Licence Agreement

[Jagger]

Hi All

I own a small office which I let out on a six month Licence. The agreement is now coming to an end and the current Tenant wishes to stay under a new six month Licence. Are there any Legal disadvantages in renewing Licence agreements under the Landlord and Tenant Acts, etc or should I be looking to switch to a Lease Agreement. I am quite happy with a six month agreement in principle.

[Paul_f]

If the tenant has exclusive use of the office they probably have a lease no matter what you think you have created.

If they have a separate entrance then this only substantiates the above fact. If they have to come through your office to get to their office then you might be able to get away with a license but ahve my doubts.

A bit more information might be useful.

[Jagger]

Thank you for your reply Paul.

The office is used solely by my Tenant, it is a self contained unit and they have their own door and all their own facilities. I work from an office in a completely different part of the Country.

Do you think I am treading on dangerous ground then, using just what is termed a 'Licence'. It is a six page document which appears to cover all matters in simple English as to what they should and should not do and what they are and are not responsible for.

I assume from your reply that you consider a Licence is really only suitable if the Landlord occupies the main building area and sub-lets part of it out. Do you consider that I should get a Lease agreement in place anyway?.

I did not apppreaciate that this was any sort of problem when I posted my query. What I was concerened about initially was whether my Tenant would benefit from additional Legal protection, which could be to my disadvantage, if they were permitted to remain at the property for too long.

[daveyjp]

It appears the tenant has a lease regardless of what any piece of paper may say. If they have exclusive access, pay rent on a regular basis and the 'licence' is for a fixed term (which it must be if you are saying it's for six months and coming to an end) this would probably be seen by any Court as a lease and not a licence. If you are happy with a six month term you need to let the unit on a six monthly periodic tenacy agreement. This in effect runs forever until ended by either party serving six months notice.

[Jagger]

Thank you for your responses.

Looks as though I need to get the agreement changed.

[Paul_f]

Before you dig yourself any deeper here, you cannot alter the terms you have agreed with your tenant (because that's what he in fact is) so it must follow the wording of the license you created. Your tenant can refuse to sign a new doucment and it would be remiss of you not to inform him of this in writing, otherwise it would probably not stand up in court.

You also have another problem in that you have grantes security of tenure under the Landlord & Tenant Act 1954 which you could easily have avoided by taking proper advice, or even by just looking at the British Property Federation website (www.bpf.org.uk) which has a free downloadable and amendable, extremely comprehensive short-term lease, with all the notices you would need to have served to keep it out of the 1954 Act. Unfortunately it's too late on this occasion.

Never ever try and draw up a legal document if you ain't a legal person or don't have considerable expertise in knowing how to!

[Jagger]

Point taken Paul and obviously it is sound advice.

Fortuneatly for me in this instance I do not envisage any problems as both parties are 'reasonable and fair people'. (I realise these could be my famous last words).

I will seek the required further professional advice to get the matter sorted.