Consideration for the lease must be established, which may take the form of: (a) money; (b) a monetary value, for example. B a share of the harvest; (c) the services or other valuables to be provided to the transferee on a regular basis or on specific occasions by the transferee. The consideration can be described as rent plus a premium as well as rent alone or a premium alone. A rental agreement without consideration is also invalid. License A license is a right to do or continue to do anything in or on the grantor`s property that would be unlawful without such a right, and such right does not constitute an easement or interest in the property. In addition, it is an authority to do a certain action or set of actions on someone else`s land without owning a fortune there. Thus, the main difference between a lease and a license is that the lease is a transfer of a right in a particular property, whereas the license is a simple authorization and a licensee does not have the right to be terminated before proof. As a general rule, a rental agreement requires a written or verbal agreement between two parties, the landlord and the tenant. The lease gives the tenant the right to use the land or property at will in accordance with the terms of the contract. During my travels over the years, I have encountered cases where business people have confused the distinction between a lease and a permit. The distinction is important because the rights and obligations of the parties can vary greatly depending on how the true relationship is determined. If you can`t determine if your contract is a lease or a license, an experienced landlord-tenant lawyer may be able to help. A final consideration is that a party cannot convert a lease into a licence by simply calling it that; the terms of the agreement and the nature of the control are the most important determining factors.
There may be a gray area from time to time, but usually the division is easy to see if considered correctly. Legally, a lease gives you, the tenant, an interest in the property. However, a license only gives you permission to use the property, but no interest in it. Since a licensee has no interest in the property, the licensor may revoke the license at any time. However, leases give the tenant the right to certain terminations before the tenant`s right to the property can be terminated. Determining whether the person in possession is a tenant or a licensee is a statement of fact. To determine whether a document establishes a lease or a licence, the content of the document must be preferred to its form. If it creates an interest in the property, it is a lease; however, if it only allows another to use the property whose legitimate possession and control remains in the hands of the owner, it is a license. A license does not create a discount or interest in the property to which it relates. Whether an instrument acts as a financial lease or a licence is therefore not a question of the words contained in the instrument with which it was created, but of its content. The decisive consideration is the intention of the parties, but the intention must be derived from a true interpretation of the agreement and not just from the description of the parties. If the document is ambiguous in terms of intent, the issue is to decide in the context of the previous and resulting circumstances and the evidentiary evidence.
A document expressing the intention of both parties or one party to create a license nevertheless establishes a tenancy if the rights and obligations imposed and imposed comply with the legal requirements of the tenancy. The mere use of words appropriate to a lease does not preclude the licensee; so even a document that refers to «rent», maybe a license. The transfer of wholly ownership generally indicates the intention to establish a lease, although the amount is called a «royalty», but this is no longer a conclusive criterion, and there may be cases where the acquirer is a licensee in an indebted position. If the tenant is still in possession after the end of the initial rental period and the lessor accepts a premium from him for the following period, this is a lease and the tenant could not be excluded without the termination of the newly created lease. From the discussion above, it would not be difficult to understand the various points regarding rental and licensing. Ann now, it would not be very difficult to understand the difference between these two concepts. The lease is much more extensive than that of the license and gives the purchaser a high degree of rights that cannot be easily extinguished. A person entering into a deed of lease cannot unilaterally invalidate it, but in the case of a licensor, he or she could terminate the licence.
It would be easier to understand that if you have looked at some of the decisions and jurisprudence of the Supreme Court. The actual intention of the parties forms the basis for the interpretation of whether the contract concluded between the parties is a lease or not. This was confirmed by the Supreme Court in C.M. Beena v. P.N. Ramachandra Rao stated that «the difference between a lease and a license must be determined by the fact that the actual intent of the parties can be deciphered from a full reading of the document, if any, between the parties and the circumstances that accompany it.» And the court also concluded that the conduct of the parties before and after the relationship is established is important to know their intent. In Achintya Kumar Saha v. Nanee Printers, the Supreme Court took a similar view, where a question relating to rental and licensing issues was resolved by the court by referring to the intention of the parties and the court held that the intention of the parties entering into an agreement becomes the decisive factor in establishing the very nature of the agreement reached. In addition, the Court held that the circumstances surrounding the parties must also be taken into account in determining the actual intention of the parties. This view was also held by the Supreme Court in Rajbir Kaur v. S. Chokosiri and Co.
In Delta International Ltd v. Syam Sundar Ganeriwalla, there was a dispute between the parties as to whether the agreement between them was a lease or a «leave and licence». Nowhere did the document mention a provision that he could evade the provisions of the W.B. Premises Tenancy Act of 1956. The Supreme Court noted that «where it has not been alleged anywhere that the act performed between the parties was a cover-up to circumvent the stringency of the provisions of the Tenancies Act, nor has it been said that a dummy document was performed to achieve another purpose, the intention of the parties should be derived from the explicit words of various terms they indicated in the deed, be removed. The court ruled that this was a licensing agreement. In Vayallakath Muhammodkutty v. Illikkal Moosakutty, the court ruled that an embargo on subletting in the document alone does not make it a lease. The court held that a licence agreement does not generally raise a question of subletting. In addition, in Khalil Ahmed basher Ahmed v.
Tufelhussein Samasbhai Sarangpurwala, the Supreme Court held that if an interest is created in property that allows a purchaser to enjoy it without interference, the document must be interpreted as that of a lease. This point has been discussed earlier in this article, from which a tenant or the person who comes into possession of the rental property benefits exclusively, as opposed to a license agreement. That is, if an owner of a parcel of land grants permission to use the land without exclusivity, the document must be interpreted as that of a license. .