Rent Agreement vs Lease Deed vs Leave & License: Which One Do You Need?

Three documents, one confusing overlap

"Rent agreement", "lease deed" and "Leave & License" all describe putting someone in your property in exchange for money — which is why they get used interchangeably in everyday speech. Legally they are not the same thing, and picking the wrong one (or the wrong terminology for your state) is a common reason an agreement gets questioned.

The single distinction that explains almost everything else is this: a lease creates an interest in the property in favour of the occupant, while a licence does not — it only grants permission to use the premises. Once you understand that split, the differences in duration, registration, and what happens when the property is sold all follow from it.

Lease deed — the document that creates an interest

A lease is defined in Section 105 of the Transfer of Property Act, 1882 as a transfer of the right to enjoy immovable property for a certain time in return for rent or other consideration. Because it transfers an interest in the property to the lessee, a lease is the heavier, more formal instrument — usually reserved for longer terms (multi-year residential or commercial tenancies).

Under Section 107 of the same Act, a lease from year to year, or for any term exceeding one year, can be made only by a registered instrument. So a lease deed is normally stamped at a higher rate and compulsorily registered. The trade-off for that cost is strength: an interest in property generally survives a sale of the building and is heritable, so the tenancy does not simply end because the owner changes or a party dies.

Leave & License — permission, without an interest

A licence is defined in Section 52 of the Indian Easements Act, 1882: a right to do something on another's immovable property that would otherwise be unlawful, where that right does not amount to an easement or an interest in the property. A Leave & License Agreement is built on this concept — the licensee is permitted to occupy the premises, but no tenancy interest is transferred.

This is the document type Maharashtra uses for residential lettings, under the Maharashtra Rent Control Act, 1999. Using "rent agreement" terminology there is a mismatch. Note one important exception to the registration shortcut: in Maharashtra every Leave & License agreement must be registered regardless of how short the term is (Section 55, Maharashtra Rent Control Act, 1999).

"Rent agreement" — the everyday term for a short tenancy

"Rent agreement" (or "rental agreement" / "tenancy agreement") is the common, non-technical name most people use for the short residential document — typically the familiar 11-month term. Legally it is usually a short lease, so the same Transfer of Property Act and Registration Act rules apply to it.

The reason it is kept to 11 months is procedural: under Section 17 of the Registration Act, 1908, a lease of 12 months or more generally must be registered. An 11-month term stays below that threshold, so it stays fully valid without compulsory registration — and can simply be renewed. (See our deep-dive on why agreements are 11 months and not 12.)

The differences side by side

Treat the following as the general position — the exact rules and terminology vary by state, so always confirm yours:

• Interest in property: a lease deed (and a short "rent agreement" that is in substance a lease) creates an interest; a Leave & License does not — it is only permission to occupy.
• Governing law: lease — Transfer of Property Act, 1882 (Sections 105 and 107); licence — Indian Easements Act, 1882 (Section 52); Maharashtra lettings — Maharashtra Rent Control Act, 1999.
• Typical duration: lease deeds for longer (often multi-year) terms; "rent agreements" and Leave & License agreements commonly 11 months.
• Registration: leases of 12 months or more generally must be registered (Section 17, Registration Act, 1908); 11-month documents usually need not be — except in Maharashtra, where Leave & License must always be registered, and Tamil Nadu, where the tenancy is registered with the Rent Authority.
• On sale or death: an interest created by a lease generally continues despite a sale of the property and is heritable; a bare licence is more easily brought to an end. (The precise outcome depends on the agreement's wording and the facts.)
• Stamp duty: a registered multi-year lease deed typically attracts higher stamp duty than a short 11-month rent agreement or Leave & License — see our guide to stamp duty by state for the rates.

So which one do you actually need?

For a standard residential let of around 11 months, a correctly stamped rent agreement (or, in Maharashtra, a registered Leave & License) is what most people use and is fully valid. A formal lease deed is more appropriate for longer or commercial tenancies where both sides want a registered, transferable, heritable interest — and are willing to pay the higher stamp duty and registration cost for it.

Two practical rules of thumb: match the document to your state's terminology and law (Maharashtra means Leave & License, not "rent agreement"), and remember that whatever you call it, a term of 12 months or more generally triggers compulsory registration. When in doubt, confirm the current rule on your state's official portal.

Sources

Transfer of Property Act, 1882 — Section 105 (definition of a lease) and Section 107 (leases exceeding one year to be made by a registered instrument). Official text: India Code (indiacode.nic.in).

Indian Easements Act, 1882 — Section 52 (definition of a licence; a licence does not create an interest in the property). Official text: India Code (indiacode.nic.in).

Registration Act, 1908 — Section 17 (compulsory registration of leases of 12 months or more).

Maharashtra Rent Control Act, 1999 — Section 55 (mandatory registration of Leave & License agreements). Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017, for registration of the tenancy with the Rent Authority.

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