Loan for Home

What is a Leave and License Agreement?

By Tata Capital
19 December 2025
9 mins read
1953

Whether you’re a young professional relocating for work or someone planning to earn passive income from your property, you’ll likely come across a lot of paperwork. One such document is a leave and license agreement.

While it is often confused with a rental or lease agreement, it has distinct features that set it apart. Knowing what a leave and license agreement is can help both property owners and tenants make informed decisions in the real estate market.

This article dives into the basics of a leave and license agreement; meaning, purpose, and the circumstances under which it is preferred to other kinds of real estate agreements.

What is a Leave and License Agreement?

A leave and license agreement is a legal contract operating between a property owner (licensor) and an occupant (licensee) and it grants the occupant a conditional, revocable permission to use the property while fully retaining ownership rights in the property.

Difference Between Leave And License And Rental Agreement

The Rent Control Acts that are in place at the state level govern rental relationships. This includes several aspects of a rental agreement, including the amount of rent that a property can accrue, the conditions for periodic inflationary increase in the rent, and the conditions of a valid eviction.

This limits the extent to which parties can freely decide the terms of their agreement, and means that either party may seek judicial redress for any of these issues. This can potentially put both parties in the middle of a long, tedious and expensive litigation process, during which time the property may also have to remain unutilised.

A leave and license agreement, on the other hand, does not fall under the purview of rent control regulations. This means that the parties can, within reason, mutually decide the terms and conditions that govern their contract. The table below summarises key differences:

Basis	Leave and Licence Agreement	Rental Agreement
Legal character	Grants conditional and revocable permission to use the property.	Grants possession of the property.
Duration	Usually entered into for short, renewable terms.	Usually entered into for longer terms subject to renegotiation.
Purpose	Flexible – for residential or commercial use.	Mainly used for residential purposes.
Termination	Often quicker, governed by the agreement itself.	Often lengthier, governed by processes under applicable law.

Why is a Leave And License Agreement Preferred?

Protection for the licensor

It offers significant protection to the property owner. For instance, if the licensee refuses to vacate the premises after the agreement expires, the licensor can seek legal recourse under the terms of the agreement itself, without the complexities of a formal eviction process.

Flexibility for commercial and residential use

Leave and license agreements are commonly used for both residential and commercial properties. For business licensees, especially startups and small enterprises, this arrangement provides flexibility to scale operations without being tied down by long-term rental contracts.

How to Register a Leave and License Agreement in India

In India, it’s crucial to know how to register your leave license. When you register your leave and license agreement, it becomes fully legally enforceable and protects the rights of both the licensor (owner) and the licensee (tenant). Here’s how to complete your offline or online leave license registration.

Online leave license registration process

Visit your state’s Registration and Stamps Department website.
Create an account and fill in the agreement details online.
Upload the required documents and photographs.
Pay any stamp duty and registration charges digitally.
Book a biometric verification appointment.
Complete the verification.

You will then receive your digitally signed agreement.

Offline leave license registration process

Prepare a Leave and License Agreement with all relevant details, such as rent, security deposit, tenure, and responsibilities of both parties.
Visit your local Sub-Registrar and pay the necessary stamp duty and fees. Then get the license agreement stamped.
Submit the necessary documents ready (such as ID and proof of address for both parties, passport-size photographs, and the stamped agreement).
Sign the agreement in front of at least two witnesses.
Once the document verification and registration process is completed, you can collect the stamped and signed agreement from the Sub-Registrar’s office.

Stamp Duty and Registration Charges for Leave and License Agreements

Leave and license agreements are legal documents, meaning the government charges a leave license fee, known as “stamp duty.” Without paying this fee, the document is not yet legally valid or binding. This charge confirms that the document has been registered with the government and is legally enforceable.

