Rent Agreement vs Lease and License: Do not make a rent agreement for the tenant, get a lease and license..

Generally, there are two purposes for investing in property. First, you want to buy it for your use, and second, you buy the property at present and when you need money, sell it and earn profit or secure a fixed income every month by renting it out. Renting out properties is the best way to earn income, but sometimes some tenants also clash with the landlords, which becomes the cause of dispute. If the landlord does not live there, then there is a problem with ownership of the property. Today we will tell you the way to avoid this dispute.

A rent agreement is made in most cases to protect the interests of the landlords. However, despite this agreement, the interests of the landlord are not fully protected from the tenants on a large scale. In such a situation, to avoid any dispute, the owners have now started adopting the option of a 'lease and license' agreement. Lease and license are also very similar to rent or lease agreement or kiryanama, only some clauses written in it are changed. We know from property expert and CMD of Oram Developments Pradeep Mishra how a lease and license are made and what are its benefits.

Completely in the interest of the landlord
Whether it is a rent or lease agreement or lease and license, all these documents are made unilaterally to protect the interests of the landlord. In both documents, it is mentioned that the owner of the property is giving it to its tenant for residential or commercial use for a fixed period. This period can be from 11 months to a few years. It is also written in it that if the tenant is taking the property for residential use, then it cannot be used for commercial activities. Also, after the completion of the fixed period, if the agreement or lease and license are not extended, then in those circumstances the tenant will have to vacate the property.

What is the main difference between the two?
In the rent agreement, the landlord is called the 'lessor' and the tenant is called the 'lessee', while in the lease and license, 'licensor and licensee' is written. A rent agreement is usually made for 11 months for residential properties, while a lease agreement is used for a period of 12 or more months. Also, it is usually used to rent commercial properties. On the contrary, a lease and license can be made for a period of 10-15 days to 10 years. The special thing is that all these documents can be made on stamp paper through a notary. Apart from this, if the rental period is for 12 or more years, then it is also necessary to get it registered with the court.

Which document is better among the two?
A lease and license can be considered better than a rent or lease agreement because it can be made for a minimum period of 10 to 15 days as well as for a long period like 10 years. Along with this, it is mentioned that the licensee i.e. the tenant will not claim or demand his right on the property in any form. By doing this, the landlord retains the right to that property, even if it is in the possession of the tenant for some time.

Another good thing in this is that when two parties sign a rent or lease agreement with mutual consent and after the death of either of the parties, their successors can continue that agreement with mutual consent. This is not the case with lease and license. In the event of the death of either of the parties, it automatically becomes void i.e. null and void. Therefore, while giving your property on rent, you must get the lease or lease and license document prepared so that no one else can challenge the ownership rights on your property.

PC Social media