If you`re a property owner looking to rent out your property, you may have heard of both Leave and License Agreement and Lease Agreement options. It`s important to understand the differences between the two so that you can choose the right option for your specific needs.
What is a Leave and License Agreement?
A Leave and License Agreement is a type of agreement between the property owner and the tenant where the owner grants the tenant temporary and limited access to the property for a specific purpose. The agreement is usually valid for a short period of time, typically up to 11 months, and can be renewed based on mutual agreement between the parties.
Under a Leave and License Agreement, the tenant is granted permission to use the property for a specific purpose, which could be anything from running a business to using it as a holiday home. The tenant has no right to possess the property, and cannot transfer the rights to any other person.
What is a Lease Agreement?
A Lease Agreement is a legal document that defines the terms and conditions of the rental agreement between the property owner and the tenant. A lease is usually valid for a period of one year or more, and the tenant has exclusive possession and full access to the property during this time.
Under a Lease Agreement, the tenant is granted the right to use and possess the property, and can even sublet the property to another person, subject to specific terms and conditions outlined in the agreement. The tenant is required to pay rent for the entire lease period, and any violation of the terms of the agreement can lead to eviction.
Difference between Leave and License Agreement and Lease Agreement
The main difference between a Leave and License Agreement and a Lease Agreement is the nature of the agreement. A Leave and License Agreement is temporary, while a Lease Agreement is more permanent and long-term. A Leave and License Agreement is also often used for specific purposes, while a Lease Agreement is generally used for residential or commercial purposes.
Another major difference between the two is the right of the tenant. Under a Leave and License Agreement, the tenant does not have any right to possess the property, whereas under a Lease Agreement, the tenant has exclusive possession and use of the property.
Additionally, the termination process for a Leave and License Agreement is easier as compared to a Lease Agreement. The owner can simply terminate the agreement after the agreed-upon period is over, whereas, under a Lease Agreement, the owner must follow specific legal procedures to terminate the agreement.
Whether you choose a Leave and License Agreement or a Lease Agreement depends on your specific needs and requirements. If you`re looking for a short-term rental for a specific purpose, a Leave and License Agreement would be a better option. However, if you`re looking for a long-term rental and want to give your tenant exclusive possession and use of the property, then a Lease Agreement would be the way to go. Always consult legal experts to ensure that your agreement is legally binding and covers all the necessary terms and conditions.