Almost every residential rental in Mumbai is documented as a leave and licence rather than a lease. The distinction is not cosmetic: it decides what rights the occupant acquires, and getting it wrong is how an owner ends up unable to recover their own flat.
Licence, not tenancy
A lease transfers an interest in the property to the tenant. A licence grants permission to occupy without transferring any interest, and the occupant is a licensee rather than a tenant. Under the Maharashtra Rent Control Act, 1999, a licensee does not acquire the protections a statutory tenant enjoys, which is precisely why owners insist on this form.
The eleven-month term everyone quotes is convention rather than law. It persists because it keeps the arrangement clearly short-term and renewable, and because it avoids any argument about a longer period implying a lease.
Registration is mandatory
Section 55 of the Act requires a leave and licence agreement to be registered, and places the responsibility on the landlord. This is widely ignored on the assumption that an eleven-month document does not need registering — that assumption is wrong in Maharashtra.
An unregistered agreement is weak evidence in a dispute. If the occupant stops paying or refuses to vacate, the owner is arguing from a document a court may decline to rely on. Registration is cheap relative to that risk.
Stamp duty and registration fee
Stamp duty on a leave and licence in Maharashtra is calculated at 0.25 per cent of the total consideration for the licence period. Consideration is not simply the rent — the computation brings in the non-refundable deposit and an element of the refundable deposit as well, which is why two agreements at the same rent can attract different duty.
The registration fee is a flat figure, differing between urban and rural areas, and is modest either way.
Registering online
Maharashtra allows e-registration of leave and licence agreements without either party attending the sub-registrar, using Aadhaar-based biometric verification. In practice most brokers use a service provider who handles the upload and the biometrics at the property. It is quick, and it removes the usual excuse for skipping registration entirely.
What to get right in the document
- The exact licence period, with start and end dates rather than a duration.
- Rent, the escalation on renewal if any, and the day of the month it falls due.
- The refundable deposit, and the timeline for returning it after the occupant vacates.
- Who pays society maintenance, property tax and the utility bills.
- A lock-in period, if the parties want one, stated for both sides.
- The notice period for termination, again for both sides.
- An inventory of what is provided in a furnished flat — this is where deposit disputes start.
Society formalities
Most co-operative housing societies require intimation of a new occupant and often a nominal non-occupancy charge levied on the owner. Some insist on police verification of the occupant. None of this is the broker’s legal responsibility, but the deal that stalls a week before move-in is usually stuck on a society formality nobody started early enough.