Definition of lease Under Section 105 of Transfer of Property Act : 

              A lease of immovable property is 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, who accepts the transfer on such terms.

Lessor, lessee, premium and rent defined : 

             1) Lessor : The transferor is called the lessor,

             2) Lessee: The transferee is called the lessee,

            3) Premium : the price is called the premium, and;

            4) Rent : the money, share, service or other thing to be so rendered is called the rent.

Essentials of the Valid Lease : 

1) The Lessor must be a competent 

2) The Lessee must be a competent and capable to taking the thing demised.

3) The subject matter of lease must be an immovable property.  

4) Immovable property must be transferable Property.

5) There must be Transfer of right to enjoy such property.

6) Lease must be made for a certain time, express or implied or in perpetuity. 

7) The Consideration which may be premium a rent or both.

8) The lessee must accept the transfer.

9) In lease there is a separation of ownership and possession

10) The lease must be created as per the provisions prescribed in Section 107 of Transfer of Property. 

A lease to a minor is void.

Lessor, lessee, premium and rent defined : 

             1) Lessor : The transferor is called the lessor,

             2) Lessee: The transferee is called the lessee,

            3) Premium : the price is called the premium, and;

            4) Rent : the money, share, service or other thing to be so rendered is called the rent.

Rights and liabilities of lessor and lessee -

         Section 108 of the Transfer of Property Act 1882 provides rights and liabilities of lessor and lessee :
          Rights and liabilities of lessor and lessee In the absence of a contract or local usage to the contrary,
the lessor and the lessee of immovable property, as against one another, respectively, possess the rights
and are subject to the liabilities mentioned in the rules next following, or such of them as are applicable to
the property leased -

(A) Rights and liabilities of the lessor

     (a) The lessor is bound to disclose to the lessee any material defect in the property, with reference to its
intended use, of which the former is and the latter is not aware, and which the latter could not with ordinary
care discover;

     (b) The lessor is bound on the lessee's request to put him in possession of the property;

     (c) The lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the
lease and performs the contracts binding on the lessee, he may hold the property during the time limited by
the lease without interruption. The benefit of such contract shall be annexed to and go with the lessee's
interest as such, and may be enforced by every person in whom that interest is for the whole or any part
thereof from time to time vested.

(B) Rights and liabilities of the lessee 

(d) If during the continuance of the lease any accession is made to the property, such accession (subject to
the law relating to allusion for the time being in force) shall be deemed to be comprised in the lease;

 (e) if by fire, tempest or flood, or violence of an army or of a mob, or other irresistible force, any material
part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes
for which it was let, the lease shall, at the option of the lessee, be void:

Provided that, if the inquiry be occasioned by the wrongful act or default of the lessee, he shall be entitled to
avail himself of the benefit of this provision;

(f) if the lessor neglects to make, within a reasonable time after notice, any repairs which he is bound to
make to the property, the lessee may make the same himself, and deduct the expense of such repairs with
interest from the rent, or otherwise recover it from the lessor;

(g) if the lessor neglects to make any payment which he is bound to make, and which, if not made by him,
is recoverable from the lessee or against the property, the lessee may make such payment himself, and
deduct it with interest from the rent, or otherwise recover it from the lessor;

(h) the lessee may even after the determination of the lease remove, at any time whilst he is in possession
of the property leased but not afterwards all things which he has attached to the earth; provided he leaves
the property in the state in which he received it;

 (i) when a lease of uncertain duration determines by any means except the fault of the lessee, he or his
legal representative is entitled to all the crops planted or sown by the lessee and growing upon the property
when the lease determines, and to free ingress and egress to gather and carry them;

 (j) the lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his
interest in the property, and any transferee of such interest or part may again transfer it. The lessee shall
not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease;
nothing in this clause shall be deemed to authorise a tenant having an untransferable right of occupancy,
the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an
estate under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee;

(k) the lessee is bound to disclose to the lessor any fact as to the nature or extent of the interest which the
lessee is about to take of which the lessee is, and the lessor is not aware, and which materially increases the
value of such interest;

(l) the lessee is bound to pay or tender, at the proper time and place, the premium or rent to the lessor or
his agent in this behalf;

(m) the lessee is bound to keep, and on the termination of the lease to restore, the property in as good
condition as it was in at the time when he was put in possession, subject only to the changes caused by
reasonable wear and tear or irresistible force, and to allow the lessor and his agents, at all reasonable times
during the term, to enter upon the property and inspect the condition thereof and give or leave notice of any
defect in such condition; and, when such defect has been caused by any act or default on the part of the
lessee, his servants or agents, he is bound to make it good within three months after such notice has been
given or left;

