Legal & Documentation
Registered Lease Deed vs. Leave & License Agreement in Maharashtra Explained
Key legal, stamp duty, and registration differences between Leave & License (up to 60 months) and Long-Term Lease Deeds in Mumbai & Pune.
By VantageProp Research Desk · · 1 min read
Quick answer
- Leave & License Agreements in Maharashtra are commonly executed for up to 5 years (60 months) with lower stamp duty (0.25% of total consideration).
- Long-term corporate, bank, and industrial tenancies (9 to 15+ years) are often executed via Registered Lease Deeds or successive 60-month Leave & License terms.
- When buying a pre-leased property, always execute a Tripartite Attornment Agreement or Deed of Assignment with the tenant.
Why Maharashtra Uses Leave & License for 5-Year Terms
Under Section 55 of the Maharashtra Rent Control Act, 1999, every Leave & License agreement must be in writing and mandatorily registered. Because Maharashtra levies a concessional Stamp Duty of 0.25% on Leave & License agreements (up to 60 months) compared to higher slab rates on long-term Lease Deeds, many Grade-A IT and corporate offices structure a 5-year (60-month) registered Leave & License with a 3 to 5-year lock-in.
What Happens When a Pre-Leased Property is Sold?
When ownership transfers from Seller to Buyer, the tenant does not need to vacate or renegotiate commercial terms. Instead, a Tripartite Letter of Attornment (or fresh addendum) is executed where:
- The Seller transfers the Interest-Free Security Deposit (IFSD) to the Buyer (or adjusts it in the sale consideration).
- The Tenant acknowledges the Buyer as the new legal owner/licensor.
- The Tenant updates their finance system to credit monthly rent (after deducting 10% TDS u/s 194-I) directly into the Buyer’s bank account.
Frequently asked questions
What is the difference between a lease deed and a leave and license agreement in Maharashtra?
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A leave and license agreement is commonly used for terms up to 60 months with concessional stamp duty of 0.25%. Longer corporate, bank and industrial tenancies of 9 to 15+ years often use a registered lease deed or successive 60-month licenses.
Is registration of a leave and license agreement mandatory in Maharashtra?
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Yes. Under Section 55 of the Maharashtra Rent Control Act, 1999, every leave and license agreement must be in writing and registered.
What happens to the tenant when a pre-leased property is sold?
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The tenant stays on the same terms. A tripartite attornment letter is signed, the security deposit moves to the buyer, and the tenant starts paying rent (after 10% TDS under Section 194-I) to the buyer.