Tenant Agreement License

Compare the situation where you pay a monthly fee to reserve a specific parking space on a property near your work. Four features make this agreement look more like a lease than a license: You have (1) exclusive use (2) of a specific property (3) for a certain period of time (4) against payment. There may be situations where commercial property owners can eliminate the traditional landlord-tenant relationship by using licensing agreements instead of leases. However, keep in mind that the presence of all three qualities does not necessarily end the exam. At Northport Marina, the agreement with temporary users probably met all three requirements, but was still classified as a licence. Since the duration was so short and the respective boat licence was issued by the company, two of the three requirements were only weakly present. A license does not always require a written agreement. A license can be granted without the owner and licensee ever meeting. For example, you buy a ticket to a football match. The ticket is a license issued by the stadium owner that allows you to enter the stadium. Although you have never met or negotiated with the owner, you accepted the license when you purchased the ticket. Another factor that is often mentioned but used contradictorily by the courts is the terms used in the agreement. It is obvious that “when determining the actual nature of a contract, the courts will always consider its subject matter and not the name given to it by the parties”.

Wilcox v. Cherry, 123 N.C. 79 (1898). A contract is not a lease simply because the parties mark it as lease. However, as part of its efforts to give effect to the intention of the parties as expressed in a written agreement, a court may consider whether the specific terms used inform the parties` understanding of the agreement, including how it is to be applied. There are a number of important ways in which leases differ from licenses, but the main one is the issue of control. Leases, as agreements, are contracts that exert much less control than licenses over the party making the payments. If you`re entering into a contract where you essentially have the freedom to do what you want on a property, then you`re probably entering into a lease. So if there is no written agreement, you may be dealing with a rental agreement. However, just because a contract contains the details listed above doesn`t mean it`s a default lease agreement. To do this, the main control of what is done on the property must be in the hands of the tenant, not the owner. It should also be noted that a rental agreement cannot be revoked by the owner until the period has expired, as long as no other contractual conditions have been violated.

Licenses, on the other hand, can be revoked at any time. As a general rule, a rental agreement requires a written or verbal agreement between two parties, the landlord and the tenant. The lease gives the tenant the right to use the land or property at will in accordance with the terms of the contract. Initially, simply labeling a contract as a “license agreement” or a “lease” does not mean that. Our courts will review the terms of the agreement to determine whether it is a licence or a lease. Although the distinction is sometimes difficult to discern, the consequences of an error can be significant. For example, if a landlord simply locks in a business that they believe is a licensee, but is actually a tenant, the tenant has potential claims against the landlord for a number of causes of action, including, but not limited to, illegal eviction, trespassing, and breach of contract. Licenses, on the other hand, allow the party accepting payments to have much more control over how their property is used. With respect to the above example, licenses cannot be transferred to third parties because the nature of the agreement is that the licensee controls certain aspects of your conduct on the property; Allowing another party to use the property instead of itself would constitute a violation of this Agreement. For this reason, licensing agreements are mainly used for short-term contracts involving warehouses, offices and small retail spaces. To benefit from a license agreement, the owner must ensure that his agreement with the potential user of the premises is indeed a license and not a lease. This is not necessarily an easy task.

If you simply refer to the Agreement as a “License”, this will not be the case. Whether an agreement is considered a licence rather than a lease depends on the presence or absence of the three essential characteristics of a real estate licence in the contract: (1) a clause that allows the licensor to revoke “at will”; (2) the retention of absolute control on the premises by the licensor; and (3) Licensor shall provide Licensee with all essential services necessary for Licensee`s Authorized Use of the Premises. To understand if you are dealing with a license or a lease, the presentation of the contract is another aspect that can determine the problem. A lease usually requires an oral or written agreement between the two parties involved. Such an agreement should include the following information to be complete: In addition, the Illinois Supreme Court held: “Licenses are normally revocable at the will of the grantor and generally non-transferable.” But once again, the court drew attention to the crucial distinguishing feature of a lease: “the transfer of ownership and control of the property to a tenant for the agreed term.” So what will a court rely on to determine the nature of the relationship between the parties? In general, there is a lease where the owner agrees to transfer exclusive ownership of the property to another for a certain period of time. A license, on the other hand, is an agreement that gives the licensee permission to use the land only at the discretion of the owner. A license is freely revocable and offers no protection to the licensee against interference by the licensor. A lease is an agreement between a landlord and a tenant that gives the tenant an exclusive interest in a property. A license is the owner`s permission to a licensee to do something on the owner`s property. As with all legal issues, the distinction is never easier.

In these circumstances, depending on the nature of the damage detectable by the former licensee, the owner-licensor may consider what is only a possible but uncertain judgment of the triple damage as much less onerous costs of doing business than the sum of all the costs normally associated with a dispute between the landlord and the tenant. Instead of losing income during the self-help dispute, the owner actually makes income from the payments he received from the new licensee of the premises. Owners must also make judgments about the commercial feasibility of acquiring licenses that are willing to accept license agreements with “at will” withdrawal clauses. .