Chennai

If there are many licensees (unrelated as opposed to a family, where it is an accepted practice for one member to sign) seeking to take a premise on license basis, these are things to remember:

It is advisable to sign the leave and license agreement since it will guarantee equal protection/recognition as licensees;

Licensees need to ensure that the agreement explicitly records split of license fee payable and also respective obligations towards his/her share of the aggregate license fee. However, all licensees will be responsible for total fee;

Licensees should insert a provision (in case one of them wishes to exit), wherein the entire leave and license agreement need not terminate, but can have the remaining licensees take over exiting licensee’s obligations – with consent of the licensor;

If the licensee is going to incur expenses in furnishing the premises, add a clause that ensures licensor will have to repay such money (albeit on a depreciable value basis) spent in case of premature termination of agreement;

Licensee should reserve right to retain possession of premises, free of rent, if upon termination of term or agreement, the licensor fails/refuses to return security deposit;

Licensee should insist on adding a clause protecting and recognising permissive use of licensed premises by the licensee for duration of the term, even if the licensor sells/mortgages etc, the licensed premises.

Source Malav Virani, Times Property, The Times of India, Chennai