Section 105 of the Property Transfer Act, 1882 defines a rental of a property as a transfer of a right to Dener for a specified or permanent period, taking into account a price paid or promised or a portion of the estate, a share of crops, services or something of value to be provided periodically or on certain occasions to the purchaser by the purchaser who accepts the transfer on these terms. The transferor is designated as the owner and the buyer as the tenant. The price is called the premium and money, the action, the service or something else that needs to be rendered so, the rent is called. In the absence of a document out of the parties` intentions, it may be difficult to determine whether the agreement is a lease agreement or a licence in the event of a deterioration of the relationship. “A license does not create an estate or interest in the property to which it relates. It merely gives a privilege in the use of the property and makes legitimate an act which, without it, would be illegal. Learn more about how homeowners can start using licenses rather than leases. When initiating a lease or licence agreement, it should be remembered that the intentions of the parties are clearly defined and that the legal drafting is watertight to ensure that an occupant does not accidentally receive sole possession of all or part of a property. For more details, please contact one of our lawyers in Dubai or other offices in the United Arab Emirates and overseas. 3) A rental statement must be stamped and registered. The amount payable for stamp duty of the lease deed is more than the amount of notices of lease to be paid for the leave and license. For a period of more than three years, stamp duty is the same for both agreements. One of the findings of whether the person in possession of the person is a tenant or a licensee is a factual finding. In order to determine whether a document creates a lease or license, the content of the document should be preferred to its form.
If it creates an interest in the property, it is a lease; however, if it allows only one other to use the property whose legitimate ownership and control continues with the owner, it is a licence. A license does not create an estate or interest in the property to which it relates. It is therefore not a question of words which, in the instrument that creates it, but of its content, whether an instrument functions as a leasing or licensing object. Decisive reflection is the intention of the parties, but the intention must be gathered on a real construction of the agreement and not only on the description of the parties. If the document is ambiguous on the question of intent, it is a question of deciding the environmental pros and cons of the circumstances and the evidentement. However, a document expressing the intention of both parties or a party to create a licence creates a lease agreement if the rights and obligations of law and obligations comply with the legal requirements of the lease. The mere use of words appropriate to a lease does not preclue the use of a licence; even a document that refers to “rental,” perhaps a license.