Leave & License in Mumbai

Leave & License Agreement in Maharashtra

The Leave & License model is the preferred arrangement for short-term residential tenancies in Maharashtra, particularly in Mumbai and Pune. Unlike a traditional rental agreement under the Transfer of Property Act, a Leave & License agreement grants temporary occupation rights without creating a formal landlord-tenant relationship, thereby avoiding the application of the restrictive Maharashtra Rent Control Act (MRCA).

Key Legal Points for Maharashtra Leave & License

• Non-Transferable Right: The licensee (tenant) cannot assign, sublet, or transfer the license without the licensor's (landlord's) written consent.
• Licensor Retains Ownership: The property remains fully under the licensor's control, distinguishing it from a lease.
• 11-Month Standard: Leave & License agreements are typically issued for 11 months, renewable by fresh agreements rather than continuous tenancies.
• Mandatory Registration: Under MRCA 1999, even Leave & License agreements must be registered within 2 months with the registration authority.
• Stamp Duty: Calculated as 0.25% of (total consideration + 10% deposit), with a minimum of ₹100.
• No Rent Control: The absence of MRCA applicability allows landlords to negotiate market rents and easier exit provisions.

Stamp Duty & Registration for Maharashtra

Leave & License agreements in Maharashtra must be stamped and registered. Stamp duty is 0.25% of (annual consideration + 10% of deposit), minimum ₹100. Registration with the Sub-Registrar is mandatory and must be completed within 2 months of execution. The registration fee is ₹1,000. Without registration, the agreement is not admissible as evidence in court.

Why Choose Leave & License Over Rental Agreement in Mumbai?

Leave & License provides landlords with greater flexibility and faster exit mechanisms compared to rental agreements under the MRCA. For tenants, it often allows easier break clauses and lower stamp duties. In Mumbai, where property markets are dynamic, Leave & License is the standard arrangement.

Creating Your Mumbai Leave & License Agreement

DraftKar's Leave & License template for Mumbai, Maharashtra walks you through:

• Identifying the licensor (owner) and licensee (occupant)
• Property details and extent of occupation (full house, floor, room)
• License consideration (rent), payment schedule, and escalation clauses
• Maintenance and utility charge responsibility
• Non-transferability and non-subletting clauses
• Termination conditions and notice periods
• Default and remedies clauses

Your completed agreement will be ready to execute on e-stamp paper and, if desired, register with the appropriate authority in Maharashtra.