Lease

A lease of immovable property is defined in Section 105 of the Transfer of Property Act, 1882 as a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee. The transferor is called the lessor, the transferee the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.

The essential elements of a lease: (1) Parties — a lessor and lessee; both must have legal capacity; (2) Property — immovable property only (movable property is governed by bailment under the ICA); (3) Transfer of right to enjoy — possession and enjoyment pass to the lessee; ownership stays with the lessor; (4) Duration — a definite term (fixed period), or in perpetuity, or from year to year; and (5) Consideration — premium (lump sum, common in long-term leases) and/or rent (periodic payment). A lease must be distinguished from a mere licence (which grants permission to use without creating any interest in the property) — a licence is revocable; a lease creates a property right enforceable against the world.

Rent control legislation (like the Maharashtra Rent Control Act, Delhi Rent Act) provides significant protections to tenants (lessees) in residential and commercial properties — restricting the landlord's right to increase rent and evict. These Acts override the TPA to the extent of their application. In practice, urban landlords often prefer to create 'licences' (using leave and licence agreements) rather than leases, to avoid the strong protections of rent control law. Courts examine the substance of the arrangement — if exclusive possession was given, it is a lease regardless of what the document calls it.

For advocates, lease disputes involve: (1) registration requirements — unregistered leases exceeding one year are inadmissible in evidence (Section 49 Registration Act); (2) eviction proceedings — under the TPA or the applicable rent control statute; (3) rent recovery — a lessor's remedy for unpaid rent; (4) assignment of lease — whether the lessee can sublet or assign without the lessor's consent; and (5) determination of lease on breach — Section 111 TPA specifying the grounds for forfeiture and the lessee's right of relief against forfeiture.