Break in Licence

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    Break in Licence


    I'm really confused and new to the notion of licensee/ licensor.

    I've joined an organisation who operate from a commercial building. We share the building with another, similar organisation. I've looked at the licence that was signed before I took over and see that we are the licensee and the other organisation are the licensor. I presume they rent the building from the owner as it does not belong to them.

    I see there is a Licensor's break date which is 18 months from the signing of the licence but there is no Licensee's break date. The licence is for 5 years. Does this mean we have no right to leave the agreement until the 5 years is up or face a penalty of some sort?

    I'm concerned as the language used in the licence gives the other organisation the power to decide how much we pay for repairs and maintenance and we have very little say over costs that they can take on and pass to us.

    Thanks in advance

    There are a number of questions you can ask to determine if an arrangement is a lease or a licence. In a commercial situation the important question is: Whatever the written agreement says, does the occupant have actual exclusive possession? If the answer is "yes" then there is a lease. So, if your arrangement involves your organisation having control over a specified area of a building and from which it can exclude the world including the organisation to which you pay money for the right to occupy, then you probably have a lease.

    If you have a lease and the other organisation exercises the right to break your organisation will have the protection afforded by Part II of the Landlord and Tenant act 1954.

    Without seeing the relevant clause it is not possible to say what your obligations are in respect of contributing to repairs.


      Thanks for this Lawcruncher. I really appreciate you taking the time to reply. We do have an office which we hold the keys for and no-one else is able to use so I guess that we have a lease though the document does state 'licence'.

      My real concern is the language used in the licence. It suggests the licensee can charge us whatever they like if there are any repairs or maintenance needed. I just can't see a date for breaking the licence early for us. I'm not worries about the licensor breaking early - it's just not in their interests and we could very easily manage elsewhere. I just wonder if there is a way we can leave the contract before the 5 years stated on the licence. The licensor can break after 18 months but there is no date for the Licensee to break early


        As I said above, I cannot comment on the repair charges without seeing the relevant clause.

        If there is no break provision for the licensee I do not see how you can bring the arrangement to an end early.


          Thank you Lawcruncher


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