________
(Signature)

Licensee 1:

Name: _____________________
(Signature)

Licensee 2:

Name: _____________________
(Signature)

WITNESSES

  1. Name: _____________________
    Address: _____________________
    (Signature)

  2. Name: _____________________
    Address: _____________________
    (Signature)

Leave and License Agreement Format: Simplifying Your Rent Agreement Legal Process​

Types of Leave and License Agreements

  1. Residential Agreement

    • Purpose: For renting a property for residential use.
    • Common for apartments, flats, or independent houses.

  2. Commercial Agreement

    • Purpose: For renting offices, shops, or warehouses.
    • Often involves higher rent and stricter terms regarding permissible activities.

  3. Co-Living or Shared Spaces Agreement

    • Purpose: For shared living spaces such as PG accommodations or co-living setups.
    • Includes terms specific to shared utilities and facilities.

  4. Short-Term or Holiday Rentals

    • Purpose: For renting a property for a short period (e.g., vacation homes or event spaces).
    • Typically more flexible terms with limited security deposits.

  5. Industrial Agreement

    • Purpose: For renting factories, industrial sheds, or manufacturing units.
    • Often includes provisions for equipment and operational use.

Stamp Duty Calculation

Stamp duty is a legal tax levied on property agreements to make them admissible in court. The amount varies based on state regulations, type of agreement, and duration.

  1. Key Factors for Calculation:

    • Monthly Rent: Total rent for the agreement period.
    • Security Deposit: Refundable amount paid upfront by the tenant.
    • Agreement Duration: Number of months or years the agreement is valid.

  2. General Formula (varies by state):

    Stamp Duty=(Average Monthly Rent×Agreement Duration in Months)+Percentage of Security Deposit\text{Stamp Duty} = (\text{Average Monthly Rent} \times \text{Agreement Duration in Months}) + \text{Percentage of Security Deposit}

    Example: In Maharashtra, the stamp duty is typically 0.25% of the total rent plus security deposit.

  3. State Variations:

    • Maharashtra: 0.25% of total rent + deposit.
    • Karnataka: Varies between 0.5% to 1% based on rent.
    • Delhi: Fixed rates based on rent slabs.

  4. e-Stamping:
    Many states allow electronic stamping via government portals, making the process simpler and faster.

Critical Components of Leave and License Agreements

  1. Duration and Renewal Terms:
    Clearly mention the start and end dates, with options for renewal if needed.

  2. Rent and Payment Mode:
    State the agreed rent amount, payment method (cheque, online transfer), and due dates.

  3. Security Deposit:
    Specify the refundable deposit amount and the conditions for deductions, if any.

  4. Usage of Premises:
    Define whether the property can only be used for residential or commercial purposes.

  5. Maintenance and Repairs:

    • Day-to-day maintenance: Typically handled by the tenant.
    • Structural repairs: Landlord’s responsibility unless otherwise agreed.

  6. Termination Clause:
    State the notice period (commonly one month) for termination by either party.

  7. Sub-Letting Restrictions:
    Prohibit sub-letting unless explicitly allowed by the landlord.

  8. Inspection Rights:
    Landlord’s right to inspect the property with prior notice.

  9. Legal Jurisdiction:
    Mention the jurisdiction where disputes will be resolved (e.g., local courts).

  10. Force Majeure Clause:
    Covers unforeseen circumstances like natural disasters or pandemics.

Tips for Tenants and Landlords

  1. For Tenants:

    • Always read and understand all clauses before signing.
    • Ensure no unreasonable penalties or obligations are imposed.
    • Verify the landlord’s ownership documents.

  2. For Landlords:

    • Use clear language to avoid ambiguities.
    • Ensure the tenant’s details are accurate, including identity proof (Aadhar, PAN).
    • Periodically inspect the property to ensure compliance.

