Delivering Quality Legal Services since 1996

Delivering Quality Legal Services since 1986

Is it a Licence or Tenancy Agreement? Understanding Your Business Space Occupancy Rights

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When running a small business, determining whether your agreement for a property is a licence or a tenancy can significantly impact both your rights and obligations. 

Below is a simplified guide tailored for business owners who need clarity on their legal stance without the complexities.

Understanding the Difference

Licence Agreement: A licence is typically more flexible but less secure. It allows you to use a property for business without granting exclusive possession. For example, shared office spaces often operate under licence agreements. The key benefit is flexibility; however, the downside is lesser control and stability, as licences can usually be terminated quickly and with shorter notice periods.

Tenancy Agreement: A tenancy agreement gives your business an exclusive right to occupy a specific area, typically making it more suitable for traditional retail or office spaces. This agreement offers more security and stability in terms of tenure but comes with increased responsibilities such as longer commitment terms and maintenance obligations.

Key Factors to Consider

Duration and Exclusivity:

  • Licence: Short term, non-exclusive.
  • Tenancy: Long term, exclusive rights to the space.

Control Over the Space:

  • Licence: Limited control; the licensor can often access the space.
  • Tenancy: Complete control; landlords have limited rights to intervene.

Legal Protection:

  • Licence: Less protection under property law.
  • Tenancy: Strong protection, including statutory rights under the Landlord and Tenant Act.

Termination and Renewal:

  • Licence: Easier to terminate; flexible renewal options.
  • Tenancy: Typically involves strict procedures for termination and statutory renewal rights.

Who Should Be Concerned?

Business owners, particularly those at the burgeoning stage of their business lifecycle, should carefully evaluate these agreements. 

Choosing incorrectly could not only affect your legal standing but also impact your operational capabilities and expansion potential.

Why Trust Matters

At Onyx Solicitors, we believe that transparency and trust form the bedrock of every successful business relationship. 

For over 20 years, our team of experienced business lawyers has guided small business owners through the maze of property agreements ensuring that they make informed decisions that align with their business aspirations.

How we can help

Are you poised to sign a new property agreement and unsure about the implications for your business? Contact us at Onyx Solicitors for a free consultation

Let’s ensure your legal foundations are as robust as your business vision. Reach out via email at or call us directly at 0121 268 3208.

Don’t let legal jargon slow your business’s progress. With the right advice and support, you can focus on what truly matters – growing your business.

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