Be Informed
that there is a licence agreement. The licence agreement must go further and reserve rights for the licensor to access certain areas in the premises or, better yet, unrestricted access over the premises – and even then the arrangement might still be a lease. Term Generally both a lease and a licence will stipulate a term. The term of a licence tends not to exceed 12 months. It is often the case that when the term of a licence has expired, the occupier remains in occupation and continues to occupy the premises on the same terms as before. In the circumstances, the continuing term may be considered as a periodic one and could give rise to a lease. Conclusion Even the best drafted agreement means nothing if the parties fail to follow its terms. Therefore, if at the point of dispute, a licensor is held to have neglected to exercise his right of occupation or to have allowed the licensee to
maintain the property or pay services in his own name, the licence agreement might actually be deemed a lease. Such technicalities are among the several factors to consider when structuring business occupancies. Entering into these agreements without legal advice could have substantial cost implications in the long haul. Ultimately, the decision to lease or to licence depends on the circumstances of the occupation. Gary C. E. Harris LLB (Hons), LLM (UCL), MPhil (Cantab) Associate - Corporate/Commercial Livingston, Alexander & Levy
The information contained in Places and Spaces is intended to provide general information in summary form current at the time of printing. The contents do not constitute legal advice and should not be relied on as such. Specialist advice should be sought in particular matters.
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