Most people sign a Leave and License agreement without reading it properly. The language is formal and legal — but the clauses have real consequences for both landlord and tenant. This guide breaks down all 13 clauses of a standard Maharashtra Leave and License agreement in plain English, so you know exactly what you're agreeing to before you sign.
📋 All 13 Clauses at a Glance
1. Period & No Tenancy Rights
2. License Fee & Deposit
3. Payment of Deposit
4. Maintenance Charges
5. Electricity Charges
6. Use of Premises
7. Alteration
8. No Tenancy (Critical)
9. Inspection Rights
10. Lock-in Period (Optional)
11. Cancellation & Notice
12. Possession on Expiry
13. Registration
The 13 Clauses Explained
1
Critical
Period
Duration of agreement and tenancy rights
"The Licensor hereby grants to the Licensee a revocable leave and license, to occupy the Licensed Premises without creating any tenancy rights or any other rights, title and interest in favour of the Licensee for a period of 11 Months."
This clause sets the duration of the agreement and — critically — explicitly states that no tenancy rights are created. This is the foundation of a Leave and License agreement. The word "revocable" means the licensor can cancel the permission if the tenant violates any terms.
🏠 Landlord
You retain full ownership rights. Tenant gets no legal interest in the property. After expiry, you have the right to ask them to leave without complex legal proceedings.
🧑 Tenant
You have the right to use the property for the agreed period only. After the period ends, you must vacate. You cannot claim any rights beyond what is granted in this agreement.
2
Critical
License Fee & Deposit
Monthly rent amount and security deposit
"The Licensee shall pay to the Licensor License fee at the rate of Rs. [amount] per month and Rs. [amount] interest free refundable deposit. The monthly compensation shall be payable within first five days of the concerned month."
This clause records the exact monthly rent (called "license fee" or "compensation") and the security deposit amount. The deposit is explicitly noted as "interest free refundable" — meaning the landlord holds it without paying interest and returns it at the end of the agreement. Payment is due within the first 5 days of each month.
🏠 Landlord
Rent amount is legally fixed and recorded. You can pursue recovery if tenant delays beyond the 5th of the month. The deposit protects against damages.
🧑 Tenant
Your deposit is refundable and interest-free. Pay rent by the 5th to avoid any default clause triggering. Late payment is grounds for cancellation.
3
Important
Payment of Deposit
How deposit was paid and proof of payment
"The Licensee have paid the above mentioned deposit by Transaction Reference No. [XXXX], dated [date], drawn on the Licensee's Banking Account with [Bank name]."
This clause records the transaction reference number of how the deposit was paid — bank transfer, UPI, or cheque. This is important proof of payment for both parties. If the landlord later claims the deposit was never received, this clause protects the tenant.
🏠 Landlord
Confirms deposit receipt on record. Keep the bank statement matching this transaction reference as additional proof.
🧑 Tenant
Strong proof that deposit was paid. The registered agreement itself serves as a receipt. Always pay deposit via bank transfer — never cash — so there is a traceable record.
4
Standard
Maintenance Charges
Who pays society and property charges
"All outgoings including all rates, taxes, levies, assessment, maintenance charges, non occupancy charges, etc. in respect of the said premises shall be paid by the Licensor."
There are two standard options for maintenance charges in Maharashtra — either can be selected based on what landlord and tenant agree upon:
Option A — Landlord pays all outgoings (most common)
"All outgoings including all rates, taxes, levies, assessment, maintenance charges, non occupancy charges, etc. in respect of the said premises shall be paid by the Licensor."
Landlord pays everything — society maintenance, property tax, BMC levies, non-occupancy charges. Tenant pays only electricity.
Option B — Tenant pays maintenance, landlord pays other charges
"The Licensee shall bear and pay all the maintenance charges in respect of the said Licensed Premises, and other outgoings including all rates, taxes, levies, assessment, non occupancy charges, etc. shall be paid by the Licensor."
Tenant pays monthly society maintenance. Landlord still pays property tax, BMC levies, and non-occupancy charges.
🏠 Landlord
Agree on which option applies before signing. Option B reduces your monthly outgoing if tenant pays maintenance. Always specify which option is chosen in the agreement.
🧑 Tenant
Read this clause carefully — maintenance can be ₹2,000–₹10,000/month depending on the building. Under Option B you pay this in addition to rent. Factor it into your total monthly cost.
5
Standard
Electricity Charges
Who pays electricity bills
"The licensee shall pay the electricity bills directly for energy consumed on the licensed premises and should submit original receipts to Licensor indicating that the electricity bills are paid."
The tenant pays all electricity bills based on actual consumption. The tenant must also submit receipts to the landlord as proof of payment. This prevents situations where unpaid electricity bills accumulate against the meter in the landlord's name.
🏠 Landlord
Ask for electricity receipts periodically — this clause gives you the right to request them. Unpaid bills on your meter can affect your credit or result in disconnection.
