Support in negotiations

Support in negotiations

Landlord Licence Assistance

Rental agreement categories

The two categories of rental agreement most frequently used by landlords of commercial premises are a lease or a licence.

A lease will normally extend over a period of several years, although short-term leases are also an established feature in the commercial property rental market. A leasing agreement provides a tenant with possession of the property for a specified term in return for the agreed rental payments.

However, some commercial landlords prefer to offer premises on a licence, which will normally be more flexible and less legally binding. Being a simple contractual agreement, they can also save on solicitor’s fees when it comes to drawing them up.

Licences are frequent in the rental of serviced office space but are also used in other areas of the commercial property market. Their flexibility can be advantageous to business tenants as well as landlords, especially for start-ups or companies in the process of change or expansion that may wish to rent on a temporary basis. Nevertheless, it is important to understand how the terms of a licence could affect your business operations before going ahead.

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Reaching agreed objectives

A commercial landlord’s licence simply provides the tenant with the go-ahead to use the premises for a particular purpose, possibly for a fixed period or on an ongoing basis. It may also include terms about notice of early termination.

The tenant would not normally have a right to renew the licence once it had expired and this is where problems can arise. If the tenant wishes to remain in place but the landlord wishes to retake tenure of the premises, or if the landlord sells the premises with the tenant in occupation, the tenant’s rights could be limited.

A commercial leasing agreement can provide security of tenure for business tenants and the option to take up a new lease when the existing one comes to an end. A landlord’s licence will not offer this surety. It is therefore important that the landlord and tenant have agreed objectives before the deal is struck.

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If a business wants to make changes to a property they are renting, they would need to get permission from the owner of the property. Most owners are interested in increasing the value of their property, so if you go through the correct method to get written permission from them, you will then be able to make the changes you want. Even making a cosmetic upgrade, like installing new light fixtures, can add value to the property.

Offering experience and support

With many years of experience in assisting businesses in moving and relocating to new premises, Glenside can offer invaluable support and advice to clients in dealing with commercial landlord licences. We can help to ensure that a tenancy agreement is reached that will satisfy both parties and avoid any time-consuming and costly disputes for our clients in the future.

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