Rent agreement or leave and licence — which one?
A lease transfers an interest in the property to the tenant for the term. A leave and licence only gives the licensee permission to use the premises and creates no interest in the property; it is widely used in Maharashtra and by owners elsewhere who want a clear exit. For a broker, the clause list below is the same either way; the wording of the grant clause and the parties (“lessor/lessee” vs “licensor/licensee”) changes.
Clause-by-clause outline with sample wording
The wording below is a sample to show what each clause does. It is not a ready-to-sign document; adapt it to your state’s format and have it reviewed.
| Clause | What it covers | Sample wording |
|---|---|---|
| Parties | Full names, ages, addresses, PAN or ID of owner and tenant | “This agreement is made at Pune on [date] between [owner], hereinafter the Owner, and [tenant], hereinafter the Tenant.” |
| Property | Flat number, building, address, carpet area, fittings | “Flat No. [x], [building], [address], admeasuring [x] sq ft carpet, with fittings listed in Annexure A.” |
| Term | Start date, end date, renewal option | “For a period of 11 months from [start date] to [end date], renewable by mutual written consent.” |
| Rent | Amount, due date, mode, late fee if any | “₹[amount] per month, payable on or before the [5th] of each month by bank transfer or UPI.” |
| Escalation | Increase on renewal | “On renewal, the rent shall increase by [x] % unless agreed otherwise in writing.” |
| Security deposit | Amount, refund timing, deductions | “A refundable, interest-free deposit of ₹[amount], returned within [x] days of vacating, less unpaid dues and repair costs beyond normal wear.” |
| Lock-in | Period neither side can end the agreement | “Neither party may terminate during the first [x] months, except for breach.” |
| Notice | Notice period after lock-in | “After the lock-in, either party may terminate with [one] month’s written notice.” |
| Maintenance and bills | Society charges, electricity, water, gas | “Electricity, water and gas bills are payable by the Tenant; society maintenance by the [Owner/Tenant].” |
| Use | Residential use only, no sub-letting | “The premises shall be used only for residence of the Tenant’s family and shall not be sub-let.” |
| Repairs | Minor vs structural | “Minor repairs are the Tenant’s responsibility; structural repairs the Owner’s.” |
| Inspection | Owner’s right to visit | “The Owner may inspect the premises with [24] hours’ notice.” |
| Handover | Condition on exit, inventory | “The Tenant shall return the premises in the condition received, subject to normal wear and tear.” |
Why are rent agreements usually 11 months?
Section 17 of the Registration Act, 1908 makes registration compulsory for leases of immovable property from year to year, for any term exceeding one year, or reserving a yearly rent (Section 17(1)(d)). An 11-month agreement stays under that threshold, so in many states the parties sign it on stamp paper and skip the registration office.
That is not true everywhere. Some states require every leave and licence or rent agreement to be registered whatever its length, and a registered agreement is easier to rely on in a dispute. Ask your state’s registration department, or check its website, before assuming an 11-month agreement can stay unregistered.
Stamp duty, e-stamping and registration
Every rent agreement must carry stamp duty at the rate the state’s Stamp Act sets — often calculated on the rent, deposit and term. Many states offer e-stamping, where the e-Stamp certificate replaces physical stamp paper. Registration charges are separate.
We do not quote rates here because they differ by state and change. Check your state’s registration and stamps department for the current Stamp duty and Registration charges, and whether online registration is available.
Police verification of the tenant
Many city police departments require or strongly advise Tenant police verification before a tenant moves in. Most have an online form on the state police citizen portal. The owner usually submits it with the tenant’s ID and photographs; keep the acknowledgement with the agreement.
Deposit, notice and renewal — where disputes start
Most rent disputes are about the Security deposit and the exit. Write down the refund timeline, the deductions allowed, the Lock-in period and the notice period in numbers, not “as per norms”. Sign an inventory of fittings with photos at handover and again at exit.
Renewal is the other gap. Set a reminder well before the end date so the owner and tenant can agree the new rent and sign before the term lapses.
How brokers handle agreements in PropZolo
In PropZolo Rentals, an accepted offer turns into a draft agreement from state templates and a clause library, signed online with Aadhaar e-sign and e-stamp. Police verification, KYC, deposits and inspections sit on the same rental, and renewal reminders go out at 60, 45 and 30 days. Ready-to-use rent-due and agreement-renewal messages are in our templates library.
Questions
Is an 11-month rent agreement legally valid?
Yes, if it is properly stamped and signed. The 11-month term keeps it under the one-year threshold for compulsory registration in the Registration Act, 1908, but some states require registration of all rent or leave and licence agreements. Check your state registration department’s rules.
Who pays stamp duty on a rent agreement?
The law fixes the duty, not who pays it. Owners and tenants agree between themselves, and splitting it equally is common. Write the arrangement into the agreement so there is no argument later. The rate depends on your state’s Stamp Act.
Can I make a rent agreement online?
Many states offer e-stamping, and some offer online registration of leave and licence agreements. An agreement can also be signed with Aadhaar-based e-sign, so the parties need not meet in person. Whether online registration is available depends on your state’s registration department.
How much security deposit can an owner ask for?
It depends on the state’s tenancy law and on local practice. Some states have adopted laws that cap residential deposits, others have not. Check the law in force in your state and record the amount, refund timeline and deductions clearly in the agreement.
Is police verification of a tenant mandatory?
Many city police departments require it, and owners can face action for not verifying tenants where an order is in force. Even where it is not mandatory, it is a sensible step. Use the state police citizen portal and keep the acknowledgement on file.
Sources
- India Code — search “Registration Act, 1908” (Section 17), accessed 12 October 2026
- India Code — search “Indian Stamp Act, 1899”, accessed 12 October 2026
General information and sample wording, not legal advice. Stamp duty, registration and tenancy law differ by state and change; check your state’s registration department and have a lawyer review the agreement before signing.