When a third party is using, or wishes to use or occupy your property, it is very important that you enter into an agreement that protects you, your interests and your property. Three types of agreements are typically used for such purposes: “Use Agreements”, “License Agreements” and “Leases”. They are all different, each protect and convey different rights.
A use agreement is a contract most often used when someone wants to temporarily access or use your property. For example, if you live in the Los Angeles area and a film company asks to use your land for a short period (30 days or less) in connection with their film project, you should require them to enter into a use agreement- even if they just want to park or stage equipment on your land. A strong use agreement should include insurance and indemnification provisions and have a clear end date.
A license agreement grants the “licensee” certain rights to use, but conveys no interest in, the property. A typical example is a parking license. Because a license doesn’t grant an interest in the property, it can be terminated at any time, cannot be transferred to a third party (such as a sublessee), and is not subject to statutory leasing formalities to terminate. Further, a license need not be “exclusive” in its use, meaning the licensee and other parties, including the property owner, may use the property.
A lease is an actual right and interest in the property which grants the lessee exclusive legal rights in and to use and occupy the property. In California, there are statutory limitations on termination of a Lease, and extensive statutory protections for tenants. Typically, a lease is most appropriate when the term will be longer than 30 days and it is intended that the lessee will have exclusive possession and use of the property.
A lease can be inferred to exist, even if no written agreement exists. The key test is whether the property owner gave the third party an exclusive right or control of their property. If so, then a lease exists. Accordingly, is important to make sure that if you permit anyone to use your property (or you know someone is using your land) that you have a written license or use agreement. A strong license or use agreement can limit a property owner’s risk, dictate use and maintenance, and protect your property and property rights.
If you need a use agreement or a license agreement, contact Furton Legal, or purchase our California Parking License Agreement here. If you need a lease, contact Furton Legal, or purchase one here.