If you are leaving your comfort home and going on a hunt for a house to set up a temporary home for yourself then you must have come across the term “Leave and License”. Let’s go on a tour to understand it.
What Does This Mean?
In The Indian Easement Act a ‘License’ is defined as: “Where one person permits another, or to a certain number of individuals, a right to do, or last to do, in or upon the permanent property of the grantor, somewhat which would, in the non-appearance of such right, be illegal, and such right does not amount to an interest or an easement on the property, the right is called a license” .
A document which is a written understanding between 2 parties is referred as A Leave and License (Agreement), where one party being the owner of a property is eager of giving out their permanent property and the other on certain terms being a party who takes the same to use and conditions agreed between both the parties. The owner in such a case is termed as the “Licensor”, and the person taking the properties is the “Licensee”.
In this Agreement the Licensor offers a restricted right to use the property to the other party for a fixed amount that can be monthly known as “Compensation”. The idea of ‘Leave and License’ exactly indicates that the owner “Leaves” the property with specific facilities and offers a “License” to the Licensee to utilize the property with such amenities offered therein.
At first, glance when you know about a Leave and License agreement it may look the same as a “Rental” arrangement (i.e. A Lease Agreement). Though, a Rental Agreement and a Leave and License are entirely distinct concepts and cannot be considered the same.
What Are The Implications?
The concept of “Leave and License” means that the Agreement itself is of a short-term and static time frame although a Rental Agreement need not have a static period and will remain in perpetuity or till a term of the Agreement is violated by any of the parties. Related to a lease agreement, a leave and license agreement has restricted authority with concerns to the property. It does not create any interest or transmit the interest in the permanent property. These are the reasons a Leave and License is favored by the owners of the properties to ensure their property.
A Licensor Or A Licensee Friendly Agreement
The focus of the terms in an Agreement for a Leave and License diverges varying on who has made the agreement. Currently, as far as the Licensee is involved, it should be that they can use and get the property as per the terms of the License till the time they don’t do anything harmful to the property.
As an owner of property hopes to make income from his property by “Licensing” it out, they may also be anxious regarding the consequences in Tenancy laws. These laws offer legal rights in specific circumstances in the property to the renter. Leave and license is a method in which a landlord can put the property to good use with no worry of him being compelled to resort to the prolonged lawsuit to recuperate their property.
This is all about the Leave and Licence agreement. Stay tuned with us to know more about such terms that a landlord or a renter is unaware of.
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