As a homeowner or a tenant, you may have come across the term “leave and license agreement” in the course of renting a property. A leave and license agreement is a legal document that formalizes the terms and conditions of a rental agreement between a landlord and a tenant. It lays down the rental amount, the duration of the lease, and the rights and responsibilities of both parties during the tenancy period.
However, one question that often crops up is whether registration of this agreement is compulsory. The answer is no, it is not mandatory to register a leave and license agreement.
According to the provisions of the Indian Registration Act, 1908, registration of a leave and license agreement is not mandatory. It is an optional step that either party may undertake if they so choose. If the agreement is not registered, it is still legally binding, and any breach of the terms and conditions can be challenged in a court of law.
However, it is important to note that registering the leave and license agreement has its advantages. One of the main benefits is that it serves as proof that the agreement was executed between the two parties. If a dispute arises between the landlord and the tenant, the registered agreement can be produced in court as evidence.
In addition to providing proof of the agreement, registration also helps in the payment of stamp duty and registration fees. The stamp duty and registration fees for a leave and license agreement vary from state to state, and it is the responsibility of the parties to pay them. If the agreement is not registered, the stamp duty and registration fees are not applicable. However, if the agreement is registered, the parties can pay the required fees and obtain a receipt as proof of payment.
Another advantage of registering the leave and license agreement is that it gives the tenant the right to claim compensation in case of wrongful eviction. If the landlord tries to evict the tenant without following the due process laid down in the agreement, the tenant can produce the registered agreement in court as evidence and claim compensation.
In conclusion, while it is not compulsory to register a leave and license agreement, doing so has its advantages. It serves as proof of the agreement, helps in the payment of stamp duty and registration fees, and gives the tenant the right to claim compensation in case of wrongful eviction. Therefore, it is advisable to register the agreement to avoid any legal complications in the future.
