Landlords often fear that tenants may attempt to take possession of their property after renting it out. While a traditional rent agreement is common, it may not offer the complete protection landlords are looking for. If you want stronger legal security, the “Lease and License” agreement is a better option. This legal document provides greater peace of mind and protects your ownership rights more effectively.
What is a Lease and License Agreement?
A Lease and License is a legal document similar to a rent agreement, but with added clauses that offer more protection to the landlord. While rent agreements are typically valid for 11 months, Lease and License agreements can be created for both short and long-term rentals, ranging from 10 days to 10 years or even more. This flexibility makes it ideal for both residential and commercial properties.
According to property expert Pradeep Mishra, a Lease and License agreement includes specific provisions that prevent tenants from claiming ownership or permanent possession of the property, even after a long stay. This is one of the key differences from a standard rent agreement, which may not explicitly prevent this.
Simple Process to Create a Lease and License Agreement
Creating a Lease and License agreement is as simple as drafting a rent agreement. You can have it prepared on stamp paper through a notary, just like a standard rental deed. If the lease is for a period exceeding 12 years, it must be registered in court to make it legally binding. However, even shorter-term agreements provide strong legal backing.
One of the special provisions in the Lease and License agreement is that it clearly mentions that the tenant has no right to claim ownership or demand any rights over the property. This ensures the landlord’s control over the property, and it is valid for both residential and commercial spaces.
The Key Benefits for Landlords
- Stronger Legal Protection: The Lease and License document clearly states that the tenant cannot claim any rights over the property, even if they reside there for several years.
- Flexibility: Unlike rent agreements, which are limited to 11 months, Lease and License agreements can be customized for periods ranging from a few days to many years, depending on the needs of the landlord and the property type.
- Suitable for Residential and Commercial Properties: Whether you’re leasing out a house or a shop, this document works for both and provides the same level of protection.
- Notary or Court Registration: While shorter agreements can be created with just a notary, longer agreements (over 12 years) must be registered in court, adding an extra layer of legal security.
- Protection from Disputes: The document leaves no room for tenant disputes over ownership, reducing the risk of legal complications in the future.
Conclusion: Why You Should Consider Lease and License
If you’re a landlord worried about tenant disputes or protecting your property from unauthorized possession, a Lease and License agreement is your best bet. It’s easy to prepare, legally robust, and provides long-term security, ensuring your property remains yours no matter how long the tenant stays.
