Many NRI's and PIO's purchase properties in India as an investment and perhaps with the goal of
probably returning to India at some point of time. Instead of keeping properties vacant, renting out is an option that some people consider.

Rents in the major cities have gone up in the last few years and it does make good economic sense to rent out vacant properties. However, many people shy away from renting as they have are worried about tenants may not vacate the premises.

While there are no full proof methods of protecting landlords in India from tenants who refuse to vacate their property after their rental agreements have expired, there are some steps landlords can take to protect themselves and their property.

Landlords, can protect themselves from undesirable tenants, to some extent by using a leave and license agreement when renting out their property. There are normally two types of agreements that are used when renting property.

•     Rental Lease Agreement
 
•     Leave and license agreement

While both these types of agreements appear to be similar with the purpose of renting property, there is a considerable difference when legal aspects are taken into consideration.

In simple terms, in rental lease agreements, there is, considered to be a transfer of interest from a lessor to a lessee. On the other hand a Leave and License agreement does not create any interest in the premises in favor of the licensee.

Leave and license agreements offer a higher form of protection for landlords against tenants. In general, rent control laws do not apply to leave and license agreements. Eviction, under leave and license is governed by the Easements Act.

NRI’s and PIO’s who wish to rent out their properties should consider using a Leave and License agreement. A comparison chart showing the difference between Lease Agreement and Leave & License is shown on the next page.