Paying Guest Agreement Template and How to Draft One (2026)

What is a paying guest agreement, and when do you need one? A paying guest (PG) agreement is a contract between the owner or operator of a property and a person who pays to stay there, usually in a shared room or a single room within a larger house or hostel-style accommodation, often with some services like meals, cleaning or Wi-Fi. It sets the rent, the deposit, the house rules, the services included, and how either side can end the arrangement. You need one whenever you take in paying guests or move into PG accommodation. A written agreement protects both sides: it fixes the rent and deposit, records the condition and inventory, sets clear house rules, and gives a lawful way to end the stay. Without it, disputes over deposits, notice and conduct become one person's word against another. A PG arrangement is usually structured as a leave and licence, not a lease or tenancy. A lease transfers an interest in the property to the occupant; a licence only gives permission to occupy, which can be withdrawn on the agreed terms. The licence structure is why a PG stay is easier to end than a tenancy, though a licensee who refuses to leave must still be removed through the proper legal process, not by force. This article is general guidance, not legal advice. Rent, stamp duty and tenancy rules vary by state in India, so have a qualified professional review any agreement before you rely on it. ## Paying guest agreement template Copy the block below and fill the bracketed fields. ```

PAYING GUEST (LEAVE AND LICENCE) AGREEMENT This Paying Guest Agreement ("Agreement") is made on [DATE] BETWEEN: [OWNER/OPERATOR NAME], [address] ("Licensor") AND [PAYING GUEST NAME], [address], [ID proof] ("Licensee") 1. LICENCE TO OCCUPY The Licensor grants the Licensee permission to occupy [describe the room/bed] at [property address] on a paying-guest basis. This is a licence to occupy only and does not create a tenancy or transfer any interest in the property. 2. TERM The licence runs from [START DATE] for [N] months, and may be renewed by mutual agreement. 3. RENT AND PAYMENT The Licensee will pay [CURRENCY/AMOUNT] per month, in advance, by the [Nth] of each month, by [mode]. [State whether electricity, water, Wi-Fi are included or billed separately.] 4. SECURITY DEPOSIT The Licensee will pay a refundable deposit of [CURRENCY/AMOUNT]. It will be refunded within [N] days of the Licensee vacating, after deducting unpaid dues and the cost of any damage beyond normal wear and tear. 5. SERVICES INCLUDED The following are included: [meals (specify), housekeeping, laundry, Wi-Fi, power backup]. Services not listed are not included. 6. HOUSE RULES The Licensee will: [follow entry/exit timings if any; keep the room clean; not sublet or allow others to stay; not cause nuisance; not keep prohibited items; respect other residents]. Breach of house rules is a ground to end this Agreement. 7. INVENTORY AND CONDITION The room and items listed in Schedule A are handed over in the condition noted. The Licensee will return them in the same condition, normal wear excepted. 8. NOTICE AND TERMINATION Either party may end this Agreement on [N] days written notice. The Licensor may end it immediately for non-payment or serious breach of house rules. On ending, the Licensee will vacate and hand back the room and keys. 9. LIABILITY The Licensor is not liable for the Licensee's personal belongings. The Licensee is responsible for damage they cause. 10. GOVERNING LAW This Agreement is governed by the laws of India and the state of [state]. Signed for the Licensor: __________ Signed for the Licensee: __________ Name / date Name / date

- **Rent and deposit (clauses 3 and 4).** Fix the amount, the due date and the mode. For the deposit, state exactly what can be deducted and when it is refunded. Deposit disputes are the most common PG conflict, so be precise.
- **Services (clause 5).** PG accommodation usually bundles services. List what is included and what is billed separately, so there is no argument about meals or Wi-Fi later.
- **House rules (clause 6).** These matter more in shared living than in a normal rental. Set out timings, cleanliness, no subletting, no nuisance, and make breach a ground to end the licence.
- **Inventory (clause 7).** Record the room's condition and the items provided, so the deposit can be settled fairly at the end.
- **Notice (clause 8).** Keep notice periods short and symmetrical, and allow immediate termination for non-payment or serious breach. Even so, a guest who refuses to leave must be removed lawfully. ## Common mistakes to avoid - Calling it a lease or tenancy, which can bring in rent-control and tenancy protections the owner did not intend.
- Vague deposit terms, so refunds become a dispute.
- No inventory or condition record, so damage claims are impossible to settle fairly.
- No clear house rules in shared accommodation, which causes most day-to-day conflict.
- Assuming an 11-month term means no stamp duty is needed, which is not reliably true.
- Trying to evict a guest by force or by locking them out instead of following the agreement and the law. ## A note on jurisdiction and stamp duty This template is written for India, where PG arrangements are usually documented as a leave and licence under the Easements Act, 1882, rather than a lease under the Transfer of Property Act, 1882. Stamp duty on a leave and licence is a state subject, so the rate and the basis differ by state; some states charge a percentage of the rent and deposit for the period, others a flat amount. The common belief that an 11-month agreement needs no stamp duty is not reliable: an insufficiently stamped document can be inadmissible in court, so stamping to the correct state value is the safe course. Registration is usually required only for agreements of 12 months or more, which is one reason PG and rental agreements are often kept to 11 months, but registration still adds protection. Some states and cities also require the owner to register PG premises or report tenant details to the police; check local rules. Say "varies by state" rather than assume one rule fits all. Last verified October 2026. <!-- [VERIFY: state-specific stamp duty rate and PG/police registration requirements] --> ## Where a contract workspace helps A template gives you a solid PG agreement. The ongoing work is everything after signing: keeping the rent, deposit and house-rule terms consistent across many guests, checking each agreement before you sign, tracking renewal and notice dates and deposit refunds, and keeping versions and inventories straight as guests come and go. Drafting, reviewing, tracking and governing a paying guest agreement can live in one AI workspace tuned to how you run your accommodation, so a change to rent or notice flows through, terms can be edited in plain language, and key dates and obligations stay in view. [Adira](https://adiralaw.com) is one tool that keeps this in a single workspace. This template alone is enough to put a fair agreement in place; a workspace just makes drafting, review and tracking one connected job.