Who can be a witness to the execution of Leave and License Agreement?

Any person who is legally capable of entering into a contract may act as a witness other that the parties to the agreement.

How many witness will be needed?

Total 2 witness. Both the witness should have Aadhaar and PAN number and should be available at the time of execution.

How can Leave and Licence Agreement be terminated?

The agreement should contain the provision of termination. Typically, the agreement may be terminated by

  • Mutual agreement between the parties or;
  • On breach or default by either party of the terms of the agreement or;
  • On expiration of the duration of such agreement.
What are the consequences of termination of Leave and License Agreement?

Other than what is agrees under the agreement, on the termination of the agreement, the licensee should vacate the property and the licensor should return the security deposit.

Can a clause on escalation of rent be included in a Leave and Licence Agreement?

A clause on escalation of license fee can be include in a Leave and License Agreement and it will not convert a license into lease.
However, in a State like Maharashtra if an automatic renewal clause is incorporated in the leave and license agreement which makes the Leave and License Agreement for a period of more than 5 years, then stamp duty will have to be paid as payable on lease agreement.

By when should we get our agreement registered?

As per section 23 of the Registration act, 1908, the document should be presented for registration with 4 months of date of execution.

What is Stamp Duty?

Stamp Duty is a kind of tax like Sales Tax or Income Tax i.e. an amount you have to pay to the Government when you enter into a particular transaction through an agreement. It is called "Stamp Duty" as the amount is to be paid executing a written document on stamp paper.

The stamp duty varies from State to State and is dependent upon the nature of agreement. It must be paid in full and on time to the Government. In case of delay in payment of stamp duty, penalties are imposed.

How is the stamp duty for Leave and License document is calculated?

The Indian Stamp Act, 1899 as applicable in the respective States or the Stamp Act enacted by the States lay down the guidelines and the method of calculation of the stamp duty.

What is the consequence of paying lesser stamp duty?

The sub-registrar can refuse the agreement if full stamp duty has not been paid. The authorities have the right to impound inadequately stamped documents and require the payment of the differential stamp duty together with any penalty, fine or interest. Inadequately stamped documents are also such inadmissible as evidence in Court for purpose of enforcement of such contracts.