Quick answer: A leave and licence agreement lets someone occupy a property for a fee without transferring any interest in it, which is why Maharashtra landlords prefer it to a lease. In Maharashtra, every leave and licence agreement must be registered under Section 55 of the Maharashtra Rent Control Act, 1999, whatever its term. Stamp duty is 0.25% of total licence fee, non-refundable deposit and a notional 10% yearly interest on the refundable deposit, plus a ₹1,000 registration fee in municipal areas.
If you've rented in Mumbai or Pune, you've signed a leave and licence agreement whether you noticed the title or not. The name isn't a Maharashtra quirk. It reflects a different legal relationship, and that difference is the whole reason landlords there use it.
What is a leave and licence agreement?
Section 52 of the Indian Easements Act, 1882 defines a licence as a right granted by one person to another to do something on the grantor's property which, without that right, would be unlawful, and which doesn't amount to an easement or an interest in the property.
The key words are "no interest in the property". A lease under Section 105 of the Transfer of Property Act, 1882 transfers a right to enjoy the property, which is an interest. A licence only grants permission. The owner (licensor) keeps legal possession; the occupant (licensee) uses the premises with permission.
Courts look at substance over labels. If a document called "leave and licence" gives exclusive possession for a long fixed term with all the features of a lease, a court may treat it as a lease. Drafting matters.
Why landlords in Maharashtra prefer leave and licence
The Maharashtra Rent Control Act, 1999 protects tenants strongly. A licensee under a registered leave and licence agreement doesn't get the same tenancy protection. Section 24 of the Act entitles the licensor to recover possession when the licence expires, and a licensee who refuses to leave is liable to pay damages at double the licence fee for the period of overstay. Certain categories of licensors, such as members of the armed forces and government employees, can use a faster Competent Authority procedure.
That's a much cleaner exit than a contested eviction under rent control. It's also why landlords insist on registration: an unregistered arrangement weakens their position.
Leave and licence vs rent agreement: the key differences
Point
Leave and licence
Rent agreement (lease)What's transferred | Permission to occupy; no interest | Interest in the property (right to enjoy)
Governing law | Indian Easements Act, 1882; Maharashtra Rent Control Act, 1999 | Transfer of Property Act, 1882; state rent law
Registration in Maharashtra | Compulsory for every term (Section 55) | Compulsory for every term (Section 55)
Overstaying | Double the licence fee as damages (Section 24) | Eviction through rent law process
Transferable? | No; personal to the licensee | Can be assigned if the lease allows
Ends on owner's death or sale? | Generally ends; licence is personal | Lease binds the new owner
The difference between a rent agreement, a lease agreement and a lease deed outside Maharashtra is covered in our guide on rent agreement vs lease agreement.
Stamp duty and registration fees
Maharashtra calculates stamp duty on leave and licence agreements with a formula under the Maharashtra Stamp Act:
- A = monthly licence fee × number of months
- B = any non-refundable deposit or advance licence fee
- C = 10% × refundable deposit × number of years (notional interest)
- Stamp duty = 0.25% × (A + B + C)
Registration fee: ₹1,000 in municipal corporation areas, ₹500 in rural areas. A document handling charge is also levied.
Worked example (Pune, 11 months): Licence fee ₹30,000 a month, refundable deposit ₹1,50,000. A = ₹3,30,000. C = 10% × ₹1,50,000 × 11/12 ≈ ₹13,750. Total ≈ ₹3,43,750. Stamp duty at 0.25% ≈ ₹860 (rounded up to the nearest ₹100 per IGR practice, so confirm on the calculator). Plus ₹1,000 registration.
Always run your figures through the IGR Maharashtra stamp duty calculator before paying. For other states, see our stamp paper guide.
How to register a leave and licence agreement online
Maharashtra is ahead of most states here. The IGR's online leave and licence system lets the parties register without visiting the Sub-Registrar, using Aadhaar-based biometric authentication. In Mumbai City and Mumbai Suburban, Leave and Licence 2.0 has run since 1 May 2025.
- Draft the agreement with the licensor, licensee, property, licence fee, deposit, term and clauses.
- Log in to the IGR portal (or use an authorised service provider) and enter the details.
- Pay stamp duty and registration fee online through GRAS.
- Authenticate each party through Aadhaar biometrics. Service providers bring a fingerprint device to your home.
- Add two witnesses, also authenticated.
- Submit and download the registered agreement with its registration number.
What goes wrong: the property address doesn't match the society's records or the Index II, or the Aadhaar-linked mobile number is inactive. Check both before the appointment.
