Leave & Licence Agreements
A leave and licence agreement gives a person permission to occupy and use a property for a period, in return for a licence fee, without transferring any interest in the property. The owner stays in legal possession. It is governed by sections 52 to 64 of the Indian Easements Act, 1882, not by the law of leases.
Whether a document is a licence or a lease depends on what the parties intended and how the property is actually occupied, not on its title. An agreement called a licence that gives exclusive possession for a fixed term can be treated by a court as a lease, with the tenant protections that follow.
When you need it
When letting a flat or house
Most residential lettings in Indian cities are documented as leave and licence agreements.
When taking a co-working or serviced office
Desks, cabins and serviced offices are licensed, with services bundled in.
When a company houses its employees
Company-leased accommodation needs terms on who occupies and what happens when the employee leaves.
When a short or flexible arrangement is wanted
A licence suits a period of months, with either side able to end it on notice.
When an occupant will not leave
How quickly the owner can recover the property depends on whether the arrangement is truly a licence.
How the process works
Four stages. Timings are typical, not promised.
- 1
Agree the terms
Depends on the partiesRecord the premises, the licence fee and deposit, the period, the lock-in if any, who pays maintenance and utilities, the notice to end the licence and how the fee increases on renewal.
Documents
- Details of the owner and the occupant
- The owner’s title document or allotment letter
- 2
Draft the agreement
Commonly a few working daysSet out the permission to use, the permitted use, that no tenancy or interest is created, the licensor’s right of entry, restrictions on alterations and on letting others in, the deposit and its refund, default and termination.
- 3
Stamp, sign and register where required
At signingPay the stamp duty that applies in the state, sign before two witnesses, and register the agreement where the law of the state or its term requires it.
Documents
- Identity and address proof of both parties
- Photographs, where the Sub-Registrar requires them
- 4
Hand over and record
On handoverComplete any police verification of the occupant that local rules require, record the condition of the property and its fittings, and hand over the keys.
Common questions
A lease transfers a right to enjoy the property and gives the tenant exclusive possession. A licence only makes lawful an occupation that would otherwise be trespass. A licensee has no interest in the property, and is not protected by rent control law.
Under the Registration Act, 1908, a lease for more than one year has to be registered. An agreement for eleven months falls outside that rule, so it is widely used to avoid registration. Stamp duty is still payable.
It depends on the state. Some states require every leave and licence agreement to be registered, whatever its length. Elsewhere, registration is advisable where the period is longer, because a registered document is much easier to rely on.
Yes. The Supreme Court held in Associated Hotels of India v. R.N. Kapoor (1959) that the test is the intention of the parties, and that exclusive possession points towards a tenancy unless the circumstances show otherwise.
By the period running out, or by notice as the agreement provides. Once it ends, the licensee has to leave. If they stay, the owner recovers possession through the court, and cannot lawfully remove them by force.
Only for what the agreement allows: unpaid fees, unpaid bills and damage beyond normal wear. The agreement should state when the balance is refunded and what happens if it is delayed.
Yes, by agreement. Many agreements fix the increase in advance, commonly a percentage for each renewal, so that neither side is surprised.
Related
To discuss a leave and licence agreement, write to info@ireniclegal.com or call +91 96547 47331. Written by Adv. Kanika Marwaha Bindal; last updated 7 October 2026.