Frequently Asked Questions

          For Landlords

  • It is easier for the landlord to change the terms of a licence agreement, as compared to a lease agreement.
  • A lease gives to the tenant an exclusive interest in the property, whereas a licence does not.
  • A licence agreement is easy to terminate.
  • A licence cannot be assigned / transferred.


          For tenants

  • No requirement to provide long notices for vacating the premises in a licence agreement.
  • Rent agreements involving licences are for short periods, compared to leases.


In India, rent agreements in the residential segment are typically signed for a period of 11 months, to avoid the legal complexities involved in the signing of a lease. The main reason for this, is that rental agreements of a period less than a year do not require registration. A document that enables tenancy for a period of less months, does not require registration and attains the form a licence.
In the commercial segment, however, leases are a norm, since they span longer tenancy periods.

Also note that with states implementing the draft model tenancy law of the centre, all rent agreements in India will have to be made and executed in line with the provisions in the respective state-specific laws. The Uttar Pradesh government, in January 2021, for example, promulgated a tenancy ordinance, with an aim to safeguard the interests of landlords, as well as tenants. The law is likely to bring down tenant-landlord disputes, especially in high-intensity rental markets of Noida, Greater Noida and Ghaziabad, by clearly specifying the duties and responsibilities of the transacting parties.

Rent agreements for 11 months or more have to be compulsorily registered.

A lease creates in favour of the tenant an exclusive interest in the property, while a leave and licence agreement does not create any interest in the property towards the tenant.

A lease is a contract outlining the terms under which one party agrees to rent an asset—in this case, property—owned by another party. It guarantees the lessee, also known as the tenant, use of the property and guarantees the lessor, the property owner or landlord, regular payments for a specified period in exchange. Both the lessee and the lessor face consequences if they fail to uphold the terms of the contract.

Renting refers to the short-term arrangement of one party living in, or using, a piece of property owned by another party.

Rent itself refers to a regular payment made to a landlord by a tenant leasing some type of property, like a house or apartment.

When renting, the landlord has the right to change the terms of the rental agreement as they see fit. Additionally, a standard rental agreement is valid on a month-to-month basis.

A lease is a form outlining an agreement between a lessor and lessee that dictates how long an asset or property will be rented, as well as other housing-related stipulations.
As a rule of thumb, a lease agreement covers an extended period of time known as the “term”. With regard to real estate, the term of a lease typically lasts for one year.
A lease does not automatically extend past the end of the term, and a lease renewal will need to be drawn up in order to continue using the property.
Some lease agreements include a clause allowing the tenant to continue a month-to-month tenancy after the lease term ends.
Leases can be used to cover all sorts of property, such as:

  • Houses
  • Apartments
  • Land
  • Vehicles
  • Furniture
  • Commercial Real Estate

In real estate, a lease is the contractual agreement that defines the terms of the use of a property. This includes what is being rented, for how long, and other stipulations that both parties agree to (e.g., whether pets are allowed on the property).

Rent is the periodic payment made to the owner of a property (often called “landlord”) for the use of said property, which could be a building, residential space (house, apartment, etc.), commercial space (office, store, warehouse, etc.), or land. In other business cases, rent is the payment or series of payments made to the owner of a property for the use of that property, such as equipment, vehicles, industrial machinery, and so on.

In real estate, a lease is a contract for a specific period of time — often 6 or 12 months — after which the contract expires, while rent is the payment made under the terms of the lease. Real estate leases are also commonly known as “rental agreements.”

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