Frequently Asked Questions on Leave and License Agreement
Team SoOLEGAL 18 Sep 2023

Frequently Asked Questions on Leave and License Agreement

1.     What is the meaning of a Leave and License Agreement?

A leave and license agreement authorizes the licensee to use and occupy the licensor's immovable property/a portion of it, for a limited time. This agreement specifies whether such property will be used for residential or commercial purposes. The licensee pays the licensor, license fees for this use.

2.     What is the difference between lease and license?

·       A lease gives an exclusive interest in the property whereas license does not.

·       A lease can be assigned to a third person, while a license being a personal right cannot be so assigned / transferred.

·       A lessee can bring an action for trespass in his own name but a licensee cannot do the same. He must do so in the name of the licensor after obtaining his permission.

·       A lease is not revocable whereas a license is revocable


3.     Why is Leave and License Agreement required?

A leave and license agreement is not the same as a rental or lease agreement. In leave and license, the owner leaves the property with various amenities and grants the licensee the right to use it. The owner would return once his license period is over. Leave and license agreements are legal documents that record the parties' promises, terms, and conditions. These terms bind the parties to carry out the agreement's obligations. These obligations include the licensee's obligation to pay the security and consideration for using the property. As this agreement is a legal document, failure to fulfill these contractual obligations can result in legal disputes and penalties.

4.     What should the terms of a Leave and License Agreement include?

·       Parties' relevant personal information, such as full names and residential addresses

·       Specifics about the property in question

·       Lock in Period

·       Payment of consideration/License Fee details

·       Duties and responsibilities of the parties and between them

·       Term of the agreement

·       Details about Security deposit, maintenance, electricity, and water charges, etc.

·       License revocation and renewal

·       Describing the penalty clause, if either party fails to fulfill its obligations

·       Fixture details and property schedule

·       Termination of the agreement

·       Applicable laws, Dispute resolution clause, etc.


5.     What is the locking period in the Leave & License Agreement?

The Locking period is a mutually decided duration between the parties under which parties are restricted to break the agreement. If any party breaks the agreement before the completion of this duration then that party will need to compensate the other party.

6.     What are the documents Required for Leave and License Agreement?

The parties' IDs should be scrutinized in order to confirm the names and permanent addresses of the licensor and licensee. Documents presenting the licensor's clear title to the property in question should be examined as well.

Proprietorship: Required Documents –

·       PAN Card and Aadhaar Card of Licensor/s (Owner of the property)

·       Aadhaar Card and/or any ID Proof of Licensee/s (Proprietor)

·       Aadhaar Card and/or any ID Proof of two Identifiers

·       Electricity Bill or Tax Receipt of the Licensed Premises

In case the Party is a Company –

·       Board Resolution

·       Company PAN and CIN Numbers

·       Aadhaar of Authorized Signatory

In Case the Party is a Partnership Firm –

·       Partnership Deed

·       Authority Letter

·       PAN Card Number of Partnership Firm

·       Aadhaar of all Partners or Aadhaar of Authorized Partner.


7.     What are the legal considerations for Leave and License Agreement?

A leave and license agreement is required to be printed on stamp paper of correct value, as per the laws in different States. A properly stamped and registered leave and license agreement is admissible in court.

8.     Leave and License Agreements is governed by which Act?

The Indian Easements Act of 1882 governs leave and license agreements.


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Did you find this write up useful? YES 0 NO 0
Satish Kaul   25 Oct 2023 6:20pm
Very useful

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