Property Licences

5. Potential Flashpoints

Your contractual and working relationships with your landlord are particularly important in licensed offices.

5.1 If you are going to pay a deposit, both parties should be clear about how it is to be treated.

• When will your money be refunded?
• What deductions is the landlord entitled to make?
• Will you be entitled to interest on the deposit?
• Will the deposit be held separately from the landlord's business funds? What happens if the landlord goes bankrupt?

5.2 Fixed-term contracts with no get-out may mean you lose much of the flexibility associated with renting on licence.

• Beware of any licence with a long fixed term that does not give you an explicit and unconditional right to break off the agreement.
• A few unscrupulous landlords even have trick clauses relating to termination in the agreements they offer. These appear innocuous but have the effect of making your break clause unenforceable - they do this by stipulating that you must have fully performed all the terms of the licence, to the letter, in order to exercise the break.

5.3 A bad landlord, or a well-meaning one who does not keep his or her promises, can lead to all sorts of recurring headaches.

Try to establish whether the landlord is someone you can work with.

• Ask other licensees about the landlord's performance in the past and the standard of the services provided. If other tenants complain that the receptionist is never there or the copier is always broken, take this as a warning.
• Look at the state of the building and form your own opinion about how well it is maintained.