Why Leave and License Agreement for House Owners Is Beneficial as Compared To Normal Rent Agreement?
Squatters are the most horrible nightmarish for each property owner. As having possession of their real estate is out of reach for a massive number of folks, time and again, we hear stories of renters unlawfully occupying significant properties. If the squatter declines to check out of your property, as a rule, it translates into a prolonged court clash. Or an out-of-court agreement arrived at on terms that might not necessarily be favourable for you. However, worry not as we have a way out of Leave and License Agreement.
There are two ways in which you can rent out your property:
- You can either carry out a Normal Rent Agreement
- Or you can make a leave-and-licence agreement.
Either way, as a property owner, what you’d want is to rent out your property with the complete security of the law to guarantee ‘vacant and unencumbered’ ownership of the property upon termination of the contracted term.
What is leave-and-license agreement all about?
A leave and license agreement is a contract in which the licensor provisionally permits the licensee to make use of and live in the licensor’s immovable property, to carry out business doings or housing use. For this, the Licensor will compensate by the licensee a set amount called a rental fee. The licesor and licensee register the contract before the sub-registrar. The registration takes place where the property is situated.
The leave and license are different from a Normal Rent Agreement. The Indian Easement Act, 1882 manages the leave and license agreement. As reported by the Indian Easement Act, in case of leave and lease agreement, the landlord leaves the place with an assortment of amenities and offers the same services to the licensee for use while the landlord is on leave for a precise period.
As soon as the leave is over, the proprietor shall come back. The icensee leaves the entire set of amenities when he leavess the property. At this point, the contract is provisional. And as a result, the licensee must not make critical changes in the property. Moreover, the licensee cannot use the property for other activities other than for initially purpose or referred to in the contract.
So is it better for you to carry out a Normal Rent Agreement or a leave-and-license agreement?
Normal Rent Agreement versus leave-and-license agreement
Above-board, even though a Normal Rent Agreement or lease agreement is the safest for tenants, property owners have a preference for the leave-and-license agreement. This is because the leave-and-license agreement does not generate any interest in the property for the licensee. The licensee gets the right to get in, live in, and make use of the property.
In principle, the right to occupy the property under a Normal Rent Agreement or lease agreement is overseen by the provisions of section 105 of the Transfer of Property Act. However, Section 52 of the Indian Easement Act governs the right to live in licensed property. The Transfer of Property Act generates an interest in the land for the leaseholder for the period of the lease. It boosts the leaseholder’s chances of holding on to the land even after the termination of the rent tenure.
Furthermore, the Indian Easement Act generates no titles or curiosity for the licensee. The licensee acquires the right to enter and exploit the property for a restricted period. Besides, the licensor can end the license if he feels to . As a consequence, landholders gain by entering into a leave-and-license agreement.
The report has it that, the Rent Control Act effectively favors the leaseholders and limits the power of the property-owner to regain the property. Nevertheless, in a leave-and-license agreement, an action can be instigated on the illegal occupant who is occupying the land after the termination of the license.
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