The Distinction in between lease and license agreements

We examine the key differences in a flat on rent in Navi Mumbai between a lease contract and also a permit arrangement and which is a much better option for leasing a home

In order to promote rental housing in India, room rent in Navi Mumbai the federal government, in 2019, passed the Draft Version Occupancy Act, 2019. The main version of the version law, which would eventually be reproduced by states, attempts to protect the rate of interest of property managers, along with tenants. However, it is essential for both celebrations (landlords as well as lessees) to acquaint themselves with particular details terms that they would discover, at the time of participating in a rental agreement. It remains in this context that we need to go over the distinction between a lease and licence.

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What is a lease in home leasing?

When a property owner, though a signed up arrangement, gives an occupant particular rights on his immovable residential or commercial property for a particular period, in return for the settlement of lease, this setup is known as leasing in lawful parlance.

The term has been defined in Area 105 of the Transfer of Property Act, 1882. “A lease of immovable property is a transfer of a right to enjoy such residential property, made for a specific time, reveal or indicated, or in perpetuity, in consideration of a cost paid or guaranteed, or of money, a share of crops, service or any other point of value, rent house in Navi Mumbai to be made regularly or on defined celebrations to the transferor by the transferee, that accepts the transfer on such terms,” claims Area 105.

What is a permit in residential property renting out?

When a proprietor, for a specific function, gives momentary holiday accommodation of his property to an additional event through an agreement, it is done by issuing a permit, in return for the settlement of rent. Unlike a lease, a licence does not provide various other events with any kind of exclusive possession right over the properties.

The term has been specified in Section 52 of the Indian Easements Act, 1882. “Where someone grants to an additional, or to a definite variety of various other individuals, a right to do, or continue to do, in or upon the stationary residential property of the grantor, rent in Navi Mumbai something which would, in the lack of such right, be unlawful, as well as such right, does not amount to an easement or a rate of interest in the home, the right is called a licence,” checks out Area 54.

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Lease and also permit: Key differences

Nature of belongings

The essential distinction between both setups lies in the fashion in which the renter is allowed to make use of the rented premises. The possession of the said property remains to lie with the landlord under a lease, along with permit arrangement. Nonetheless, while a lease gives the tenant a certain right to utilize the facility for a certain period, a licence only ensures the temporary occupancy or use of the premise by the occupant. Unless you have actually the created consent of the owner to do so, inhabiting another individual’s residential or commercial property protests the law. By doing this, a lease arrangement is essentially a lease, Rental apartments in Navi Mumbai while the approval to use a reception hall for a wedding ceremony is a licence.


Temporary as they are, permits shed legitimacy as soon as the particular task for which it was prepared, is wrapped up. On the other hand, a lease could be signed for a variety of periods– from one year to perpetuity. It is likewise vital to keep in mind right here that a lease pertains to an end, just after the period specified in the agreement, as well as the proprietor, generally can not revoke it before this duration. The very same is not real of licence arrangements. They can be revoked as and when the property owner deems fit. Flats in Navi Mumbai for renting a permit is a personal contract and terminates if either celebration passes away.


Leasing is always a financial deal. Licence agreements could also be authorized without any monetary exchange involved.


Under the 2019 draft law, a rent authority should be established, Rental property in Navi Mumbai which will aid property owners seek the expulsion of lessees. In a licence, since there is no ownership by the renter, the demand for eviction does not develop.


A lease can be transferred to third parties and also legal heirs, flats for rent in Navi Mumbai while a licence cannot be moved. If a residential property is moved to an additional proprietor while it is rented, the brand-new owner is required to act on the terms suggested in the lease contract. The opposite is also real.


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