Lease Agreement or License Agreement - What Should I Opt for?

1.   Major Differences:

There are several crucial differences between a lease and license agreement. 

a)   Under license agreements, the legal ownership and the possession of the property remain with the licensor.  Under a lease agreement, the tenant generally has exclusive possession to the property. In other words, a license does not create any interest or control on the premises in favor of the licensee.
b)   A licensee cannot give the premises on rent to a third party under any circumstances. On the other hand, a tenant can sub-let the premises to a third party, unless the rental agreement says otherwise.
c)   A license agreement is easier to terminate than a rent agreement. License agreements are terminable, whereas lease agreements are generally not.
d)   The amount payable towards stamp duty is more for a lease agreement as compared to a leave and license agreement. But for a duration of more than three years, the stamp duty payable is the same for both.
e)   In case of a lease agreement, if the agreement is for a period of less than 12 months, it does not have to be registered. However, a lease agreement for 12 months and beyond has to be compulsorily registered. In many states, a license agreement does not have to be registered.

 2.   What do you recommend I should enter into? A Lease Agreement or a License Agreement?

Let us take the example of a person who wants to occupy a property in a shopping mall. In this situation, it is advisable to enter into a lease agreement than a leave and license agreement, because you will then have an interest in the property. In other words, you will have more control over the property.

It is a common practice among owners of shopping complexes and malls to give out parts of the property on leave and license basis, so that they can have more control over their property.
If the rental amount and the license fee that you have to pay is the same (like you have mentioned in your question), it is better to enter into a rental agreement with the owner of the shopping complex. In some States like Maharashtra, you will also receive the protection of the Maharashtra Rent Control Act, which is a tenant-friendly legislation.

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ASK to exit Noida residential project with profit

Real estate-focused private equity (PE) fund ASK Property Investment Advisors—part of the diversified financial services firm, ASK Group—is charting its first exit since it started deploying money in 2010.
The fund will get returns of about 2.5 times on the Rs.50 crore it invested in a residential development  project in Noida by ATS Infrastructure Ltd, group chief executive Sunil Rohokale said. ASK Property made the investment in 2010.
Several PE exits are expected in fiscal 2013, particularly on investments made in realty projects in 2007, said analysts. Investors in PE firms typically seek returns on their investments in three-five years, Livemint reported.
“We have made seven investments in residential projects from our first fund, and we expect IRRs (internal rate of returns) of 30% from them,” said Rohokale.
The 14.5-acre Noida project, comprising 12 towers, will be completed in a few months. ASK will probably exit the project a few months before schedule, helped by the strong sales for it, Rohokale said.
While exits in office projects are usually in the form of buy-backs by developers or sales to third-party investors or buyers, exits in residential projects self-liquidate as sales happen.
ASK Property, which invested in the ATS project from its Rs.326-crore first fund, ASK Real Estate Special Opportunities Portfolio-1, is raising a second domestic fund of about Rs.1,000 crore. It has so far raised Rs.850 crore for it.
ASK has invested close to Rs.600 crore from its first and second funds, including the three investments it made in Mumbai and Pune this year.
Shortly, it will also begin raising its first offshore fund of $250-300 million, which it recently registered in Singapore.
As a fund, ASK Property invests in residential projects and is particular about the price band in which the apartments are sold. In Mumbai, it typically invests in projects priced at Rs.8,000-12,000 a sq.ft.
In Pune, Delhi-National Capital Region and Bangalore it invests in projects priced at Rs.4,000-6,000 a sq.ft.
In 2011, Kotak India Real Estate Fund-I sold its stake in an office building in Mumbai to a fund managed by Tata Realty and Infrastructure Ltd for Rs.385 crore on an investment of Rs.95 crore. In another exit later, Kotak sold its stake in 3C Company’s information technology park project in Noida back to the promoters, earning a return of less than 30% on its investment.
Many PE funds focused on real estate will be under pressure to show exits to investors this year as their investment cycles near an end, or find it difficult to raise fresh capital, said Amit Goenka, national director-capital transactions, Knight Frank India, a property advisory.
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Cee Dee Yes Gives Freebies With Flat at Chennai Pattinam

CEE DEE YES’ ambitious residential township ‘Chennai Pattinam’ (CP) is still craving for buyers. Launched a few years ago with attractive payment plans at reasonable price, the developer has recently  advertised in major print and online media publications with added freebees.

As the project is almost completed, CEE DEE YES is currently offering ‘ready-to-occupy-homes at CP with a car – either Hyundai Eon or Maruti Alto 800 with 3 BHK and 2 BHK, respectively, coming absolutely free.

 

As an alternate option, the builder is offering return of rentals (ROR) on the same day of booking 2BHK and 3BHK flats. Those who buy 2 BHK homes will get the up-front rental return of Rs 3.96 lakh while for 3 BHK people will get Rs .76 lakh.

Coming up at ‘Thiruporur’, one of the fastest growing suburbs of Chennai, famous for Murugan Temple, CP is comfortably placed off Old Mahabalipuram Road (OMR) and GST Road. Being offered at an all-inclusive cost of Rs 2750 per sq ft with no hidden charges, the builder is claiming that other incidental charges such as car park, registration, EB connection, STP, Legal and documentation charges have been included in the basic price itself and buyers will not have to pay anything extra.

With 450 families being moved in already at CP, the integrated township offers symphony of ready-to-use lifestyle amenities such as multi-purpose hall, Green Trends beauty salon, indoor games, children’s play area, bus shuttle service, super market, swimming pool, cafeteria, ATM, DAV Public School with CBSE curriculum and hosts of other facilities.

Home loans are offered by leading bankers such as DHFL, ICICI, HDFC, Canara Bank, LIC HFL and Indian overseas bank. While 2BHK homes are available between 1075 sq ft to 1150 sq ft, 3 BHK apartments are made between 1600 sq ft to 2250 sq ft.

Away from the hustle and bustle of Chennai, but near to the rapidly growing IT corridor, CEE DEE YES’ Chennai Pattinam intends to combine the relaxed suburban living with the infrastructure and latest amenities of a well-planned township.

Established in 1990 with an aim of bringing high quality construction at reasonable prices to Indian buyers CEE DEE YES is headed by C Devadasa Sundaram, a Civil Engineer having more than 45 years experience in construction industry. 

CEE DEE YES has been building residential and commercial real estate for over three decades. The company is proactively working towards eco-friendly architecture in all its projects, says the company website.

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Godrej Properties to Build a Township in North Bangalore

Realty firm, Godrej Properties is entering into various partnerships with land owners to keep on adding projects to its portfolio. Recently, it has entered into a joint venture in Bangalore to develop a 100-acre township. The name of the other company is not revealed yet. In this 100 acre, around 9.4 million square feet will be offered as a potential saleable area.


The project is designed to be developed as a integrated township with a mix-development, that is, it will have residential apartments, school, convenience store apart from other basic amenities.
Sources said that Godrej Properties has entered into an LLP (Limited Liability Partnership) to build a residential township project in North Bangalore.

This will be the third township project after the projects in Ahmedabad and Mumbai and we are looking forward to create an outstanding destination, said Mr. Pirojsha Godrej, Managing Director and CEO of Godrej Properties.

Last month Godrej Properties has joined hand with two local firms to develop a premium housing project in Pune. As per the agreement, Godrej will get 35% of profit from the 43 acre Joint venture project. Apart from this, they have another venture with Godrej & Boyce wherein they are developing a premium residential project at Vikhroli in Mumbai.

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