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Licence Tenancy Template for South Africa

A South African Licence Tenancy agreement is a legal document that grants permission to use and occupy property without creating a traditional landlord-tenant relationship. This agreement is governed by South African property law and provides more flexibility than standard lease agreements while offering less security of tenure. It establishes the terms and conditions for temporary occupation, including usage rights, fees, duration, and responsibilities of both parties, while ensuring compliance with South African property regulations, consumer protection laws, and health and safety requirements.

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What is a Licence Tenancy?

The Licence Tenancy agreement is a specialized legal instrument used in South African property law when parties wish to create a more flexible arrangement than a traditional lease. This document is particularly useful for situations requiring temporary occupation rights, such as pop-up stores, shared workspaces, or temporary residential arrangements. The agreement clearly defines the relationship between licensor and licensee, establishing that the arrangement does not create tenancy rights under the Rental Housing Act. It includes essential terms regarding property usage, fees, duration, and termination rights, while ensuring compliance with South African consumer protection laws and property regulations. This type of agreement offers property owners greater control and flexibility while providing licensees with clear terms for temporary occupation.

What sections should be included in a Licence Tenancy?

1. Parties: Identification of the Licensor and Licensee with full legal names and details

2. Background: Context of the agreement and brief description of the property and intended use

3. Definitions: Definitions of key terms used throughout the agreement

4. Grant of License: Specific terms of the license being granted, including scope and limitations

5. Duration: Period of the license, including start and end dates

6. License Fee: Amount payable, payment terms, and review mechanisms

7. Permitted Use: Detailed description of how the property may be used by the licensee

8. Licensee Obligations: Specific responsibilities and duties of the licensee

9. Licensor Obligations: Specific responsibilities and duties of the licensor

10. Property Maintenance: Responsibilities for maintenance and repairs

11. Insurance and Liability: Insurance requirements and allocation of risks

12. Access Rights: Licensor's rights to access the property

13. Termination: Circumstances and procedures for ending the agreement

14. Notices: How formal communications between parties should be made

15. General Provisions: Standard legal clauses including governing law, whole agreement, and variation

What sections are optional to include in a Licence Tenancy?

1. Shared Facilities: Terms for use of common areas or shared facilities, required when the license includes access to shared spaces

2. Security Deposit: Terms regarding deposit payment and return, included when a deposit is required

3. Utilities and Services: Allocation of responsibility for utilities, included when relevant to the property

4. Sub-licensing: Provisions regarding sub-licensing rights, included when sub-licensing might be permitted

5. Operating Hours: Specific times during which the property may be accessed, included for commercial or restricted-access properties

6. Environmental Provisions: Environmental responsibilities and compliance, included for properties with specific environmental concerns

7. Break Clause: Early termination options, included when parties want flexibility to end the agreement early

What schedules should be included in a Licence Tenancy?

1. Property Description: Detailed description of the licensed property including plans and photographs

2. Fee Schedule: Detailed breakdown of license fees, payment dates, and review mechanisms

3. Inventory: List of any furniture, equipment, or fixtures included in the license

4. House Rules: Specific rules and regulations for use of the property

5. Maintenance Schedule: Detailed breakdown of maintenance responsibilities

6. Service Level Agreement: Details of any services provided as part of the license

7. Insurance Requirements: Specific insurance requirements and minimum coverage levels

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

South Africa

Publisher

Genie AI

Document Type

License Agreement

Sector

IP

Cost

Free to use

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