FAQ – Legal Remedies and Registration of the Leave and License Agreement

As per section 52 of the Easement Act,1882, leave and license is an easement right granted from one person to another. It is in relation to the occupancy of an immovable property. In the absence of such a right, the occupancy of the immovable property shall be unlawful. An agreement of leave and license is entered between the Licensor (owner or legally authorized person to license the property) and the Licensee (person who temporarily ocupies the property). There can be a Residential or a Commercial Leave and License Agreement as well.

• Section 17(d) of the Indian Registration Act,1908 requires a mandatory registration of the lease agreements related to an immovable property if it is for a period of 1 year or more.
• In order to escape such registration fee, people opt for a Leave and License Agreement for a tenure of 11 months instead of entering into a lease agreement for a period of 1 year or more.
• The Occupancy rights of an immovable property for a period upto 11 months is called Leave and License. And if it is for a period of 1 year or more, then it shall be called a Lease. (Maharashtra is a state of exception).

When a leave and license agreement is entered to occupy commercial properties like shops, warehouses, restaurants, office buildings or industrial properties taken on a license to carry out business activities, then such an agreement is called a Commercial Leave and License Agreement.

In case of a licensee/ tenant refusing to vacate the licensed property after the expiry of the license, the landlord, as per section 42 of the Maharashtra Rent Control Act, can make an application before the Competent Authorities in a manner provided in the rules 14 and 1 5 of Order VI of the First Schedule to the Code of Civil Procedure, 1908, as if it were a plant, to the Competent Authority having jurisdiction in the area in which the premises are situated, for recovery of possession of the premises from the tenant or licensee, and get the property vacated.

Section 24(2) of the Act, further provides for a compensation to be paid to the licensor by the licensee which shall be double the amount of the license fee payable by the licensee from the period of the expiry of the license agreement until the recovery of such licensed property from the tenant or licensee by the Competent Authorities.

The Licensee either himself or any other person on his behalf can file a suit against the Licensor for the recovery of the possession of the Licensed property under section 6 of the Special Relief Act 1963. Such suit shall be filed within 6 months from the date of dispossession.

As per section 29 of the Maharashtra Rent Control Act, 1999, the Licensee can move to the Competent Court and make an application to restore services such as electricity, water supply, lift light on stairs etc. The Court if deemed fit, may pass an interim order directing the Licensor to restore such services to the Licensee.

The duration of the Agreement does not matter here. If the rented/licensed premises is located in the Corporation or Municipal area then Rs. 1,000/- Registration Fees are applicable and if the rented/licensed property is located in the Rural Area then Rs. 500/- Registration Fees is applicable.

The onus of getting the Leave and License Agreement registered lies on the Licensor as per section 55(2) of the Maharashtra Rent Control, Act. And if the Licensor fails to register such Agreement, then he shall be liable for an imprisonment of up to three months and a fine of Rs 5000/- (Five Thousand Only).

Nothing more than 4% of the total amount of the License fee paid by the Licensee during the previous Agreement. Any escalation demanded by the Licensor more than the prescribed limit shall entail a penalty of Rs 5000/- and imprisonment up to three months or both.

• Leave and License Agreement as well as the Rental Agreement, both are for a period of 11 months maximum, but the state of Maharashtra, is an exception. In Maharashtra Leave and License Agreement can be for a maximum period of sixty months, but rent agreement is only for a period of 11 months.
  
• Leave and License does not protect the interest of the Licensee. It does not create tenancy rights. It is not transferrable to the successor of the Licensee in case of death. Rent creates tenancy rights. It transferrable to the successor of the tenant. Sublicensing is permitted in Rental Agreement with written consent of the Licensor.
  
• Sublicensing is simply not allowed in Leave and License. Rent is regulated by the Rent Control Act of the concerned state and it is more favourable to the Licensee than the Licensor as compared to Leave and License Agreement.
• leave and License Agreement can be for a period of can be for commercial as well as residential properties, but rent agreement is only for residential purpose.

• Period– The leave and License agreement in Maharashtra can be up to 60 months.
  
• Mandatory Registration– Even if the agreement is less than 11 months, it requires a mandatory registration along with stamping as per section 55 of the Maharashtra Rent Control Act,1999.
  Section 55(2) of the Act makes the licensor, or the landlord responsible for getting the registration done. As per the Maharashtra Stamp Act, the stamp duty in Maharashtra for a Leave and License or Rent agreement shall be a fixed 0.25% of the total amount of the license fee payable by the licensee during the entire term of the agreement.
  
• Tenancy Rights– Tenancy rights are created in the favour of the Licensee.
  
• Sublicensing– Sublicensing of the licensed property is allowed to the licensee only with the consent of the Licensor.
  
• Transferability– Rights can be transferred to the permittable assignees or successors.

Yes, it is possible to register the Agreement of Leave and License online on the official website only if the Licensor and Licensee along with two witnesses are present together. A webcam and a fingerprint scanner are the requirements.

https://efilingigr.maharashtra.gov.in/ereg/

1. Drafting a Leave and License Agreement
2. Payment of the Stamp duty and Registration charges.
3. Providing Identity proof like Aadhar card or PAN
4. Application for registration to be made in the sub-Registrar’s Office
5. Physical presence of the Licensor and the Licensee in the sub-Registrar’s office on the day when the appointment is given for registration.

• Go to https://efilingigr.maharashtra.gov.in/ereg/
• Under the online services section, click on e-leave and license. A dropdown box will open, select leave and license.
• Under the new entry section, select the district of property to be registered under leave and license agreement. Create a password, confirm it, enter captcha, and click on next.
• You need to enter the property details such as entering the property number, district, Taluka, area, address, use of property, click on update. Once updated, next you should enter the party details.
• Select the party type — licensor or owner. Then, enter the party details including surname, first name, age, PAN number, contact, occupation, address – you can enter in English or Marathi, UID number, e-mail ID and click on update.
• Next fill in the rent and other terms. Click on update and view the draft document.
• Once done, you will be on the next page, where you should click on execute document.
• Capture photo and thumb impression and enter save. Finally view the pdf if everything is fine. Click on submit. The copy will be submitted online to the SRO.
• To know the status of the leave and license agreement submitted for e-registration, click on ‘Modify Entry/View Status’. Enter token number, password, and security code. If you want to modify, click on ‘Modify’ or click on ‘View Status’ to check the e-registration status.