🧑 Tenant
Pay bills on time and keep receipts. Share receipts with landlord as required. Failure to pay electricity bills is a breach of the agreement.
6
Important
Use of Premises
Purpose and condition of property use
"The Licensed premises shall only be used by the Licensee for Residential purpose. The Licensee shall maintain the said premises in its existing condition and damage, if any, caused to the said premises, the same shall be repaired by the Licensee at its own cost subject to normal wear and tear."
The property can only be used for the stated purpose (residential or commercial as agreed). The tenant must maintain the property in the same condition and is responsible for any damage beyond normal wear and tear. Running a business from a residential premises without permission violates this clause.
🏠 Landlord
You can take action if tenant uses property for any other purpose. Damage caused by tenant can be recovered from the security deposit or through legal action.
🧑 Tenant
Use the property only for its stated purpose. Document the condition of the property with photos when you move in — this protects you against false damage claims when you leave.
7
Standard
Alteration
No structural or interior changes without permission
"The Licensee shall not make or permit to do any alteration or addition to the construction or arrangements (internal or external) to the Licensed premises without previous consent in writing from the Licensor."
The tenant cannot make any changes to the property — drilling walls, removing fixtures, repainting, adding partitions, or any other modification — without the landlord's written permission. Verbal permission is not sufficient — it must be in writing.
🏠 Landlord
Any unauthorized alterations are a breach. You can ask the tenant to restore the property to its original condition at their cost.
🧑 Tenant
Get written permission (WhatsApp message works) before making any changes. Even small changes like putting up wall shelves technically require consent under this clause.
8
Most Critical
No Tenancy
The most important landlord protection clause
"The Licensee shall not claim any tenancy right and shall not have any right to transfer, assign, and sublet or grant any license or sub-license in respect of the Licensed Premises or any part thereof and also shall not mortgage or raise any loan against the said premises."
This is the single most important clause in the entire agreement — and the reason why Leave and License is preferred over a Rental Agreement in Maharashtra. It explicitly prohibits the tenant from claiming tenancy rights, subletting to others, assigning the license to someone else, or using the property as collateral for a loan.
🏠 Landlord
This clause is your primary legal protection. Without it — or without a registered agreement — a long-term tenant could claim tenancy rights and become extremely difficult to evict. Never skip registration.
🧑 Tenant
You cannot sublet even one room to someone else. You cannot allow another person to occupy the premises on your behalf. Violation of this clause is grounds for immediate cancellation.
9
Standard
Inspection
Landlord's right to visit and inspect
"The Licensor shall on reasonable notice given to the Licensee shall have a right of access either by himself or through authorized representative to enter, view and inspect the Licensed premises at reasonable intervals."
The landlord has the right to visit and inspect the property but must give reasonable advance notice. The landlord cannot enter unannounced — "reasonable notice" typically means 24–48 hours prior notice. The inspection must also happen at reasonable intervals — not daily or weekly without cause.
🏠 Landlord
You can send a representative (family member, agent) instead of coming yourself. Give 24–48 hours notice before visiting. Surprise visits without notice are not protected under this clause.
🧑 Tenant
You cannot deny a landlord's reasonable inspection request. However, you are within your rights to refuse unannounced visits or visits at odd hours.
10
Optional
Lock-in Period
Added when both parties agree to a minimum commitment period
"Both the parties have agreed to set a lock-in period of [X] months during which neither the Licensor shall ask the licensee to vacate the premises, nor the licensee shall vacate the premises on his own. If the licensee leaves during the lock-in period for any reason, he shall pay license fee for the remaining lock-in period. The Licensor shall compensate the Licensee if asked to vacate during the lock-in period."
This clause is optional — it is added only when both parties mutually agree to a lock-in period. During the lock-in period, neither party can exit the agreement. If the tenant vacates during lock-in, they must pay rent for the remaining lock-in months. If the landlord asks the tenant to vacate during lock-in, the landlord must compensate the tenant for the inconvenience. A common lock-in period in Maharashtra is 6 months for an 11-month agreement.
🏠 Landlord
Lock-in gives you rent stability — tenant cannot leave suddenly in the first few months. However it also means you cannot ask the tenant to vacate during this period without paying compensation.
🧑 Tenant
Before agreeing to a lock-in, be sure of your plans for that period. If your job requires relocation or circumstances change, you will still owe rent for the remaining lock-in months if you leave early.
11
Critical
Cancellation
How and when the agreement can be terminated early
"On the expiration or termination of this agreement the Licensee shall vacate the said premises without delay. In the event of the Licensee failing to remove himself, the Licensor shall be entitled to recover damages at the rate of double the daily amount of compensation per day and/or remove the Licensee and his belongings from the Licensed premises, without recourse to the Court of Law."
On the last day of the agreement, the tenant must vacate immediately. If they don't, the landlord can charge double the daily rent for every day of overstay. This clause also gives the landlord the extraordinary right to remove the tenant and their belongings without needing to go to court — a powerful protection under Leave and License law.
