This agreement is part of the Tenancy Builder.
This is a Licence Agreement for the letting of non-domestic premises. It is intended for situations where a room or space is being made available for personal or ancillary use, rather than as a dwelling or for running a business.
The agreement is closely aligned to our garage agreement, but is more flexible in terms of permitted use. It is suitable where the occupier needs access to a room or space on a licence basis, without exclusive possession and without the protections that apply to residential tenancies or formal business leases. In Tenancy Builder, you can specify the premises' intended use before creating the agreement.
Typical suitable uses include:
- a hobby or interest room (for example, art, crafts, music practice or model-making);
- a private studio or creative space used personally rather than commercially;
- a staff break room or rest area linked to off-site employment;
- a meeting or club room for non-commercial groups;
- storage associated with personal use rather than trade;
- use of an address for correspondence or administration only, where no business is operated from the premises.
Important limitations
- The premises must not be used as living or sleeping accommodation.
- The premises must not be used to carry on a business, trade or profession.
- The agreement is a licence, not a tenancy, and is drafted on that basis.
If the occupier intends to run a business from the premises, operate it as an office, receive customers, or otherwise occupy it for commercial purposes, this agreement is not suitable. In those cases, a formal business lease (often within the scope of the Landlord and Tenant Act 1954) will usually be required instead.
If you are unsure whether a particular use is personal or business in nature, it is important to assess this carefully before choosing the agreement.
