To Lease or to License…
In the United Arab Emirates, there are stringent requirements
for leasing… if only there was another way.
There are two concepts which many jurisdictions recognize, a
lease and a license. One of these concepts is formal in nature,
while the other offers flexibility and an alternate solution to
being tied into a lease agreement. It is an informal agreement
purported to be beneficial for all parties involved.
In its simplest form, the difference between a lease and a
license is as follows; a lease is the granting of a legal interest
in land which gives exclusive possession for a fixed period of
time. A lease arises when a landlord grants a tenant such a legal
right in return for the payment of a rental amount. A license
arises when a licensor grants a licensee a contractual right to
occupy premises in return for the payment of a license fee. In law,
a licensee is not entitled to exclusive possession of the
premises.
