Differences Between Lease-Rent and Leave & License Agreements
Please find enclosed herewith the required format. It is advisable not to opt for a Rental or Lease agreement. The difference between a Lease-Rent and a Leave & License Agreement is as follows:
- A lease grants the tenant the right to exclusive possession, while a license does not confer such a right on the licensee.
- A lease can be assigned, but a license is generally non-transferable.
- A license is revocable by the licensor under section 60 of the Easement Act unless it falls within the two exceptions mentioned in that section. This implies that a Leave and License agreement cannot be revoked by the licensor if it is coupled with a transfer of property and such transfer is in effect. The agreement also cannot be revoked by the licensor if the licensee, acting upon the license, has undertaken a work of a permanent nature and has incurred expenses in the process. The lease is irrevocable by the lessor.
- A lease is not terminated by the grantor making an assignment or its subject matter, but a license is terminated in such a scenario.
- A lessee can pursue legal action for trespass, but a licensee cannot sue in their own name.
- A lease establishes a heritable right under the Transfer of Property Act and also under the Bombay Rent Act. A license ceases upon the death of a licensee. Upon the death of a licensee, their heirs will not inherit the right as a licensee to utilize the premises.
- A lessee can bear the responsibility of contributing to structural alterations, repairs, and improvements, insurance, and paying taxes and assessments, whereas a licensee cannot bear such responsibilities.
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