Documents needed for registration
From the licensor (owner)
From the licensee (occupant)
Witnesses (two)Aadhaar (linked to an active mobile number) | Aadhaar (linked to an active mobile number) | Aadhaar
PAN | PAN |
Property document: Index II, sale deed, or latest property tax bill / society share certificate | Passport-size photograph |
Society NOC, if the society requires one | For companies: board resolution or authorisation letter |
Power of attorney, if signing for the owner |
|
If the owner lives abroad, a registered or consularised power of attorney lets a representative complete the process in India. Our post on rent agreements when the landlord lives abroad covers the steps.
Mistakes that cost licensors and licensees
- Leaving it unregistered "because it's only 11 months". In Maharashtra, there's no 11-month exemption. Section 55 applies to every term, and the landlord carries the liability.
- Calling it a licence but drafting a lease. Granting exclusive possession with no right of the owner to enter, or allowing the occupant to sublet, pushes the document towards a tenancy. Keep the licensor's access and control clauses in.
- Under-declaring the deposit. Showing a smaller deposit to save stamp duty undermines the licensee's refund claim, because the registered figure is what courts will look at.
- Missing the renewal. When the period ends, a fresh agreement must be registered. Letting the occupant continue on the expired document blurs the licence and invites argument about the occupant's status.
- No police intimation. Mumbai and other police commissionerates expect the licensee's details to be submitted. See our tenant police verification guide.
Clauses every leave and licence agreement should have
- Recital that the arrangement is a licence and no tenancy or interest is created.
- Licence period, with start and end dates.
- Monthly licence fee, due date, mode of payment and escalation on renewal.
- Refundable deposit, refund timeline and permitted deductions.
- Lock-in for both parties and notice period after it.
- Who pays maintenance, property tax, utilities and society charges.
- Use restriction (residential only, number of occupants).
- No subletting, assignment or parting with possession.
- Licensor's right of inspection with notice.
- Handover condition and consequences of overstaying (Section 24 damages).
- Police intimation of the licensee's details.
Renewing a leave and licence agreement
A leave and licence agreement doesn't renew itself. When the period ends, the licence ends, even if the licensee keeps paying and the licensor keeps accepting. To continue lawfully:
- Execute a fresh agreement before the old one expires, with the new period, revised licence fee and any change in deposit.
- Pay fresh stamp duty on the new agreement using the same 0.25% formula.
- Register it again under Section 55. The online system makes this quick if both parties' Aadhaar details are current.
- Update police intimation if your commissionerate requires it on renewal.
If the licensor doesn't want to renew, a written reminder a month before expiry, followed by a notice on the expiry date, puts the Section 24 remedy in place cleanly. Contact Us!
Is leave and licence used outside Maharashtra?
You'll see the format in Goa, Gujarat and occasionally elsewhere, and the Easements Act applies across India. But outside Maharashtra the stamp duty, registration rules and remedies follow the general law for leases and your state's rent law. In most states, a standard 11-month rent agreement is the usual route. Law At Ease's online rent agreement generates the right format for your state.
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Frequently asked questions
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Is registration of a leave and licence agreement compulsory in Maharashtra?
Yes. Section 55 of the Maharashtra Rent Control Act, 1999 requires every leave and licence agreement to be in writing and registered, regardless of its term.
How is stamp duty on a leave and licence agreement calculated in Maharashtra?
At 0.25% of the total licence fee plus any non-refundable deposit plus a notional 10% annual interest on the refundable deposit. Confirm the figure on the IGR Maharashtra calculator.
What is the registration fee for a leave and licence agreement?
₹1,000 for property in a municipal corporation area and ₹500 in rural areas, plus a document handling charge.
Can I register a leave and licence agreement online?
Yes. Maharashtra's IGR runs online registration with Aadhaar biometric authentication, including Leave and Licence 2.0 for Mumbai City and Suburban.
What is the difference between leave and licence and a rent agreement?
A leave and licence gives only permission to occupy and creates no interest in the property. A lease or rent agreement transfers a right to enjoy the property and carries tenancy protection.
What happens if a licensee doesn't vacate after the agreement ends?
Under Section 24 of the Maharashtra Rent Control Act, the licensor is entitled to recover possession and the licensee must pay damages at double the licence fee for the overstay period.
Who is responsible for registering a leave and licence agreement?
The landlord (licensor). Section 55 places the responsibility on the landlord, and failure can lead to a fine or imprisonment.
What is the maximum period of a leave and licence agreement?
The online stamp duty formula commonly covers up to 60 months. Longer periods are possible but attract different duty treatment and should be drafted carefully.
Is a leave and licence agreement valid outside Maharashtra?
Yes, licences exist under the Easements Act across India, but stamp duty, registration and remedies outside Maharashtra follow general lease law and the state's own rent law.
This article is general information, not legal advice on your specific matter. For advice on your own facts, talk to an advocate on Law At Ease.
