Real Property License Agreement Form

03 Oct Real Property License Agreement Form

In 2015, Apple Inc. and telecommunications equipment maker Ericsson agreed on a comprehensive licensing agreement that ended a one-year patent dispute between the companies. A few years ago, I met one of the legends of New York real estate and the General Counsel of his company. He worried about the eviction process from New York City – the loss of rental income, wasted attorneys` fees, and the incredible time-consuming between a tenant`s failure and an actual evacuation. As explained in Friedman On Leases, the difference between a lease agreement and a license is as follows: a license agreement is an advantageous legal document between two parties – the licensor or the person holding the intellectual property (IP) and the licensee or person who obtains a license to use the IP. The licensor may own a copyright, trademark, patent, service mark, trade secret, know-how or other IP. At present, real estate licensing agreements seem to be used primarily by owners of licensed real estate to short-term users: offices, laundry rooms, certain types of storage space, and kiosks in shopping malls. It is clear that there is a market for such agreements. Whether there is a market for real estate licensing agreements for other types of occupation may not be so obvious, but given the need to be exempted from the burdens and frustrations of traditional landlord-tenant disputes, such an agreement can be useful for the right business plan. To obtain the benefit of a license agreement, the owner must ensure that his agreement with the potential user of the premises is indeed a license and not a lease. This is not necessarily an easy task. Simply designating the agreement as a “license” will not. Whether an agreement is considered a licence and not a lease depends on the existence or absence of the three essential features of a real estate licence in the agreement: (1) a clause allowing the licensor to revoke “after being defenced”; (2) the maintenance of absolute control of the premises by the licensor; and (3) the licensor shall make available to the licensee all essential services necessary for the licensee`s authorized use of the premises.

One of the main rights of the licensor in a license agreement is the right to revoke the license “as he pleases” and use “mutual assistance” to remove a defaulting licensee from the licensed premises without having to endure months or years of long and frustrating litigation to recover possession of valuable real estate. The courts have found that licences are leases for which one or more of these characteristics are either totally absent from the agreement or insufficiently transferred to the competences retained by the licensor. However, the less control is granted to the licensee, the more likely it is that the agreement will be a licence, given that a licence does not offer autonomy, but simply allows a party to “provide services within an undertaking that is on premises or operated by another that has the power to supervise the type of provision of the services”. However, it has been found that the licensee`s continued control over the prices calculated by the licensee, the periods of operation within the licensed space and even the choice of the licensee`s staff is not a guarantee that the contract is considered a license and not a lease, since such controls can no longer be considered “reasonable by a meticulous owner vis-à-vis a licensee for [ any]. Business would be required.” It is therefore necessary to carefully draw up appropriate licensing agreements and, to this end, close cooperation must be established between lawyers and their clients wishing to establish a licensing regime. . . .