Leases licences and tenancies

This information only applies in England and Wales.
If you are renting out your commercial property, you must consider the different letting documents available so that the appropriate rights are given to the tenant without losing control of the property.
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When you rent out a commercial property you must decide what you want to do and what you will allow the tenant to do so that you can consider which letting document is most appropriate.

It is important to use the correct document so that the tenant does not obtain rights in the property and so that you can easily remove the tenant if they do not pay the rent or breach any obligations in the agreement.

If the wrong type of document is used a tenant may obtain rights to remain at the property.

A commercial lease is a right to exclusive possession of the property for a certain period of time. Exclusive possession means that the tenant can use the property and exclude the landlord and others from the property.

A lease is a contractual relationship between the landlord and the tenant.

A lease may be used to let a commercial property to a tenant for a set number of years. Read Entering a commercial lease for guidance if you are considering signing a commercial lease for your business premises as a tenant.

A licence is a permission for a licensee to do something on the owner’s property. A licence is a personal right or permission to the property.

The licensee does not keep the property and the owner can get the property back if required.

A licence may be appropriate for a short term letting of a commercial property (such as Rocket Lawyer’s Office sharing agreement) or renting a car parking space (such as Rocket Lawyer’s Car parking licence).

A tenancy at will is an arrangement where occupation by the tenant can be ended by either the landlord or the tenant at any time. 

A tenancy at will is usually only appropriate when the terms of a lease are being agreed and the tenant needs access to the building before completion.

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