If
you are looking for a house for rent or a house is rented, then you must have
come up with terms like leave and license agreement, and rent agreement.
Many
people use these words thinking that it is the same things, but in reality,
they are actually two separate documents and there are some important
differences between them. Although in the end, they see the interest of both
the landlord and the tenant, there are differences are:-
Property Ownership
In
a leave and license agreement, the tenant cannot claim any ownership of the
property because the agreement does not fall under the Rent Control Act of India. In this agreement, the owner licenses the property to the "tenant"
and leaves the property.
When
it comes to rental agreements, tenants can claim ownership of the property
after living in the same place for at least 10 years. They can make this claim
under the Rent Control Act of India. In this case, landlords have very limited
options to vacate the tenant or increase the rent.
The
leave and license agreement can be used anywhere in India as a valid address
proof. It is a legal document that binds the licensor in terms of security
amount, rent amount, length of stay, and other payments for the use of the
property. These points cannot be changed once the agreement is signed by both
parties. This is important for the tenant because it protects his rights to
live there and his living conditions are clear.
A
rent agreement that is registered grants the tenant some rights to the
property. In Mumbai, many tenants are still paying Rs. 15 / month due to Rent Control Act and sitting on prime property. According to their rental agreement,
as long as they pay the rent on time, they cannot be evicted. To avoid such a
situation, execute the rental agreement only for 11 months. 11-Monthly rent
agreement does not come under the Rent Control Act.
It
is much safer to leave and license agreement for 11 months. After 11 months,
the agreement should be renewed for the next 11 months. Limit your agreement to
11 months.
Rent Control Act
A
leave and license agreement is governed by the Indian Relaxation Act, 1882.
Here, it states that the owner leaves the property with various facilities; the
same is given to the licensee for use while the owner is on leave for a
specific period. Once the leave is over, and the owner returns, the licensee
departs. When he leaves, it is his duty to leave the house in the same
condition he was given.
He
cannot make any major changes and that is all that should have been given with
the property because the agreement is temporary. The property is to be used
only for the activity that was originally mentioned or outlined in the
agreement. For payment, a large amount is paid by the tenant at the beginning
of the tenancy, and no monthly rent is paid thereafter.
In
the Rent Control Act, the tenant takes the rented property from the landlord,
paying a fixed amount as rent for commercial or residential use. Legally, the
landlord cannot evict the tenant as long as the rent is being paid. The tenant
pays a deposit and the monthly rent that was fixed in the agreement.
Rights of tenants and landlords
If
you look at it, a tenant has far more rights and becomes more preferred when it
comes to a rental agreement as it is regulated by rent control laws. They
prevent landlords from overcharging, giving tenant’s greater right to own
property.
A
leave and license agreement is more landlord / owner friendly as in no case can
their property be taken over by the tenant. There can be no major modification
to their property.
If
you need help with a rental agreement or leave and license agreement, leave it
to the experts at SuGanta.com. We
are here to make your documentation process easy and stress free.