Why Proper Documentation is Crucial

  1. Legal Validity:
    An unstamped or under-stamped agreement cannot be presented as evidence in court.

  2. Dispute Resolution:
    A well-drafted agreement protects both parties in case of disputes.

  3. Tax Implications:
    Registered agreements help landlords declare rental income transparently.

  4. Avoid Penalties:
    Under-stamped agreements can result in hefty fines and legal complications.

Conclusion

Before entering a Leave and License Agreement:

  • Consult a Lawyer: Especially for commercial or high-value agreements.
  • Use Proper Formats: Adhere to state-specific stamp duty rules.
  • Register the Agreement: Mandatory for agreements exceeding 11 months.

By following these steps, both landlords and tenants can ensure a smooth and legally compliant rental process.

Leave and License Agreement Format: Simplifying Your Rent Agreement Legal Process​

General Questions

1. What is a Leave and License Agreement?

A Leave and License Agreement is a legal contract where the licensor (owner) allows the licensee (tenant) to use their property for a specific period without transferring ownership.

2. How is it different from a rental or lease agreement?

Unlike a lease, a leave and license agreement does not grant the licensee exclusive possession of the property. It merely allows usage rights, making it easier for the licensor to evict the licensee.

3. What are the typical durations for such agreements?

Most agreements are for 11 months to avoid stringent rent control laws. Longer durations may require additional legal compliance, including registration.

Stamp Duty and Registration

4. Is stamp duty mandatory for a Leave and License Agreement?

Yes, stamp duty is mandatory to make the agreement legally valid. The amount varies depending on the state.

5. What happens if I don’t pay stamp duty?

An unstamped or under-stamped agreement is not legally enforceable in court and may attract fines and penalties.

6. Do I need to register the agreement?

Registration is mandatory if the agreement duration exceeds 11 months. For shorter durations, notarization is usually sufficient but not compulsory.

7. How is the stamp duty calculated?

Stamp duty is based on the monthly rent, security deposit, and duration of the agreement. Each state has its specific calculation method.

Key Terms in the Agreement

8. What is the notice period for terminating the agreement?

The standard notice period is 30 days, but it can vary based on mutual agreement.

9. Can I sub-let the property as a tenant?

Sub-letting is typically prohibited unless explicitly mentioned in the agreement.

10. Who is responsible for repairs and maintenance?

  • Day-to-day repairs (e.g., minor leaks, fuse changes): Tenant’s responsibility.
  • Major structural repairs: Landlord’s responsibility unless otherwise agreed.

11. What are common clauses to look for?

  • Rent and Payment Terms
  • Security Deposit and Refund
  • Termination Clause
  • Maintenance Responsibilities
  • Legal Jurisdiction

For Tenants

12. What documents do I need to submit as a tenant?

You typically need to provide:

  • Identity Proof (e.g., Aadhar, PAN)
  • Address Proof
  • Passport-sized photographs

13. Can I use the property for commercial purposes?

Residential agreements are strictly for residential use. Commercial activities require a separate agreement.

14. What if the landlord fails to provide promised amenities?

If the landlord violates the terms, you can serve a legal notice or approach a civil court for breach of contract.

For Landlords

15. How can I ensure my property is not misused?

Include specific clauses in the agreement restricting illegal activities, storage of hazardous materials, and sub-letting.

16. Can I increase the rent during the agreement period?

Rent hikes are allowed only if specified in the agreement. For renewals, a 5%-10% increase is common.

17. What if the tenant refuses to vacate after the agreement ends?

Serve a legal notice to vacate. If unresolved, you can file an eviction suit in court.

Disputes and Legal Issues

18. What if the tenant damages the property?

The agreement should include a clause allowing the landlord to deduct repair costs from the security deposit.

19. Can the agreement be terminated early?

Yes, either party can terminate with mutual consent or by following the notice period mentioned in the agreement.

20. How to resolve disputes arising from the agreement?

Disputes can be resolved through arbitration, mediation, or by approaching the appropriate civil court as per the agreement’s jurisdiction clause.

Miscellaneous

21. Can the agreement be signed digitally?

Yes, digital signing is allowed if both parties agree. However, stamp duty and registration requirements still apply.

22. Is a Leave and License Agreement valid across all states in India?

Yes, but the specific stamp duty and registration rules vary by state.

23. Can I amend the agreement after signing it?

Yes, amendments can be made, but they must be in writing and signed by both parties to be enforceable.