What You Need To Know about Leave and LicenseAgreement

Indian Property Lawyers highlight the important points to keep in mind about aRental Agreement, also called a Leave and License Agreement While dealing withRent/Lease contract in either capacity (as a Landlord and Tenant OR Lessor andLessee), one must avail the services of competent professional lawyer as it involvesthe legal provisions of the Contract Act and Transfer of Property Act.

What is a Rent/Lease Agreement?

An agreement by which the owner of an immovable property/a person dulyauthorized by the owner or a competent person enters into a contract with anotherperson for possession, enjoyment and use of the said property for a specified periodand purpose against valid consideration is called “Rent or Lease Agreement.” Theowner of the property is called “Lessor” and the person acquiring the right to enjoy/use the property is called “Lessee.”

Parts of Rent/Lease Agreement

1. Consideration - Rent payable including premium (if any) is mentioned in this part.2. Operative part - It should show clearly the Lessor divesting himself of possessionand lessee coming into possession.3. Habendum - The nature of the lease, commencement and duration of the term arespecified here.4. Reddendum - The mode of payment of consideration including time, place andinstallments of payment are mentioned in this part.

5. Covenants - Terms and conditions governing the lease such as purpose, payment oftaxes, repairs, insurance, subletting etc are mentioned in this part.

Normal Lease Agreement must contain the following clausescovering the aforesaid parts:

• Proper identification of the parties to the contract

• Clear title of the Lessor - The lessor must be the legal owner of the property or aperson duly authorized by him or a person authorized by court to enter into suchcontract.

• Proper identification, area and demarcation of the property to be rented/leased.

• Tenure of the lease - The duration/period of the lease must be clearly mentionedwith or without a provision for further renewal of the same. On expiry of the saidperiod, the lease stands determined until and unless it is renewed further.

• Purpose of the lease - Whether the property will be used for Residential,commercial or charitable purpose. Use of the property for any purpose other than asmentioned in the agreement, makes the agreement void and liable to be cancelled andcompensation needs to be paid.

• Other charges - Any other charge(s) such as for maintenance, security, electricity,water, gas etc or for any other facility, payable by the tenant/lessee, must bespecifically mentioned in the agreement to spare both the parties any heartburn lateron.

• Access to common/ancillary facilities - The agreement must specify the availabilityor otherwise, of the other facilities such as use of common passage, roof, park,swimming pool, car parking, library, club, gymnasium etc besides the demised anddemarcated property, and charges payable (if any) for such facilities.

• Furnished flats - In case of furnished flats the agreement must contain the completelist of furniture/appliances/gadgets etc with respective specifications. Quantum ofcompensation for loss or damage to such furniture/appliances must be provided for inthe agreement to avoid any miscommunication later.

• Maintenance of the lease Property - Normally this requirement arises when theproperty is leased for a very long period. In such cases, the onus ofrepairing/maintenance of the property must be clearly spelt out. The agreement mustalso contain, in such cases, liability of the defaulting party to compensate the otherparty, for the losses and damages.

Determination of LeaseIt may occur in any of the following ways and must be reflected in the agreement.

A) By efflux of time - On expiry of the lease termB) By notice - After expiry of the notice period served by the either partyC) By express or implied surrender by the lesseeD) By Forfeiture – By violation of the terms and conditions, by purchase of theproperty by the lessee, when lessee becomes incapable of entering into contract.

ABOUT USAkshaya was founded in 1995 under the stewardship of Mr. T. Chitty Babu, a leadinglight of the Real Estate Industry in India. It has grown into one of the most awardedcompanies in the country acclaimed for its transparent business practices andinnovation. The journey over the last 19 years has seen the company excel in both thehome and commercial domains by building more than 150 magnificent edifices inSouth India.

CONTACT USAkshaya Private Limited

Capitale,No. 22, 2nd Street, Nehru Nagar,

Adyar, Chennai - 600 020.Tel: 044 - 2445 1818

Website: www.akshaya.com