Commercial property licence

About this document

This short agreement grants a licence to occupy rooms or space for business use.

The licensor may be the owner of the premises or a tenant (with permission to sublet) who wishes to let an unused area of the building.

That it doesn't create a lease will be the most important feature for most users. A lease creates an interest in land and gives the tenant additional rights - particularly with respect to a right to stay in the premises when the lease term expires (known as security of tenure). A licence agreement does not give the licensee the same rights to stay.

The other significant difference between this agreement and a lease is that rent is not controlled, that is to say that with a licence, the licence fee can be increased at any time (although it would be prudent to give reasonable notice) and without the licensee having rights to challenge increases.

This agreement includes minimal and usual provisions in simple format, specifically to avoid it being interpreted as a lease under the Landlord & Tenant Act 1954. What is excluded is as critical as to what has been included.

The document might be used to:

• let spare office rooms, unused workshops or warehouse space to another business
• bring in another trader on a shop floor
• let office space on a short term, flexible basis, for example as an 'incubator' area for start-up businesses
• let a parcel of spare land to another business to store vehicles or machinery

Importantly, this template licence to occupy commercial premises does not contain provisions that might suggest that the arrangement is is lease, giving security of tenure. In particular, it does not:

• grant exclusive possession of the premises
• provide for a fixed term
• reserve any rent

Alternative documents

If you need a lease rather than a licence to occupy, we have a large collection of lease templates for all types of business property.

This document is not suitable for letting residential property. For that, see our standard residential property licence agreement.

Contents

• Property details
• Licence fee
• Licence fee inclusions
• Payment provisions: all payments the licensee might have to make including service charges
• Use allowed: restrictions on how the occupier can use the property
• Positive and restrictive covenants on what the licensee may and may not do