Leave & License Agreement

It is a legal document showing the relationship between a licensor and a licensee. This agreement includes the permission granted by an owner to a tenant to use their property over a specific period. 

It is important to note that an L&L agreement differs significantly from an agreement as it does not establish a landlord-tenant relationship. A licensor maintains ownership and control of the property while allowing temporary occupancy rights.

Difference Between Leave and License Agreement and Rental Agreement

You can check the below points to learn how an L&L Agreement differs from a rental agreement:

• Ownership: Ownership remains with the licensor in case of an L&L agreement. Meanwhile, tenants acquire a temporary interest in the property in a rental agreement.
• Rights: A licensee has limited rights compared to a tenant. This is because tenants have more legal protection under tenancy laws.
• Eviction: Evicting a licensee is usually easier than evicting a tenant due to the absence of a landlord-tenant relationship.

Advantages of a Leave and License Agreement

Now that you know how an L&L agreement differentiates from a rental agreement, let’s delve into the benefits of this agreement:

• Flexibility: Both parties can customise this agreement to meet their specific needs.
• Ease of Eviction: It offers licensors more flexibility to terminate the agreement.
• Avoidance of Rent Control Laws: An L&L agreement can help both involved parties avoid the complexities of rent control laws.
• Tax Benefits: There might be tax benefits for both the licensor and licensee under specific circumstances.

Components of a Leave and License Agreement

You will find the following clauses inserted in a properly designed leave and license agreement:

• Involved Parties: The licensor’s and licensee’s name address, and contact details are included. 
• Property Description: A detailed description of the property is provided along with the address, dimensions, and other features.
• License Period: It clearly mentions the start and end date of the agreement.
• License Fee: The total license that the licensee fee needs to pay is mentioned along with the inclusion of payment terms and escalation clauses. 
• Security Deposit: A security deposit is paid by the licensee to the licensor. So the security deposit amount with conditions for its refund are mentioned.
• Use of Property: A licensee can only use a property as mentioned in the leave and license agreement. Therefore, every restriction and obligation is stated as well.
• Maintenance and Repairs: The responsibilities of the licensor and licensee regarding property maintenance are explained clearly in an L&L agreement.
• Dispute Resolution: Problems may arise between involved parties. Thus, mechanisms for resolving disputes such as arbitration or mediation are included in the agreement.
• Termination Clause: Conditions are explained briefly which can result in the termination of the agreement by either party.
• Governing Law: The law governing the agreement is stated for validation.

Leave and License Agreement Format

There is no specific format set by the law. However, a typical leave and license agreement includes the following sections:

• Introduction: An L&L agreement always contains the names of parties, property details, and agreement commencement date.
• Recitals: The background information about the agreement is usually available in the document.
• Agreement Terms: License fee, rental period, security deposit, etc. are clearly explained.
• Execution: Signatures of both parties are mentioned along with the date of execution and witnesses.

Factors Affecting Online Rent Agreement Registration Charges

The process of registering a leave and license agreement online has gained popularity due to its convenience. The charges for online registration varies location to location and depend on the following factors: 

• State-Specific Stamp Duty: Location primarily influences the registration cost.
• Agreement Value: The registration charge increases if the agreement value is higher.
• Property Location: Urban areas typically involve higher registration charges when compared to rural areas.
• Additional Services: Some online platforms offer additional services such as document verification, legal assistance, etc. These services may require you to pay extra charges.

Advantages of Leave and License Agreement Online

You will find several online platforms offering services for creating and registering leave and license agreements. Using these platforms can provide you with the following benefits:

• Convenience: Online platforms provide you with easy access to the agreement and simplify the document generation process.
• Time-Saving: Traditional methods are time-consuming. Thus, online L&L agreements save your time and ensure a hassle-free experience.
• Legal Compliance: Online platforms follow all the legal requirements ensuring zero error while preparing the agreement.
• Security: It provides both parties with safe and secure storage for the documents.

Conclusion

The leave and license agreement is a crucial document for both property owners and occupants. Understanding its elements such as the format and registration process is essential to protect your interests. You can also establish a clear legal framework for your property arrangement with the different things explained in this blog.

Frequently Asked Questions 

Is it mandatory to register a leave and license agreement?

It is not mandatory to register an L&L agreement but you should consider doing so. This is because it provides you with legal protection and serves as proof of the agreement. The specific rules regarding registration differ in every state, so it is essential to know the local regulations.

What is the difference between a leave and license agreement and a rental agreement?

An L&L agreement grants permission to occupy a property for a specific period without transferring ownership rights. While a rental agreement creates a landlord-tenant relationship with the tenant acquiring temporary property interest. When compared to rental agreements, L&L agreements offer more flexibility for the property owner.

Can the rent be increased during the term of a leave and license agreement?

Yes, rent can be increased during the term of an L&L agreement. However, terms for rent increases should be clearly outlined while developing the document. 

What happens if the licensee defaults on rent payment?

The licensor has the right to take legal action in case a licensee fails to pay the rent as per the agreement. However, the actionable step depends on the terms of the agreement and applicable laws. So, it is essential to have clear provisions for rent default in the agreement.

Can the licensee sublet the property under a leave and license agreement?

Generally, subletting is not allowed under an L&L agreement unless explicitly permitted in the contract. Subletting without permission can lead to the termination of the agreement.