In Mumbai, residential premises are very often let on a leave and licence rather than a tenancy, usually for eleven months at a time. The label matters because it decides which rights the occupant has, and Maharashtra law asks that the arrangement be recorded properly.
Key facts
- Law
- Section 55, Maharashtra Rent Control Act, 1999: must be in writing and registered
- Stamp duty
- 0.25% of the total licence fee, plus any non-refundable deposit and 10% a year of the refundable deposit (Article 36A). Calculator
- Registration fee
- Rs 1,000 in a municipal corporation area; Rs 500 elsewhere
- If not registered
- The occupant’s version of the terms prevails; the landlord can be fined up to Rs 5,000 or jailed up to 3 months
Licence and lease are different things
Under the Indian Easements Act, 1882 a licence is a permission to do something on another’s property which would otherwise be unlawful, without creating an interest in the property. A lease under the Transfer of Property Act, 1882 transfers a right to enjoy the property. Courts look at the substance of the arrangement, and not only at the heading of the document, to decide which it is.
Writing and registration
The Maharashtra Rent Control Act, 1999 provides, in Section 55, that a licence agreement for premises is to be in writing and registered under the Registration Act, 1908. An unregistered agreement is difficult to rely on, and the stamp duty and registration fee are payable as the stamp law of the State provides. Registration is done at the Sub-Registrar’s office, with both parties and usually two witnesses present, or through the State’s online process.
What the agreement should record
- Names and addresses of the licensor and licensee, and a description of the premises.
- Period of the licence and any lock-in period.
- Licence fee, security deposit, and when and how each is paid or returned.
- Who bears maintenance, society charges and utilities.
- Conditions on use, and a prohibition or permission on sub-licensing.
- The manner of termination and notice, and the condition in which the premises are to be returned.
When the term ends
On expiry the licensee is to vacate. Where the licensee does not, the licensor generally proceeds through the competent court, and self-help such as cutting off water or electricity is best avoided because it can create liability for the licensor.
Police intimation
In Mumbai the police ask that particulars of the licensee be given to the local police station when premises are let. The practice and any online process should be checked at the time of letting.
Free download: Leave and licence agreement checklist (PDF) · all free formats
Free tool: Flat purchase cost calculator. If you are buying rather than renting.
This article is general legal information and is not advice on any particular matter. Facts differ, and the law and prescribed forms are amended from time to time, so documents and dates should be checked against the current provisions before any step is taken.
Related service: Property Matters in Mumbai