10 Pages
2495 Words
Introduction: Advice For Homer On Lease And License Contracts For Additional Premises
Homer signed a new contract for supplying the V Engines products for car manufacturers. However, this V Engineer contract is lucrative and can earn potential profitability based on a 3-year, 5-year, or 7-year contract basis. Therefore, Homer needs a premise to supply the V Engines products (Stone & Devenney, 2022). In this situation, the current landlords of Homer offered a unit adjacent to the existing one based on the license or lease contract. Therefore, being a Solicitor this draft will help Homer to identify the most applicable contact form for the newly added adjacent area as contract management.
Discussion Analysis
Before, providing any legal advice to Homer, it is necessary to understand the additional benefits and the disadvantages that will be received by Homer from the Landlord for the unit adjacent to the existing one.
Advice on choosing between lease and license
Based on the “The Landlord and Tenant Act 1954” it is first advised to understand the relevant impact of the adoption of the lease contract or the license contract. Based on the “The Landlord and Tenant Act 1954”, Homer can follow some basic guidance before choosing there licensing contract or the lease contract for an additional unit adjacent area.
Before, proceeding with the legal advice to Homer, it is necessary to understand the distinction between leases and licenses in commercial rents. For example, the case law between “Bruton v London & Quadrant Housing Trust [1999] UKHL 26” highlights the clear distinction between leases. The leaseholders required exclusive possession of the legal tents in commercial properties. The key characteristics are exclusive possession, periodic certain terms, and periodical payment on lease contracts (Lawteacher.net, 2022). The case of “Westminster City Council v Clarke [1992] 2 AC 288” is another famous incident that also identifies the difference between licenses and leases. In this situation, the lord denied the Clarke (C) claim regarding the tenancy in lease agreements. This example identifies the role of a license in a student's legal right in hostel accommodation. The Case of “Prudential Assurance Co Ltd v London Residuary Body [1991]” is another periodic tenancy agreement that also controls between the landlord and the tenant.
Advice on choosing a Lease contract
Homer can adopt the lease contract for the additional premises for new lucrative supply products because, the estimated time for this lucrative contract is estimated for 3, 5, or 7 years basis. In general, the lease is signed for a long-term period from which the benefit from the rental property can be received (Merrill, 2020). In other words, the lease is signed for a specifically identified period of a minimum of 12 months by which one party (Landlord) provides the grants of legal rights for usage of the land or the property. For example, if Homer can sign a lease contract then Homer can receive the freedom for the long-term contracts. The leases can signed a contract for a minimum of one year or ranging between 4-10 years of time period. It is also advised that Homer
Can sign the lease contract with the landlords for the extended additional premises. In the case of the lease, Homer can have the legal rights to use the land or the property for a long-term period which also helps for new contract management of the large car manufacturing of the V Engines products. According to “The Landlord and Tenant Act 1954” there are some different types of commercial lease agreement that also provides both benefits and disadvantages to Homer. For example, if the landlord signed the Gross or Net lease contract with Homer, then Homer has to pay the maintenance taxes, property taxes along monthly rental charges. So, it is advised to Homer, to identify those legal terminologies and consult with a solicitor for the contract agreement for the additional premises. However, there are also some disadvantages of the lease contract. In the case of the lease agreement, Homer has to bear the responsibilities of property maintenance, which is different from the license agreements.
Advise on choosing the License contract
The license contract is slightly different from the lease contract. There exist some basic differences between these two legal contract management. On the other hand, the licenses can be based on a short-term period. Therefore, based on the “The Landlord and Tenant Act 1954” Homer can also go for the license contract. But in that situation, the contract will have to be signed for the short-term period (Jordan, 2020). But Homer's newly assigned contract is planned for the long-term period of 3, 5, or 7 years from where Hamer can earn a lucrative share. In that case, Homer needs to renew the license contract on a 3, 5, or 7-year basis.
Based on the “The Landlord and Tenant Act 1954” it is advised to Homer that Homer can adopt the commercial license contract. Because the commercial license is also a similar type to the lease contract that may be taken by Homer. In that case, Homer can have to pay the rental charges to the landlords on a monthly rental basis (Combe & Robson, 2021). However, Homer has to face some weaker rights from the commercial additional property area. However, Homer cannot get any exclusive possession from the license agreement with the landlords.
