What is leave and licence agreement?
Also called: L&L agreement, leave and license, rent agreement Maharashtra
A leave and licence agreement lets someone occupy a property for a fixed period without creating a tenancy. It is the standard rental document in Maharashtra, where registration is compulsory under the Maharashtra Rent Control Act, 1999.
Landlords in Mumbai and Pune use leave and licence rather than a lease for one reason: a licensee gets permission to use the property, not an interest in it. When the period ends, the licensee has to leave, and Section 24 of the Maharashtra Rent Control Act gives the owner a faster eviction route through the Competent Authority. Old-style tenancy, with its protected rents and inherited rights, is what landlords are trying to avoid.
Section 55 of the same Act makes registration compulsory, and the responsibility lies with the landlord. Most agreements are now registered online through the IGR Maharashtra e-registration service, with biometric verification of both parties from home or at a service centre. Stamp duty is 0.25 per cent of the rent payable for the whole period plus a notional amount on the refundable deposit, and the registration fee is ₹1,000 in municipal areas. Police verification of the licensee should be done in parallel.
The typical term is 11 months, though 24 or 36-month agreements with an escalation clause are common in Mumbai. The agreement should state the licence fee, deposit, lock-in, notice period, who pays maintenance and property tax, and the condition in which the flat will be returned.
Outside Maharashtra the label shows up occasionally, but rentals elsewhere are governed by each state's rent law, and where a state has adopted a Model Tenancy Act-style law, the tenancy agreement must be filed with the rent authority instead.
A Powai flat is licensed for 24 months at ₹45,000 a month with a ₹2 lakh deposit. Stamp duty works out to 0.25 per cent of about ₹11.2 lakh (₹10.8 lakh rent plus a notional ₹40,000 on the deposit), roughly ₹2,800, plus ₹1,000 registration and a small service charge.
Signing an unregistered notarised agreement in Mumbai to save a few thousand rupees. It breaches the Act, can attract a fine on the landlord, and weakens both sides in any dispute.
Questions people ask about leave and licence agreement
Is a leave and licence agreement the same as a rent agreement?
It serves the same purpose, but legally it creates a licence, not a tenancy. That gives the owner stronger rights to get the property back when the period ends.
Who pays the stamp duty on a leave and licence agreement?
The law puts the registration duty on the landlord, but in practice the parties agree who pays, and it's often shared or borne by the licensee. Put it in writing.