Property Licensing

Property licensing refers to a type of commercial property rental agreement that allows another person to use all or part of the property in a certain way. It is distinct from a lease, which grants exclusive possession and usage on a fixed-term basis, with rent payable in return.

A license is a potentially more flexible arrangement than a lease and may be more suitable if both landlord and tenant are seeking a short-term rental agreement, for example in relation to commercial premises rented out as serviced offices, or to a small start-up business or pop-up shop.

A license will often cover a shorter timescale than a lease, usually with fewer conditions attached. Unlike a leaseholder, the licensee will hold no interest in the property and will not enjoy a right of exclusive possession, since the landlord will always retain the right of entry, for example, to carry out an inspection.

A further advantage of property licensing is that both parties have the right to terminate the agreement, which will usually feature a short notice period on both sides: typically, just 28 days. A tenant in a property licensing scenario will have no automatic right of renewal, often making this a more flexible option for commercial landlords.

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Property licensing has the potential to help both landlord and tenant to make the most of their commercial opportunities in the right circumstances. It is, however, essential that the licensing agreement is carefully drafted and clearly reflects the intentions of both parties. This is because if the terms and wording of the agreement in fact resemble those of a lease, then it may be treated as such by the court in the event of a dispute arising. It is therefore essential to seek specialist advice in the law and practice of property licensing before entering into an agreement.

The property licensing experts at Ackroyd Legal have diverse expertise and understanding of all aspects of property law and will negotiate the licensing agreement on your behalf, ensuring that your intentions are properly reflected in order to protect your commercial interests.

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