🏠 Landlord
Double rent penalty + right to remove tenant without court order. This is why a registered L&L agreement is so powerful for landlords. Without registration, this clause has no legal backing.
🧑 Tenant
Plan your move well before the expiry date. Start looking for new accommodation 2 months before expiry. Overstaying is expensive — double rent per day adds up fast.
12
Critical
Possession
What happens when the agreement expires
"On the expiration or termination of this agreement the Licensee shall vacate the said premises without delay. In the event of the Licensee failing to remove himself, the Licensor shall be entitled to recover damages at the rate of double the daily amount of compensation per day and/or remove the Licensee and his belongings from the Licensed premises, without recourse to the Court of Law."
On the last day of the agreement, the tenant must vacate immediately. If they don't, the landlord can charge double the daily rent for every day of overstay. This clause also gives the landlord the extraordinary right to remove the tenant and their belongings without needing to go to court — a powerful protection under Leave and License law.
🏠 Landlord
Double rent penalty + right to remove tenant without court order. This is why a registered L&L agreement is so powerful for landlords. Without registration, this clause has no legal backing.
🧑 Tenant
Plan your move well before the expiry date. Start looking for new accommodation 2 months before expiry. Overstaying is expensive — double rent per day adds up fast.
13
Standard
Registration
Who pays stamp duty and registration charges
"This Agreement is to be registered and the expenditure of Stamp duty and registration fees and incidental charges, if any, shall be borne by the Licensee and Licensor equally."
This clause confirms that the agreement must be registered and that stamp duty and registration costs are shared equally between landlord and tenant. However, this is negotiable — in practice, many landlords and tenants agree to split differently or one party pays entirely. Whatever is agreed should be reflected here.
🏠 Landlord
Registration is mandatory — this clause just confirms who pays. Typically split 50/50 but can be negotiated. Registration protects you more than the tenant, so many landlords bear the full cost.
🧑 Tenant
Negotiate the split before signing. If landlord insists you pay fully, factor propdeed's ₹899 service fee + govt. charges into your move-in costs.
⚠️ Most Important Thing to Remember
All these clauses are only legally enforceable if the agreement is registered. An unregistered or notarized agreement cannot be used as evidence in court — meaning none of these protections apply. Registration is what makes the agreement legally valid.
📌 Read Before You Sign — Checklist
- Confirm the exact rent amount, deposit, and payment date in Clause 2
- Check if there is a lock-in period (mentioned in Clause 10 if applicable)
- Understand the sale clause in Clause 12 — you may have to vacate mid-agreement
- Document property condition with photos before moving in
- Always pay deposit via bank transfer — transaction reference goes into Clause 3
- Never sublet or allow others to occupy — Clause 8 violation is grounds for immediate cancellation
Get Your Agreement Drafted & Registered
propdeed drafts your Leave and License agreement with all standard clauses and registers it with the Maharashtra government. Doorstep biometric, stamp duty, SRO filing — all handled.
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Frequently Asked Questions
What are the important clauses in a Leave and License agreement?
The standard clauses are: Period (no tenancy rights), License Fee & Deposit, Payment of Deposit, Maintenance Charges, Electricity Charges, Use of Premises, Alteration, No Tenancy, Inspection, Lock-in Period (optional), Cancellation, Possession on Expiry, and Registration. The most critical are the No Tenancy clause and the Possession clause.
What is the No Tenancy clause in Leave and License?
The No Tenancy clause explicitly states that the tenant acquires no tenancy rights, cannot sublet the property, cannot transfer or assign the license, and cannot use the property as loan collateral. It is the most important protection for the landlord and the reason why L&L is preferred over a Rental Agreement in Maharashtra.
What is the notice period for cancellation in Leave and License?
Either party can terminate the agreement by giving one month's written notice. The landlord can cancel if the tenant defaults on rent or breaches any terms. The tenant can also vacate early with one month's notice, unless a lock-in period applies.
What happens if tenant doesn't vacate after the agreement expires?
The landlord can charge double the daily rent for every day of overstay (Clause 12 — Possession). The landlord also has the right to remove the tenant and their belongings without going to court — a unique and powerful protection under Leave and License law.
Who pays maintenance charges in Leave and License agreement?
There are two options. Under Option A (most common): the landlord pays all outgoings — society maintenance, property tax, BMC levies, and non-occupancy charges. Under Option B: the tenant pays monthly society maintenance charges, while the landlord pays property tax and other levies. The applicable option must be specified in the agreement.
What is the Lock-in Period clause in Leave and License agreement?
The Lock-in Period clause is optional — added only when both parties mutually agree. During the lock-in period, neither party can exit the agreement. If the tenant leaves during lock-in, they must pay rent for the remaining lock-in months. If the landlord asks the tenant to vacate during lock-in, the landlord must compensate the tenant. A common lock-in period in Maharashtra is 6 months for an 11-month agreement.