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Commercial Leave & License Agreement (Drafting)

“Where one person grants to another, or to a definite number of other persons, a right to do or continue to do, in or upon immovable property of the grantor, something which would, in the absence of such rights, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.”

A leave and license agreement is an agreement wherein the licensor allows the licensee to temporarily occupy and use one portion of immovable property for carrying on his business or residential purposes.“Where one person grants to another, or to a definite number of other persons, a right to do or continue to do, in or upon immovable property of the grantor, something which would, in the absence of such rights, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.”

LEAVE AND LICENSE AGREEMENT (Commercial)

 

BASIC INFORMATION

 

A leave and license agreement is an agreement wherein the licensor allows the licensee to temporarily occupy and use one portion of immovable property for carrying on his business or residential purposes.

 

Section 52 of Indian Easement Act, 1882 defines License as under:

“Where one person grants to another, or to a definite number of other persons, a right to do or continue to do, in or upon immovable property of the grantor, something which would, in the absence of such rights, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.”

 

FEATURES OF COMMERCIAL LEAVE AND LICENSE AGREEMENT

 

1. LEGALLY ENFORCEABLE : Leave and license agreement is legally enforceable agreement. On the breach of any terms and condition of leave and license agreement by licensor or licensee they both can sue each other on the basis of Leave and license  agreement.

 

2. ADDRESS PROOF : Commercial leave and license agreement is a authentic proof for your Private limited/LLP/ or any other business entity as a registered office.

 

3. CLARITY : A registered leave and license agreement ensures that neither the tenant nor the owner can go back on their commitments or exceed their stay in case of a dispute.

 

4. DEDUCTION FROM BUSINESS INCOME : For authentic deduction of income from business Auditor/CA may ask for leave and license agreement. Leave and License agreement mention specific clause regarding rent so it will help you in case of deduction of rent from business income.

 

5. GST REGISTRATION : Commercial leave and license can also be utilized for GST Registration as an authentic proof.

Documents


Passport Photo

Passport photo of all parties.


PAN Card

PAN card of all parties.


Aadhar Card

Aadhar card of all parties.


Utility Bill

Utility bill of Electricity or Telephone.


Address Proof

Valid Address Proof of all the parties.


Licence

Valid Driving Licence of all the parties.


Terms and Conditions

Terms and Conditions between the parties.


Other Documents

Other documents will be intimated through e-mail.

FAQ

A leave and license agreement is an agreement wherein the licensor temporarily allows the licensee to use and occupy licensor's immovable property full or a portion of it, for the purpose of carrying business activity or residential use.

A lease is a transfer of an interest in a specific immovable property, while licence is a bare permission, without any transfer of an interest. A lease creates an interest in favour of the leassee with respect of the property, but a licence does not create such an interest.

A leave and license agreement needs to be stamped and registered. The stamp duty payable in case of a lease deed is more than what is payable towards a leave and license agreement's registration.

A licensee is someone who has a license to occupy a room or home. They aren't protected by the laws that protect tenants, but they may have a contract which gives them extra rights.

An unregistered lease deed does not create the legal relationship between the lessor and lessee. The court will proceed according to the law. It is not for the court to permit or disallow the landlord to register the deed with or without penalty.

Any agreement for leave and licence has to be in writing and it is mandatory to register the agreement.

The responsibility of getting such agreement registered shall be on the licensor.