The purpose of renting out space or property is to provide people who have traveled to a new city or location with a comfortable place to stay. A large number of people in metropolitan areas such as Mumbai, Bangalore, Hyderabad, and Delhi live in rental accommodation.
Only a few of these people, however, are aware of the differences between a rental agreement and a lease agreement? Do you know what I’m talking about? Does it make a difference if you know this? Let’s take a look:
What Is a Tenancy Agreement?
A tenancy agreement is a legal document that establishes the relationship between the landlord and the tenant. It establishes the terms and conditions of a rent or lease agreement between the tenant and the landlord. As a tenant, you will be allowed to occupy a property in accordance with the tenancy agreement’s rules.
Types of Tenancy Agreements and Their Implications
The name of the property owner, the renter, the term of the agreement, and the amount of rent to be paid during the term of occupation are all included in a rental agreement. The following are the different types of tenancy agreements in India.
- Rent Agreement.
- Lease Agreement.
- Leave and License Agreement.
A lease agreement is an agreement that gives a tenant the right to live in a home for a specified period of time (often for 12 months). The length of the lease depends on the tenant’s preferences and the owner’s wishes. A lease typically binds the tenant and landlord for a longer period.
A rent agreement is a legal contract between a landlord and a tenant. The agreement includes information such as the parties’ names, the property description, the rent amount, the security deposit, late payment charges, the grace period, the amenities to be provided to the tenant, parking rights, property maintenance, and repairing responsibilities, among other things. In India, rent agreements are typically for 11 months or less. A rent agreement does not have to be registered.
Leave and License Agreement
The Indian Easement Act 1882 governs the Leave and License Agreement, which is distinct from lease and rent agreements. A Leave and License Agreement is a legal document that allows the license holder to use the Licensor’s property. However, the property is granted under the terms of a Leave and License agreement rather than a tenancy agreement, so the property right would be illegal without it. In contrast to a lease agreement, such an arrangement makes eviction of the occupier easier. These contracts always grant ‘permission’ to occupy a space, not rights. It does not create a traditional landlord-tenant relationship, and the property owner always has the upper hand when it comes to evicting the occupier at any time.
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