However, the license will give legal permission to Homer to use the unit adjacent property for contractual purposes. Using the licensing, Homer will have the personal rights and permissions to do something in the unit's adjacent area.
Therefore, using the Lease contract, Homer can get additional benefits for a particular period of time. Since the V engineering products can earn a lucrative profit of 3 years, 5 years, or 7 years basis, therefore, Homer can get stability from the lease agreements. Therefore, if Homer needs any security guarantee from the unit's adjacent rental area then Homer can go for the lease agreement (Brown & Pawlowski, 2022). The lease agreement also provides the legal rights to Homer with exclusive interest and tenant rights from the unit's adjacent rental space. However, if Homer goes for the licensing, then Homer can get the only legal permission to do something to the landlord's unit adjacent property.
Now, based on Homer's requirement Homer can go either for lease or license. The new contract has an opportunity for earning potential profitability from V Engines market products. Therefore, it might give future stability and potentially profitable outcomes from the V Engines products either after a 3, 5, or 7-year contract. Therefore, Homer can go for a Lease contract if Homer can take care of the legal consequences from the landlords.
The basic terms need to be from the Landlord
Homer has the opportunity of contracting between licensing and lease. In the case of the lease contract, Homer can get the legal right to use the unit property from the Landlords for commercial selling purposes of V Engines products (Brown & Pawlowski, 2022). Based on this commercial lease agreement, Homer will also acquire some extra terms and conditions from the Landlord for which Homer needs to fulfill these additional terms and conditions. Based on the “The Landlord and Tenant Act 1954” can give the commercial lease effects faced by Homer from an additional unit adjacent area.
There are three types of lease agreements gross lease, net lease, percentage lease, etc.
Gross lease
The Gross lease is also one type of commercial lease that can be signed between Homer and the Landlord for which the landlords can charge an exclusive single rental charge each month (Londonofficespace.com, 2022). If the landlord provides the gross lease to Homer, then Homer has to pay the insurance costs and property taxes. This also provides predictable rental expenses. The landlords can also charge rental charges for building expenses, janitorial services, property insurance, and utility expenses.
Net lease
Homer can also sign the net lease agreement with the landlords for the unit adjacent area. Therefore, if the landlords can also offer a net lease to Homer then Homer has responsibility for the payment of insurance, and property taxes along with maintenance costs for monthly rental purposes. Homer can also have the advantage of controlling the budget costs by which Homer can get the advantages of additional retail management.
Percentage lease
Homer can also deal a contract of percentage lease with the landlords for which Homer has to pay a percentage of profit shares in addition to rental rate charges. The landlord might emphasize to contract of a percentage lease. Because there exist chances of getting a lucrative share from new V engines supply products based on a 3, 7, or 9-year basis. In that case, the Landlord can charge a percentage share amount from the lucrative share along with the monthly rental charges. However, this percentage of leases consists of a potential risk for rental payments.
Therefore based on the above lease agreement, Homer can expect some basic terms related to contract durability, maintenance costs, insurance costs, property taxes, etc. along with the rental charges of the unit adjacent area.
Homer can also go for the licensing agreement with the landlords for the unit adjacent property area. The licensing will provide some specific purpose for the alternation of the unit adjacent area for new supply management. From the licensing contract, the landlords can expect some basic terms for the additional premises for lucrative properties. There also might be the chances of entering the landlords in the business premises of new products for the large car manufactures (Ti, 2022). For which the homer might have to face some legal consequences of trespasser challenges. Again the landlord might disagree with renewing the legal contract after the first period of agreement. In that case, Homer might have to face some challenges in finding new additional premises. In the case of choosing the licensing over leases, the landlord also has the power to revoke Homer by giving the fewer rights. The landlord can also include some basic terms related to the rental contract, time period, property premises, etc.
