A leave and licence agreement is a legal document that establishes a temporary arrangement between a landlord (licensor) and a tenant (licensee). This agreement is commonly used in the rental housing segment. Here are some key points and explanations related to leave and licence agreements:

1. Purpose and Nature:

• Purpose: The agreement allows the tenant to use the property for a specific period without transferring any ownership rights.
• Nature: It’s a temporary arrangement and doesn’t create a lasting interest in the property for the tenant.

2. Differences from Lease:

• Interest in Property: Unlike a lease, a leave and licence agreement does not create an interest in the property for the tenant.
• Possession: While a lease grants exclusive possession, a leave and licence agreement only provides permission to occupy.

3. Legal Basis:

• Indian Easements Act, 1882: The legal foundation for leave and licence agreements is found in this act, specifically in Section 52.
• License Defined: Section 52 defines a license as a right granted to do something on the immovable property of the grantor, without creating an easement or interest in the property.

4. Revocability and Determination:

• Licenses are Revocable: Unlike leases, licenses can be revoked at the will of the licensor.
• Determinability: The agreement can be determined by the grantor, and licenses are subject to legislation changes.

5. Online Agreements:

• Digital Platforms: Nowadays, leave and licence agreements can be easily created online through various websites.

6. Agreement Format:

• Basic Elements: The agreement includes details such as names and addresses of the licensor and licensee, description of the property, period of occupancy, rent amount, and deposit.
• Terms and Conditions: It outlines terms related to rent, deposit, maintenance charges, permitted use, alterations, and more.

7. Duration:

• 11-Month Duration: Often, leave and licence agreements are structured for 11 months to avoid the mandatory registration requirement under the Registration Act, 1908.

8. Court Decision:

• Kerala High Court: A court decision emphasized that there is no single litmus test to distinguish between a lease and a licence. The intention of the parties and surrounding circumstances should be considered.

9. FAQs:

• Distinction from Rent Agreement: Yes, a leave and licence agreement is different from a rental or lease agreement.
• Meaning of Leave and Licence: It grants the licensee the right to occupy the licensor’s property temporarily.
• 11-Month Duration Explanation: To avoid stamp duty and registration charges, agreements are often kept within 11 months.

In summary, a leave and licence agreement is a flexible legal tool that allows property owners to grant temporary rights to occupants without creating long-term property interests. The agreement’s terms are crucial in defining the relationship between the licensor and licensee.