Every Mumbai rental runs on a document most tenants sign without reading: the leave-and-licence agreement. It decides what happens to your deposit, how much your rent rises next year, and how quickly you can be asked to leave. Here is what it actually is, what it must cost, and the clauses worth arguing about.
Leave & licence, not a lease
In most of India a rental is a lease. In Maharashtra, almost every residential agreement is a leave and licence: the owner (licensor) grants you (licensee) permission to occupy the flat, without creating any tenancy rights in the property. Owners prefer it because it avoids the old rent-control regime; for you the practical difference is small, but the terminology matters when you read the agreement - you are the licensee, the deposit may be called a security deposit or interest-free refundable deposit, and the "rent" is the licence fee.
Registration is mandatory - and it protects you
Under Section 55 of the Maharashtra Rent Control Act, 1999, a leave-and-licence agreement must be registered, and the obligation is on the landlord. A notarised agreement on ₹500 stamp paper is not a registered agreement.
Why you should insist on it even if the owner shrugs:
- A registered agreement is accepted as address proof for Aadhaar updates, passports, bank accounts and vehicle registration. Notarised ones increasingly are not.
- It is the document that makes your deposit legally recoverable in a dispute.
- Registration happens against Aadhaar-verified identities, which confirms you are dealing with the real owner - useful if you found the flat without a broker.
The process is online in Maharashtra with doorstep biometric verification, and takes a few days end to end.
What it costs
| Component | Amount |
|---|---|
| Stamp duty | 0.25% of total rent for the period (plus a notional amount on the deposit) |
| Registration fee | ₹1,000 (urban areas) |
| Service / doorstep charges | ₹1,000-2,000 if you use an agent or online service |
For a ₹40,000/month, 11-month agreement that is roughly ₹1,100 of stamp duty plus the ₹1,000 fee - a rounding error next to the deposit. Who pays is negotiable; splitting 50-50 is common.
The 11-month myth
Agreements are habitually written for 11 months because in many states, terms under one year escape compulsory registration. Maharashtra requires registration regardless of duration, and leave-and-licence terms can legally run up to 60 months. So an 11-month term buys the owner an early renegotiation point and buys you nothing. If you plan to stay, ask for 22 or 33 months with a fixed escalation - it locks your rent and halves the paperwork.
Clauses to read before signing
- Deposit and refund timeline. The amount, and the number of days after vacating within which it is returned. Push for a stated timeline (e.g. "on the day of handover" or "within 15 days"). More in the deposit guide.
- Escalation. 10% per year (or on renewal) is the Mumbai default; 5-7% is achievable, especially in a soft market. Check the reported rents for your area on the area guide before agreeing.
- Notice period and lock-in. One to three months' notice is standard on both sides. A lock-in binds you - leaving early means paying rent for the remaining lock-in months or forfeiting deposit. Negotiate it down if your job may move you.
- Maintenance. Who pays the society maintenance charge? In Mumbai it is usually the owner unless the agreement shifts it to you - read this line twice.
- Repairs. Standard split: structural and appliance repairs on the owner, minor day-to-day wear on you. Get pre-existing damage photographed and attached.
- Use restrictions. Clauses about "family only", non-vegetarian food, pets or overnight guests are contractual, not illegal - if you are a bachelor, see our guide to bachelor-friendly areas and get any verbal assurances written in.
Police intimation
Mumbai Police require landlords to submit tenant details (online tenant verification). It is the owner's job, takes minutes, and a landlord who refuses to do paperwork this basic is telling you something. Cooperate with the ID copies it needs - it protects both sides.
Before you sign anything, know the fair rent
The agreement formalises whatever number you negotiated - so negotiate from data. Check what tenants report actually paying in your area on the BombayRents map, and after you move in, add your own rent (anonymously) so the numbers keep getting better.