Advice on relevant statutes for Homer
Homer has the advantage of earning a lucrative profit from new contracts of car manufacturer products of V Engineering products. However, Homer does not mention the future expectations from the lucrative property. Therefore, it is first advised to identify the key objective of Homer from the additional premises for the new contract (Orr et al. 2023). If Homer wants to extend the additional extension from the new product contract, then Homer can adopt the lease. Based on “The Landlord and Tenant Act 1954” Homer can make a binding contract with the landlord. Homer can also get the tenant rights from the additional premises and earn a lucrative profit on a long-term basis. However, it is also advised to choose between a Gross lease and net lease based on the landlord's contract. So that the landlord cannot charge any additional property tax, maintenance cost, or other additional cost. However, if Homer can adopt the license contract then, Homer has to renew the contract with the landlords after the ending of the 3-year contract, 5-year contract, and 7-year contract. Homer can apply the “Rent Act, 1977” to protect the legal rights from the lease or the license from the additional unit premises. Based on this Act Homer can protect the tenancy rights even after the contractual agreements.
Conclusion
Analyzing the legal context based on “The Landlord and Tenant Act 1954” it is found that Homer has both the advantages of adopting the Lease contract and the license contract based on future expectations from the additional premises. Being a solicitor, it is also advised Homer mention which types of rental charges like property taxes, and maintenance charges will Homer paid to the Landlord as a contract agreement. Before proceeding with the legal contract for lease or license Homer should consult with a solicitor to cross-check the legal obligations. Therefore, the above section mentioned the difference between choosing the license contract or the lease contract.
Reference list
Book
- Stone, R., & Devenney, J. (2022). The modern law of contract. Routledge. Retrieve from https://www.taylorfrancis.com/books/mono/10.4324/9781003143277/modern-law-contract-richard-stone-james-devenney [Retrieve on: 06.02.2024]
Journals
- Bevan, C. (2023). Property Guardianship: The New Battleground for the Lease/Licence Distinction in English Property Law. Hart Publishing. Retrieve from https://durham-repository.worktribe.com/output/1648691 [Retrieve on: 06.02.2024]
- Brown, J., & Pawlowski, M. (2022). Avoiding business protection under Part II by default. Landlord and Tenant Review, 26(1), 10-13. Retrieve from http://gala.gre.ac.uk/id/eprint/35069/ [Retrieve on: 06.02.2024]
- Combe, M. M., & Robson, P. (2021). A review of the first wrongful-termination orders made under the Private Housing (Tenancies)(Scotland) Act 2016: do they sufficiently protect those misled into giving up a tenancy?. Juridical Review, 88-102. Retrieve from https://strathprints.strath.ac.uk/76675/ [Retrieve on: 06.02.2024]
- Combe, M. M., & Robson, P. (2021). A review of the first wrongful-termination orders made under the Private Housing (Tenancies)(Scotland) Act 2016: do they sufficiently protect those misled into giving up a tenancy?. Juridical Review, 88-102. Retrieve from https://strathprints.strath.ac.uk/76675/ [Retrieve on: 06.02.2024]
- Jordan, M. G. (2020). Elements of residential security in comparative focus: Renting homes in Great Britain and Ireland (Doctoral dissertation, University of Southampton). Retrieve from: https://eprints.soton.ac.uk/448284/ [Retrieve on: 06.02.2024]
- Merrill, T. W. (2020). The economics of leasing. Journal of Legal Analysis, 12, 221-272. Retrieve from https://academic.oup.com/jla/article-abstract/doi/10.1093/jla/laaa003/5904227 [Retrieve on: 06.02.2024]
- Orr, A. M., Gardner, A., Jackson, C., & White, J. T. (2023). Changing tenant covenant perceptions and flexibility in the lease model in UK city centres. Journal of Property Research, 40(1), 1-24. Retrieve from https://www.tandfonline.com/doi/abs/10.1080/09599916.2022.2057866 [Retrieve on: 06.02.2024]
- Western, J. D. (2023). Business leases and energy efficiency: improvements, dilapidations, implied terms and lease renewals (Doctoral dissertation). Retrieve from https://keele-repository.worktribe.com/output/518078 [Retrieve on: 06.02.2024]
Articles
- Ti, E. S. (2022). Of landlords and tenants: Property in the midst of a pandemic. Statute Law Review, 43(3), 284-303. Retrieve from: https://academic.oup.com/slr/article-abstract/43/3/284/6312029 [Retrieve on: 06.02.2024]
