Tenancies, Lettings and Licenses

23/07/18

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    Business premises are usually occupied under a lease. A lease is a formal arrangement whereby the Tenant has exclusive use of the premises for a specified term. Leases usually contain detailed provisions as to what a tenant must and must not do in order to protect the value of the Landlord’s reversionary interest in the premises.

    Sometimes it is not appropriate to grant a lease. If the business is only going to occupy the premises for a short time (say, less than 6 months) or if the parties are in the process of negotiating a lease but the Tenant needs to occupy the premises immediately, the parties may wish to use a Tenancy at Will or a Licence. A Licence may also be appropriate where a Landlord is providing serviced office accommodation.

    A Tenancy at Will has no fixed term and can be terminated by either party at any time with immediate effect. It is therefore only suitable for very short term arrangements.

    A Licence is more like a lease in that it has a fixed term. However, a Licence is unlike a lease in that it is not an interest in land and a licensee cannot acquire security of tenure. An arrangement is a lease if the occupier has exclusive possession of premises for a fixed term. Such an arrangement is a lease whether or not the parties call it a lease. It cannot be a licence just because the parties call it a licence. The Licences in this sub-folder are drafted in such a way that the licensee does not have exclusive occupation of the premises.

    Beware of granting a “licence” that is really a lease. A court might decide that the licensee is really a tenant who has security of tenure. If there is any doubt as to whether a proposed arrangement will be a lease or a licence, the safest approach is to grant a lease which excludes the tenant’s right to security of tenure.

    Listed below are a selection of Tenancy at Will Agreements and Licences for Offices.

    Tenancy at Will for a Self-Contained Office Building
    Tenancy at Will for Office(s) within a Shared Building
    Tenancy at Will for Office over a Shop
    Licence to use Furnished and Serviced Office Suite (with Inclusive Rent)
    Licence to use Furnished and Serviced Office Suite (with Service Charge)

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