License Agreements For Use Of Real Property: An Alternative To Easements
There are many possible interests in real estate. “Fee simple” is the most easily understood, which means ownership of the land itself. Easements are the right to use land owned by someone else for specified purposes. Generally, easements are perpetual and run with the land, meaning that they go on indefinitely and transfer to new owners with property is conveyed. Because of this long-term impact on property, parties to an easement typically record the easement with the county recorder to give notice to subsequent interest holders that property is subject to an easement. Some owners are reluctant to grant an easement for various reasons- they may not want the permanency typically associated with an easement; they may worry that a new neighbor or purchaser of the benefitted property will bring an entirely different dynamic to a longstanding relationship; they may want to reserve opportunities for future use unencumbered by an easement, such as building new structures or subdividing their property. In many instances, it is possible to avoid granting an easement but still meet the parties’ temporary objectives by entering into a license agreement for one person’s use of another’s property.
A license agreement grants a conditional right to use another’s property. Instead of attaching to the land, the license agreement is typically binding only on the parties to the agreement. The party granting the license (licensor) grants to another party (licensee) a right to use property without obtaining any permanent rights. Licensing agreements are normally personal to the licensee, meaning that when drafted properly, the licensor does not have to worry that the licensee will transfer their rights to someone else who flouts the terms or intent of the agreement and causes heartache to the licensor. License agreements also typically contain termination provisions which allow the licensor to terminate the license with a certain amount of notice to the licensee under certain conditions. Because of their flexibility, license agreements are a useful and attractive tool for landowners to accommodate other parties without granting an interest in the land itself.
The lawyers at Beresford Booth have a wealth of experience in real estate transactions, including the drafting and enforcement of license agreements. We would be happy to assist you with your real estate needs.