A leave and license agreement is an instrument/agreement wherein the licensor allows the licensee to temporarily occupy and use one portion of the immovable property for carrying on his business for residential purposes.

The provisions relating to standard rent and permitted increases will not apply to any premises let or given on license in a building.

Any licensee who does not deliver possession of the premises to the landlord on expiry of the period of license and continues to be in possession of the licensed premises till he is dispossessed by the Competent Authority shall be liable to pay damages at double the rate of the license fee or charge of the premises fixed under the agreement of license.

A licensee in possession of premises on license for residence shall delivering the possession of such premises to the landlord on expiry of the period of license; and on the failure of the licensee to so deliver the possession of the licensed premises, a landlord shall be entitled to recover possession of such premises from a licensee, on the expiry of the period of license, by making an application to the Competent Authority, and, the Competent Authority, on being satisfied that the period of license has expired, shall pass an order for eviction of a licensee.

There is no provision in the Registration Act - 1908 for cancellation of registration of an agreement including a leave - license agreement, there are two ways by which an agreement is discontinued. An agreement is a law for the parties to that agreement. On the basis of the provisions in the agreement any party or parties to the agreement, as the case may be, can decide to discontinue the agreement by giving notice to the remaining party or parties. The period of notice is normally given in the agreement. An agreement gets discontinued when the purpose or the time period of the agreement is over. Registration goes along with the agreement registered. If the agreement itself is not in existence, no question of registration arises. It no longer exists.

A licensee only has the right to occupy and use the property as a mere licensee. A licensee cannot transfer his right over the property and also does not have exclusive possession of the property. The legal possession of the property is deemed to be that of the licensor.

Any person who is legally entitled to enter into a contract may take a property under lease or leave and license.

Any kind of immovable property, including land, flats etc. may be taken on lease or leave and license unless there is a restriction on the transferability of the rights of such property.

The following are some of the differences between the lease and a license:
A lease is a transfer of an interest in a specific property, while license is a mere permission to use the property, without any transfer of any interest in the property.
Licensee only acquires a right to occupy the property and the legal ownership and the possession of the property remain with the licensor. In case of a lease, the legal possession of such property is also deemed to be transferred to the lessee.
A licensee cannot sub-license the property to a third party under any circumstances. On the other hand, a lessee can sub-lease the property to a third party, unless the lease agreement expressly provides otherwise.
Lease is an inheritable right. A license is personal and exclusive to the licensee i.e. on death of the licensee it automatically stands terminated.

It is rather a convention that is being followed by landowners to seal rental/ lease agreements only for 11 months to avoid registration of the agreement with the local competent authorities.
A rental agreement exceeding 11 months in tenure should be mandatorily registered to make it executable under the Registration Act of India. To avoid these formalities, agreements are made for 11 months and extended as per mutual consensus of the parties involved.