Leasing

Lease vs leave-and-licence: what Chennai offices sign

The two agreements a business can sign for a space, what each gives you, and what Tamil Nadu's tenancy law now asks of both.

Updated 13 Oct 2026By S N Enterprises6 min read

In short

A lease gives you an interest in the space; a licence is only permission to use it. Courts go by what the document does, not what it's called.
Tamil Nadu's 2017 tenancy law covers shops and offices: every tenancy agreement, even an 11-month one, is registered with the Rent Authority within 90 days.
A lease for more than a year also has to be registered at the Sub-Registrar, with stamp duty paid.

In this guide

The difference in one line each
What Chennai offices actually sign
Tamil Nadu's tenancy law covers offices and shops
When the Sub-Registrar comes in
Questions

The difference in one line each

A lease transfers a right to enjoy the property for a rent, for a period (Transfer of Property Act, section 105). A leave-and-licence is only permission to use the space; it creates no interest in the property (Indian Easements Act, section 52).

	Lease	Leave-and-licence
What you get	An interest in the space	Permission to use it
Can it be passed on?	Usually, unless the deed forbids it	No (Easements Act, s.56)
If the owner sells	Binds the buyer	Doesn't bind the buyer (s.59)
Typical length in Chennai	3 to 9 years, with a lock-in	11 months, renewed

What matters is the substance. A document called a licence that gives you exclusive possession for years, at a rent, can be read as a lease.

What Chennai offices actually sign

Small shops and offices often start on 11-month agreements: short enough to skip registration at the Sub-Registrar. Larger offices sign leases of three to five years, sometimes with a renewal. Recent Chennai tech-park leases run, for example, three years plus a three-year renewal, or five years; a listed office REIT reports Grade A leases of 5 to 15 years.

If you're comparing spaces, see what the lock-in and escalation will cost you over the term, not just the first month's rent.

Tamil Nadu's tenancy law covers offices and shops

The Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 has applied since 22 February 2019, to residential and commercial tenancies alike (premises registered under the Factories Act are left out).

Every tenancy agreement is registered with the Rent Authority within 90 days, including agreements shorter than 12 months. It's done online at tenancy.tn.gov.in; there's no government fee (the online service charges ₹100).
This is separate from registration at the Sub-Registrar, and needed even when the Sub-Registrar isn't.
An unregistered agreement can't use the Rent Court. The Madras High Court has held that such parties must go to a civil court instead.
A deposit above three months' rent is only lawful if the agreement says so (section 11), so write a larger deposit into it.

Whether a leave-and-licence also has to be registered with the Rent Authority isn't settled: the Act doesn't mention licences, while the state's own FAQ says a licence that creates any right in the property should be registered. SNE's advice is to register it.

When the Sub-Registrar comes in

The Registration Act (section 17) makes registration compulsory for a lease from year to year, for more than a year, or reserving a yearly rent. That's why so many agreements run for 11 months. A longer lease is stamped and registered: see registering a commercial lease in Tamil Nadu for the stamp duty and the steps.