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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25690
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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A small charity wishes to use a local business's spare office

Customer Question

A small charity wishes to use a local business's spare office space but the trustees are wary about creating any long term obligation, and certainly do not want to create a tenancy or other interest in property. The answer seems to be a Licence to Occupy. The hosting bsiness is amenable to any such arrangement - we want it to be a bit like a business incubation centre might operate. Below is the proposed wording, would you be able to comment on the validity of this and also on any risks to the charity or trustee. Thank you.
Licence to Occupy
LICENSOR: xxxx, xxxx St, Rugby
LICENSEE: xxxxx, Rugby, CV21 9PA
PREMISES: Exclusive use of first floor office (internal left) x St, Rugby
AGREEMENT DATE: 01 May 2015
The Licensee agrees to occupy the premises on the following terms and conditions:
1. The Licensee shall occupy the as Licensee from 01 May 2015 until 30 Oct 2015 (“the Licence Period”) and in addition the Licensor will permit the Licensee to use the shared meeting space, access routes, kitchens and toilets of the Building (“the Common Parts”). The Premises are unfurnished and unequipped.
2. In consideration of the Licensee occupying the Premises it will pay to the Licensor the sum of £100 by standing order per month (“the Licence Fee”) on the first of each month for that month. If the Licence Fee is not paid the Licensor reserves the right to serve a notice for non-payment of rent on the Licensee.
3. In Consideration of the Licensee paying the Licence Fee the Licensor shall meet all outgoings in relation to the heating, lighting, electricity, business rates and buildings insurance in respect of the Premises. The Licensor will use part of the Licence Fee to pay business rates upon the premises on behalf of the Licencee and so long as the Licence Fee is paid in a timely manner the Licensor will continue to do so.
4. The Licensee shall pay all costs relating to the operation of its business in particular but not restricted to telephone and broadband connections.
5. If the Licencee continues to occupy the Premises after the end of the Licence Period without signing a new Licence agreement then the parties will be considered to be holding over under the terms of this Licence,
6. The Licensee acknowledges that this Licence is granted as Licensees only and that this Licence does not in any way grant a Tenancy for the purposes of the Landlord Tenant Act 1954 or otherwise.
7. The Licensee shall take reasonable care of the interior of the Premises including fixtures and fittings therein and shall keep the same in a good and clean and tidy condition and replace all broken glass and make good any damage caused by the Licensee or its employees or visitors, fair wear and tear excepted.
8. The Licensee shall occupy the Premises solely as offices in connection with its business and it will not carry on at the Premises any other activity or anything which may cause a nuisance or annoyance to the Licensor and will not do anything which may invalidate any insurance policy on the Premises.
9. The Licensee shall not make any alterations or attach any fixtures or fittings without the Licensor’s consent
10. The Licensee shall comply with all reasonable regulations and conditions that the Licensor may impose relating to the use of the Premises and the parts of the Building which the Licensee is permitted to use as aforesaid and also all regulations and conditions imposed by the insurance company or the fire authorities.
11. The Licensee shall not store anything or leave any rubbish or furniture within the Common Parts.
12. This Licence may be terminated by either party giving 1 calendar month notice to the other party. In the event that the Licensee terminates this Licence prior to the expiry of the Licence Period the Licencee shall pay to the Licensor a sum equal to the total Licence Fee for the Licence Period. Keys must be returned to the Licensor within three working days of the expiry of the term or expiry of notice period.
13. In the event that the Licensee breaches any of the terms and conditions herein the Licensor may terminate this Licence immediately without prejudice.
Signed by the Licensor
Date
Signed On behalf of the Licensee
Name/Position
Date
** END **
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience. May I ask will the charity have sole occupation of the unit or space they intend to occupy please?
Customer: replied 2 years ago.

Hi Joshua, Yes, sole us of the office described as "The Premises". Shared use of domestic facilities. Shared use of what will be a meeting area (currently storage space). Shared entrance door. The business is question runs a workshop, this is office space above.

Expert:  Joshua replied 2 years ago.
Thank you. The licence as drafted is (and I hope you will forgive this comment) rather crude and I assume has not been drafted by a lawyer but rather is an layperson attempt. From the charities point of view providing the rent and the extent of use of facilities etc is acceptable and the term is what is envisaged this does not much matter as there is no particular issue for the charity providing the above is correct.However from the landlords point of view this is likely to be very ppor drafting. This is because the "licence" grants exclusive use of part of the building. This may create a lease in favour of the charity with security of tenure to renew at the end of the term. This is becuase the law ignores what an agreement is labels itself as but rather looks at the content of the agreement. A licence that grants exclusive use of a premises for business purposes is not a licence but rather can be interpreted as a business lease with the above implications. The charity is not tied into it because there is a provision which allows 1 month notice to be served but the landlord could be.As above from the perspective of the charity subject to the above provisos the agreements seems satisfactory however from the landlords point of view he would be very ill advised to grant such an arrangement or he may find that he cannot remove the charity from occupation against their will providing they pay rent on time.If either party wishes me to prepare a licence that actually takes effect as a licence I would be happy to do so - this is likely cost around £150 or thereabouts. I hope the above is of assistance? If you have no further questions for now I should be very grateful if you would kindly take a moment to click to rate my service to you today or just reply back to let me know if the above is helpful. Your feedback is important to me. If there is anything else I can help with please reply back to me.
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Customer: replied 2 years ago.

Thank you. I'll come back to you possibly about preparing a better worded document. This was lifted from a business incubation agreement.

Customer: replied 2 years ago.

Thank you, ***** ***** is now resolved and your help was very valuable. David

Expert:  Joshua replied 2 years ago.
I am glad you have resolved the matter successfully. Best wishes