Whether it is a rental agreement or a property sale deed, we help our clients draft the same. We even provide our clients with the draft templates so that there is no confusion in the agreements and all the general clauses are in place.

Leave and License Agreement

A leave and license agreement is an agreement between an owner of a property and the licensee where in the licensee is allowed by the licensor to temporarily occupy a part or whole of his immovable property, as the requirement and arrangement may be, for a specific period of time. The licensee is allowed to carry on his business or use the property for residential purposes, as the case may be. The leave and license agreement is generally drafted for a period of 11 months and for this, the licensee shall pay a fixed amount of rent/license fee to the licensor. The financial terms usually include a 6-12months of security deposit and a monthly or quarterly amount in advance.

In case of commercial lease agreements, most of the commercial property owners prefer either LTD. Companies with 1 Crore Paid Up Capital or Foreign Entities with liaison offices or BPO’s set up in the same region. While the agreements generally are signed for tenure of 11 months, most of the owners prefer a contract for 3 years with renewable options thrown in coupled with either lock in periods or escalations. The Leave and License agreement has be to be mandatorily registered with the sub registrar of assurances at the place of jurisdiction were the property is situated.

Drafting a flawless agreement requires specific set of skill, knowledge and competence about all the legal aspects of the contract. This would ensure that there is no future complication for either of the parties. Many considerations need to be kept in mind while drafting a contract.

• Both the parties should be legally competent to enter the contract. Minors, insane, bankrupt, undischarged insolvents are incompetent to enter a valid contract.


• The agreement should mention proper identification of the parties to the contract.


• Proper identification, demarcation and area of the property to be rented out/leased needs to be mentioned.


• The title of the lessor should be clear that is the lessor would be the legal owner of the property or should be the person legally authorised by the lessor or authorised by the court to enter into the contract.


• The title of the lessor should be clear that is the lessor would be the legal owner of the property or should be the person legally authorised by the lessor or authorised by the court to enter into the contract.


• The tenure of the lease should be clearly mentioned in the contract and whether the provision of renewal is there or not. On the expiration of the term of the lease, the contract remains determined unless and until it is renewed further.


• Whether the property will be used for commercial, residential or other charitable purpose should be clearly mentioned in the agreement. If the property is used for any other purpose other than mentioned in the contract, the agreement turns void and can be cancelled as well as compensation seeked for.


• The amount of rent payable and the mode of payment shall be clearly mentioned in the contract. Usually, the rent is payable monthly unless mutually agreed otherwise.


• If the tenure of lease extends for more than a year and the rent payable is agreed to increase every subsequent year, it should be mentioned in the agreement.


• The contract must mention any advance rent payment or security deposit paid by the lessee, time and mode of refund or its adjustment.


• Other charges such as maintenance, electricity, security, gas, water etc. or any other facility, payable by the lessee should be specifically mentioned in the contract to avoid future confusions.


• The agreement must mention the access to other ancillary facility/spaces such as roof, park, common passage, garage, swimming pool, club etc. besides the demarcated property for use. The agreement should also mention any additional charges the lessee needs to be for the use of such facilities.


• In case of furnished flats, the agreement must mention the list of furniture/ gadgets/ appliances with their respective specifications. The percentage of compensation also needs to be mentioned if there is any loss or damage to the previously mentioned material.


• In cases of the property being leased out for a very long period, the onus of maintaining /repairing the property must be clearly mentioned.

Property Sale Agreement

Property Sale Agreement is the most important and the first document you need to scrutinize minutely after you have narrowed down upon your choice of home. Just the beginning of the next step of acquiring a new home, a Sale Agreement needs proper clauses and explicitly mentioned terms so that there is no conflict of interest in the future. Whether on is purchasing a site for construction of home or an apartment from a builder, a sales agreement is a technical document that will have a series of terms and conditions, that once signed, cannot be countered later.

Several inclusions called clauses feature in a sale agreement. The clauses describe the property, the buyer and seller details, the negotiated and final price and the mode of payment or its disbursement. There will also be the period for the payment, the provision for payment of stamp duty and for the transfer of property title. The clauses are the most important aspect of the agreement since they outline whether the transaction is a successful and legal one. The agreement will tell you whether the amount of money to be paid is to be made in full cash or in part or agreed to be paid partially in future as agreed upon. Some of the clauses will include municipal taxes, maintenance charges and the payment towards the building society, in case of an apartment being purchased in a society.

The ‘Property Sale Agreement’ comes under the purview of the Indian Contract Act 1872, the Registration Act 1908 and the Transfer of Property Act. Whoever enters in to a contract of buying or selling a property-whether commercial or residential, comes under the jurisdiction of these three acts. It is always imperative to enter into a contract through written agreement so that the property’s ownership is legally established. All the deeds that you receive need to be scrutinized and verified by established and experienced property lawyer.

The sales agreement should include the following terms:

• Payment Terms: Bot the buyer and the seller are responsible to mutually come to an agreed price of the property and all other expenses that will go towards transferring of the property. The amount of money and the time of disbursement as well as any instalment facility availed should be clearly mentioned in the contract. The document needs to be scrutinized by both the parties and their lawyers and later signed by both the buyer and the seller.


• Transfer of property title: The title of the property should be clearly mentioned in the contract. If one has planned to take loan to purchase the property, the individual will need the property title to be in his name before the loan is sanctioned. The seller should transfer the property title to the buyer once he gets the agreed amount in his hand. The property needs to be registered in the name of buyer by the seller at the local registrar office.


• Stamp Duty: The onus to ensure that the property is registered on his name lies with the buyer. The stamp duty rates are fixed by the relevant authorities and may vary from state to state. The buyer needs to pay the requisite stamp duty at the rate sanctioned the government for transferring the property.


• Sale Deed: This follows the Property Sale Agreement as an understanding between the buyer and the seller. The matter needs to be scrutinized by experts a many times before being finally signed upon.


• Indemnity Clause: This clause identifies the buyer against any legal dispute/defect in the property. It also mentions that the seller shall compensate the buyer for any loss suffered by the buyer at the dominant market rate. For example, the property prices rising suddenly specially in metros. The clause should be drafted carefully and with all possible scenarios included.


• Penalty Clause: Generally, buyers pay a token amount at the time of signing the Sale Agreement It needs to be clearly mentioned in the agreement, that if the buyer backs out of the deal, the seller has the right to forfeit the entire token amount. Another clause can also be included that in the case of seller backing out of the deal, the buyer should get back the entire token money along with the equivalent amount as penalty. If this is not done, the seller might keep looking for a buyer who would pay extra token money and may then suddenly call of the deal with the previous buyer.

With all these clauses and terms, buying a home or leasing out a property may seem to be a daunting task, but with proper legal guidance and support, there is no need to fear the complexities of the sale or lease agreement. HindustanProperty.com provides proper advice along with the entire knowledge of property sale and lease norms before any transaction is affected.