What is a License Agreement?

In New York, license agreements are sometimes used in order to grant limited rights to use real property. For example, the government may issue hunting and fishing licenses on State land and waterways.  A commercial real estate owner may issue a license allowing a vendor to erect a kiosk in a shopping plaza or a small restaurant to operate in a food court.  The owner of a building may grant a license to allow a neighboring owner to temporarily access the building for construction purposes.  There are many instances in which a license may be used.

Let’s take a step back; what exactly is a license and how does it differ from a lease?

Simply put, a license is a right to use real property for a specified purpose. A license is generally not transferrable and it does not transfer an interest in real property.  A license may also be non-exclusive and limited in time.  In these respects, a license is more circumscribed than a lease, which may be transferrable to a sublessee or assignee, and which transfers a leasehold estate in real property, and which often grants an exclave right to occupy a demised premises for an extended period of time.

While some property owners may grant a license agreement in a simple letter or even a handshake, an owner should always consult an attorney before entering into this type of arrangement. There may be certain unanticipated consequences which an experienced attorney can address.  For example, an insurance and indemnification clause can specify the licensee’s insurance requirements and insulate the licensor from liability in the event of an accident due to no fault of licensor.  A well drafted license agreement should clearly define the rights and obligations of the parties and set forth the basic business terms of the license.

If you have a question about a license agreement in New York, please call our office at (914) 338-8050.

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The Law Offices of Keith R. Betensky, Esq.
The Empire Building
26 Village Green, Suite 4
P.O. Box 22
Bedford, New York 10506-0022
(914) 338-8050

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