The leave license stamp duty varies by state, typically between 0.25% to 4% or more. It is calculated using several factors, including:

Monthly rent
The security deposit
The agreement tenure

For instance, in Maharashtra, stamp duty is generally around 0.25% of the total rent plus the security deposit. On the other hand, in Delhi, registration may require a stamp duty of about 2% of the average annual rent.

Registration charges for leave and license are usually a fixed charge set by the state registrar’s office. For a more accurate calculation, you can either consult the official state stamp duty portal or use online stamp duty calculators for leave license offered by legal platforms.

Format of Leave And License Agreements

While there is no fixed leave and license agreement format, it typically includes the following components to ensure clarity and legality.

Details of the parties

The agreement must specify the names and addresses of the licensor and licensee.

Description of the property

The property being licensed must be clearly described, including its address, dimensions, and any specific usage restrictions.

Duration

The agreement should specify the exact start and end dates. For agreements exceeding 11 months, registration is mandatory.

License fee and security deposit

The agreement must mention the monthly license fee and any refundable security deposit. It should also outline the terms for amending the license free, and adjusting or returning the deposit.

Rights and responsibilities

Details regarding the obligations of each party, including maintenance, repairs, and utility payments should be explicitly mentioned.

Termination

A well-drafted termination clause should outline the circumstances under which either party can terminate the agreement and the notice period required.

Indemnity clause

This protects the licensor against losses incurred from certain acts by the licensee.

Dispute resolution

The agreement should include a preferred dispute resolution mechanism, such as arbitration or mediation.

Additional terms and conditions

This includes the details like the governing jurisdiction, and any penalties for breach of terms.

Also,read: How to Claim Stamp Duty Exemption on Property?

Leave and License Agreement Template: Free Download

If you are struggling with writing up a leave and license agreement, templates online can be a helpful option. A free leave license template is a prewritten, preformatted document that includes all essential clauses required for legal validity in India. Multiple websites offer a leave license draft PDF for users.

Rental agreement leave license formats should include the following information:

Full personal details of both parties, including complete names, ages, and current residential addresses
Clear description and address of the licensed premises
Rent or licence fee details, including amount, payment mode, and due dates
Roles, obligations, and responsibilities of both the licensor and licensee
Licence period or total duration of the agreement
Security deposit amount, refund terms, and adjustment conditions
Clarity on maintenance costs and utility charges, such as electricity and water
Terms for early termination, renewal, or extension of the licence
Penalty provisions outlining the consequences of default or breach by either party
List of fixtures, fittings, and an attached property inventory or schedule
Whether sub-licensing is allowed and under what conditions
Standard legal clauses covering governing law, dispute resolution, confidentiality, and termination
Date on which the agreement is executed and signed

Step-by-Step Guide to Registering Your Agreement

In India, you can register your leave license agreement registration process can be carried out online or in person. Below, we outline a step-by-step leave license registration guide:

Offline leave license registration guide

Draft the agreement, including all relevant details.
Visit your local Sub-Registrar’s office and pay the stamp duty. Attach the stamp duty receipt to the agreement.
Submit the necessary documents (like proof of address and ID, stamped copies of the agreement for both parties, and proof of property ownership).
Submit the documents and sign the agreement in front of at least two witnesses.
Collect the digital and physical copies.

Online registration steps

Visit the state registration portal
Enter agreement details
Upload documents
Pay fees online
Book and complete biometric verification

Common Mistakes to Avoid in Your Leave and License Agreement

When drafting a leave and license agreement, mistakes can expose you to legal issues later. Below, we look at some common errors in agreement drafting and agreement drafting tips:

Incorrect stamp duty: Paying less than required can invalidate the agreement or attract penalties. Always check state-specific rates.
No registration: Skipping registration can weaken legal protection, especially during disputes or evictions.
Unclear clauses: Vague terms on rent, notice, maintenance, or exit often lead to conflicts later.
Missing documents: Incomplete IDs or proof of ownership can lead to rejection or delays.
Ignoring state rules: Stamp duty and registration norms differ by state. Remember to check your local requirements.

