Property Licences

1. Licence or Lease?

The difference between a licence and a lease can become blurred. The key practical differences are:

1.1 Licences cover a relatively short period of time - up to two years.

• Leases usually run for many years.

1.2 Most licences give both the landlord and the occupier the right to terminate the agreement (see 5.2).

• Usually this will be done by giving so many weeks' or months' notice. Alternatively, the party wishing to end the agreement may be required to give formal notice on a specified date.
• A notice period of one month is typical.

1.3 You have no right to renew the licence, once the landlord asks you to leave.

• Many landlords prefer to offer licences for this reason.
• In practice, the landlord will not usually want to move you out if you are a good tenant.

1.4 You do not need to spend a lot of money up front.

• Solicitor's fees should be low (typically £200 to £400 plus VAT).
• You will need to pay some rent in advance, but usually only one month.
• You may be asked to pay a deposit. Typically, this will be the equivalent of one month's rent.

1.5 The variety of premises available on a licensed basis is relatively limited, compared with the range of premises that can be leased.

But there are still plenty of small offices, studios and workshop units available on licence in most parts of the country.

• Your local council or Enterprise Agency may maintain a property register which lists both licensed and leased premises.
• Some local authorities and Enterprise Agencies offer easy-in, easy-out licences for small business centres they own. These are sometimes offered at subsidised rates.
• Some private landlords with hard-to-let properties may grant licences for a time, while they are seeking tenants to take on a long lease. Some may offer fully-serviced offices on licence.