Lease of Immovable Property

Introduction

A lease is a common way of transferring limited rights in immovable property. It allows one person to use and enjoy property owned by another for a certain time. The law clearly defines the nature and requirements of a valid lease.

Meaning / Definition

Under Section 105 of the Transfer of Property Act, a lease is a transfer of the right to enjoy immovable property for a certain time.

This transfer is made in return for consideration (payment), which may be:

• Money (rent)
• Share of crops
• Services or any other thing of value

The person who gives the lease is called the lessor, and the person who takes it is called the lessee.

Modes or Types

Based on Duration and Form

Lease for one year or more

• Must be in writing
• Must be registered

Lease for less than one year

• Can be oral or written
• Registration is optional

Delivery of Possession

In all cases, delivery of possession (handing over control of property) is necessary.

Distinction / Comparison

Lease vs Licence

Nature of Right

• Lease: Creates an interest (legal right) in the property
• Licence: Does not create any interest

Possession

• Lease: Lessee gets exclusive possession
• Licence: Licensee does not get exclusive possession

Transferability

• Lease: Can be transferred (assignable)
• Licence: Cannot be transferred

Revocability

• Lease: Cannot be easily cancelled
• Licence: Can be cancelled (revocable)

Legal Action

• Lease: Lessee can sue for trespass (illegal entry)
• Licence: Licensee cannot sue in his own name

Registration

• Lease: Registration required if one year or more
• Licence: Registration not required

Practical Example

A gives his house to B for 2 years for monthly rent.

• This is a lease because B gets exclusive possession and legal rights
• The agreement must be written and registered

If A only allows B to use the house occasionally without exclusive control, it is a licence.

Summary

• Lease is transfer of right to enjoy immovable property
• Governed by Section 105 of the Transfer of Property Act
• Consideration may be rent, crops, or services
• Lease for one year or more must be registered
• Delivery of possession is necessary
• Lease creates legal interest, licence does not
• Lease gives stronger rights compared to licence