Divyasparsh, as one of the best real estate companies in Pune, is committed to providing the best services possible. Part of this involves being able to fully understand the world of real estate so that its clients can make the best, most informed decisions. Real estate terms are numerous and often confusing. Not being able to keep track of them can land a significant blow on your investments. To that end, this article, we will be explaining the differences between lease and license
What Is A Lease?
A lease is an agreement between a landlord and a tenant that gives the tenant an exclusive interest in a property. In other words, the lease is a written agreement between the owner of a property and a tenant giving them the sole right to reside there. A commercial lease is basically the rental agreement between the business and the owner of the office space they are using to run their operation smoothly. A lease is commonly in effect for retail stores, office spaces or warehouses.
What Is A License?
Section 52 of the Indian Easement Act defines a license as a right where “Where one person grants to another, or to a definite its number of other persons, a right to do or continue to do, in or upon the immovable property of the grantor something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property”.
In simpler terms, a license is not so much an agreement as it is permission from the owner of a property for a business to utilize it for specific purposes, usually for a short period of time. They are much more flexible than a lease generally is. They are commonly used for event kiosks or pop-up shops.
The Difference Between Lease and License
The main difference between lease and license is largely in their function and implementation. A lease is largely for a long period of time for a more permanent space, while a license is for a short period of time that can be revoked by the owner very quickly. Furthermore, a lease transfers certain rights associated with the property to the tenant, while license users have no control over this despite having permission to use it. However, licenses are much more flexible and easier to terminate for both the user and the owner, while a lease is more formal and legally binding. A table describing the difference between lease and license is given below.
Comparison Table: Difference Between Lease And License
| LEASE | LICENSE |
| Long-term | Short-Term |
| Formal | Less formal |
| Difficult to terminate | Easily terminated |
| Stable | Flexible |
| Ideal for Office spaces, retail shops, warehouses etc. | Ideal for kiosks, event shops etc |
Which Is Right For Your Business?
Because of the difference between lease and license, your business model will determine which of these is a better choice. If your business model involves creating long term connections with clients by having permanent shops and showrooms for them to obtain your goods and services, you might want to use a lease for your property. This kind of business model requires stability, and also needs you to be able to take control of the space and make it identifiable with you and your organization. On the other hand, if your business model aims at becoming more widespread and recognisable by constantly participating in events with stalls, kiosks, or temporary pop-ups; a license becomes more attractive due to its flexible and short term nature.
It also depends on a case-by-case basis. A permanent or established brand may generally obtain a lease, but may decide to set up a stall at a festival-which would work better with a license. Because of the variability of needs and applications, understanding the difference between lease and license is crucial.
Divyasparsh Group
The Divyasparsh Group is one of the leaders in commercial property development in Pune. It established its standing with quality projects such as Ambrosia Galaxy in Baner. Its high standards for execution ensure that any venture it undertakes is of benchmark quality. Their commitment to transparency, reliability, and value are what drives them forward, giving you real estate investments you can rely on.
Conclusion
Understanding the fine print of any industry can be challenging, but it is essential if you want to gain an edge. Even something as simple as the difference between lease and license can be confusing to understand. Knowing the difference between lease and license can help you use your space more effectively and make your company more productive. But this is just one part of making the right choices for your business. You need to choose the right assets, the right builders. You need a legacy you can rely on. If you want to learn more about Commercial Real estate, or want to start investing, visit Divyasparsh Infra today!
FAQs
What is the main difference between lease and license in terms of usage?
A lease is used for long term purposes, such as an office space or showroom. A license is used for short term purposes, like a pop-up shop or event kiosk.
Does lease or license give you more control over the property?
A major difference between lease and license is that a lease gives the tenant some degree of control over the property, while a license gives no control or rights to the tenant.
Is a lease more stable than a license?
Yes, a lease is more stable than a license because it is meant for long-term use.