(n) if the lessee becomes aware of any proceeding to recover the property or any part thereof, or of any
encroachment made upon, or any interference with, the lessor's rights concerning such property, he is
bound to give, with reasonable diligence, notice thereof to the lessor;

(o) the lessee may use the property and its products (if any) as a person of ordinary prudence would use
them if they were his own; but he must not use, or permit another to use, the property for a purpose other
than that for which it was leased, or fell or sell timber, pull down or damage buildings belonging to the
lessor, or work mines or quarries not open when the lease was granted, or commit any other act which is
destructive or permanently injurious thereto;

(p) he must not, without the lessor's consent, erect on the property any permanent structure, except for
agricultural purposes;

(q) on the determination of the lease, the lessee is bound to put the lessor into possession of the property.

The essentials ingredients of a lease agreement are:

o Parties to the agreement;

o The identification of the property subject matter of the arrangement;

o Term of lease,

o Rent,

o Date of commencement and expiry.

Procedure of forming a lease agreement:

Lease of immovable property for one year, or term exceeding one year, can only be made
by registered instrument. All other leases may be made by unregistered instruments or
oral agreements.

Where there is no contract or local law governing the execution of a lease deed then
lease of immovable property for agricultural or manufacturing purpose shall be deemed
to be on yearly basis and terminable on the part of either lessor to lessee by giving 6
months notice. On the other hand a lease of immovable property for any other purpose
shall be for monthly basis, terminable by either lessor or lessee by giving 15 days notice.

In the absence of a lease agreement in writing or the existing agreement is silent on the
rights and liabilities of lessor or lessee then section 108 of the Transfer of Property Act
sets down the guidelines to be followed for a working relationship in a lease
arrangement. Once the lessor transfers the property leased to the lessee, the lessee in
the absence of contract to the contrary shall possess all the rights and will also be
subject to all the liabilities of the lessor as he is the owner of it. For computing the time
for a lease of immovable property, if time is expressly mentioned then the lease of
immovable property will commence from that particular day and where no time is
mentioned the lease begin from the day when it was entered into.

Where the time is limited and the lease can be terminated before the expiration, but the
lease deed omits to mention at whose option it is terminable. In such a case the lessee
will have the option to determine the lease.

The Right of Possession:

A lease of an immovable property can be determined through 8 modes and it is only by

o By efflux of time limited thereby;

o where the interest of the lessor terminates on happening of an event;

o the interest of the lessor terminates on, or his power to dispose of the same extends to
the happening of any event;

o in case the interest of lessor and lessee becomes vested;

o express surrender before the term is over;

o implied surrender;

o forfeiture;

o When the lessee renounces his character

The prerequisites of the agreement:

Holding over comes into play when even after the determination of lease the lessee
remains in possession of the property and the lessor or his legal representatives accept
the rent and assent to the continuing possession by the lessee. In such a case the lease
stands renewed year after year or month after month according to the purpose for which
the property is leased. Where lease of immovable property has been determined by
forfeiture for non-payment of rent and the lessor files a suit to evict the lessee. If the
lessee at the hearing of the suit pays to the lessor rent in arrear with interest, full cost of
suit or provides sufficient security within 15 days, the court may pass an order to relieve
the lessee from forfeiture and allow him to hold on to the property.

Lease and License:

Lease and license are two different aspects of transferring property and to ascertain
whether the transaction is a lease or license it has to be ascertained whether parties had
intended to create a lease or a license; if the document creates an interest in the
property, it can be referred as lease and if it permits a person to use a property and the
legal possession remains with the owner or the original lessee it is called a license.

The Stamp Duty Act 1899:

The Stamp Duty Act 1899 enumerates the value of stamp duty payable on different lease
documents. A lease agreement can be stamped as an ordinary agreement under article 5
of the Indian stamp act and corresponding provision of the state stamp duty act. If an
agreement of lease amounts to a demise it is required to be stamped under article 35 of
the Indian stamp act which also includes a sub-lease or an agreement to let and sublet.
Under article 35, duty charged is on the average annual rent which is multiplied by the
number of years according to the length of the lease period.

Therefore, while entering into a lease, lessor and lessee have to act according to the
provisions mentioned under Transfer of Property Act, registration, amount payable on
account of stamp duty and other terms and conditions so mentioned in the lease deed.