Leave and licence is not a lease
Summary
Leave-and-licence agreements are common in India. Unlike a lease, they transfer no interest in the property, which favours the owner. If you plan a factory or a large fit-out, a lease is safer.
What to check
- A lease transfers an interest to the tenant and survives a change of owner.
- A licence is only permission to use; it may not survive a sale of the building.
- A licence generally can't be assigned or sublet.
- In Maharashtra (Mumbai, Pune) licences must be registered whatever the term, and the owner must register it; a licence over five years is stamped as a lease.
- If you invest heavily in fit-out, write in the term, protection on sale and access rights for staff and visitors.