Lease/license Agreement

Which one do you need? A Lease or licence agreement?

The growing renting services in India has led to major advancements where more and more people can afford living in the city at minimal costs. Despite being useful for all, it is more prominent amongst the people who can either not afford buying a house due to massive prices or the ones who live far away from their hometowns.

Furthermore, the government passed the Draft Model Tenancy Act 2019, to promote and encourage the rental services in India. This law guards the interest of both the parties, the landlord and the tenant in numerous ways.

Are lease and licence agreements the same?

A Licence agreement is somewhat of a similar kind to lease, but holds its individual importance and details. Unlike the lease, a licence does not offer possession of the property to the tenant and limits the duration until the completion of  specified purpose.

However, it is important for both the parties to understand and acknowledge the terms and conditions that might be included in the lease or licence agreement for better cooperation and convenience.

What is a lease agreement?

If the landlord offers some rights regarding the immovable property under his ownership, for a set duration of time, it is known as leasing in a legal term. The decided price or rent is paid to the owner for leasing the immovable property. The rent paid may or may not be in the form of kind. However, all of it is pre-decided by both the parties and agreed upon in the ease agreement.

What is a licence agreement ?

In case of licence agreement, the owner or the landlord offers temporary accommodation to the tenant in his property on the payment of a specific rent. Unlike a lease agreement it does not offer an exclusive proprietorship or control over the property.

In the presence of a licence, the actual ownership remains with the landlord while the accommodation continues without the actual landlord-tenant relation.

How does a lease agreement differ from a licence?

Despite being similar in the course of action, the lease and licence agreement are quite different at the core.

Possession of the property: According to a lease agreement, the tenant is given a few rights relating to the usage of the property and possession for a specific time duration.

However, with a licence agreement, the tenant or the party may enjoy short term occupancy only. The occupancy of a property without the right permission of the owner is legally unacceptable.

Henceforth a lease agreement is same as the rent agreement while on the opposite, using a property for specific purposes comes under a licence agreement.

Duration of occupancy: The time duration for lease may vary from months to years to being a permanent agreement. However, a licence comes to an end once the purpose of occupancy is fulfilled.

Further the lease agreement cannot be revoked by the landlord before the mentioned time period in the agreement while it is not the case in a licence agreement. In the latter case, the agreement reaches the termination in case either of the parties die.

Transaction medium: The lease deeds are usually based on monetary transactions, while a licence may or may not include the same.

Eviction process: In case of lease, the landlord can proceed for eviction formalities, if needed, according to the drafted law 2019. However, the same does not hold similar importance in case of licence as the possession of the property is not held by the tenant in a licence agreement.

Transfer of possession: The lease of a property can be transferred to a third party or legal heirs if needed. The third party would then be liable to follow or act according to the terms and conditions mentioned in the agreement. However, a licence agreement cannot be transferred.

A lease may or may not continue in case the property is sold to a third party for some reason. However, a licence does come to an end in case of such an instance.

Where can I find help with legal documentation?

Official paperwork like that of a lease and licence agreement is not only important but legally significant. Hence, they must be checked before the final signatures are done.

Furthermore a party may or may not be confused about what exactly to choose amongst a lease and licence agreement which can be best resolved with professional and legal support.

Hence, to help you with the same legally you must find assistance with legal help online India services. You can easily find and hire a lawyer according to your necessity for free legal advice online in Delhi. It best helps you in saving time, effort and energy without compromising on the quality and professional experience necessary for the legal process.