To avoid mistakes in your leave license, use reliable templates, double-check calculations, and consider professional review before signing and registering the agreement.

Summing Up

A leave and license agreement offers flexibility and ease of enforcement. It also protects the interests of the landlord more thoroughly, and provides both parties with a more efficient alternative to lengthy litigation.

While the ownership and letting out of property is a complex process, Tata Capital can help simplify the process of financing your home. In addition to the attractive housing loan rate of interest, the housing emi loan calculator allows you to reliably plan your expenses.

To learn more, visit the Tata Capital website, or download the app.

FAQs

Why is a leave and license agreement for 11 months?

It is not mandatory for leave and license agreements entered into for a period of up to 11 months to be registered. The short duration also allows the parties to frequently renegotiate the terms for renewal.

What is the maximum period for a leave and license agreement?

Legally, there is no fixed maximum period, but agreements exceeding 11 months require mandatory registration with applicable stamp duty.

What is the lock-in period in a leave and license agreement?

The lock-in period, if included, is a mutually agreed duration during which neither party can terminate the agreement prematurely.

Is a leave and license agreement safe?

It is legally binding and ensures the licensor retains property control, while the licensee’s rights are safeguarded through clearly defined terms. It is recommended that a leave and license agreement for any duration be registered to prevent future disputes.

What is the difference between leave and license and rent?

A rent agreement is governed by the state’s rent control laws, including the amendment of its terms, its extension and termination. A leave and license, on the other hand, is governed not by rent control laws, but by terms arrived at by the parties through mutual agreement.

Is registration mandatory for a Leave and License Agreement in India?

In most states, leave and license agreement registration is mandatory, especially if the term exceeds 11 months. In other states, registration is compulsory regardless of the term.

What is the difference between a licensee and a tenant in Indian law?

A licensee’s meaning in rent agreements is someone who has temporary permission to use the property without possession rights. On the other hand, tenants enjoy legal possession and stronger protection under rent control laws.

Can a landlord terminate a Leave and License Agreement early?

Yes, early termination is permitted if the leave and license agreement registration includes a termination clause and the landlord complies with the specified notice period and conditions.

How long can a Leave and License Agreement be valid for?

What is the leave and license agreement's validity? In most cases, they’re valid for up to 11 months, after which they must be renewed or re-executed.

What documents are required to register a Leave and License Agreement?

Typically, for leave and license agreement registration, Aadhaar and PAN of both parties, passport-size photographs, a stamped agreement, proof of property ownership, and the registration fee receipt are required.

Previous Post Disclaimer Next Post

Menu

What is a Leave and License Agreement?

What is a Leave and License Agreement?

Difference Between Leave And License And Rental Agreement

Why is a Leave And License Agreement Preferred?

Protection for the licensor

Flexibility for commercial and residential use

How to Register a Leave and License Agreement in India

Online leave license registration process

Offline leave license registration process

Stamp Duty and Registration Charges for Leave and License Agreements

Format of Leave And License Agreements

Details of the parties

Description of the property

Duration

License fee and security deposit

Rights and responsibilities

Termination

Indemnity clause

Dispute resolution

Additional terms and conditions

Leave and License Agreement Template: Free Download

Step-by-Step Guide to Registering Your Agreement

Offline leave license registration guide

Online registration steps

Common Mistakes to Avoid in Your Leave and License Agreement

Summing Up

FAQs

Why is a leave and license agreement for 11 months?

What is the maximum period for a leave and license agreement?

What is the lock-in period in a leave and license agreement?

Is a leave and license agreement safe?

What is the difference between leave and license and rent?

Is registration mandatory for a Leave and License Agreement in India?

What is the difference between a licensee and a tenant in Indian law?

Can a landlord terminate a Leave and License Agreement early?

How long can a Leave and License Agreement be valid for?

What documents are required to register a Leave and License Agreement?

Subscribe

Most Viewed Blogs

Trending Blogs

Calculator

Follow Us