Keeping all the different agreements and contracts present in the real estate world can be difficult, especially since many of them seem to do similar things to other existing contracts. A real estate license agreement is used by a landowner seeking to license a piece of land to another party for use. Such examples would be a university that licenses a business to build a commercial space or a company to rent a commercial space for a specified period of time. A university could also use a license agreement to rent land or buildings to a fraternity or any other outside party. Let’s take a look at one of these real estate license agreements and see how they work.
Compared to other forms and real estate agreements, a real estate license agreement is typically about ten pages long and is considered a fairly lengthy legal document. Like most contracts, a real estate license agreement begins with defining the parties involved in the legal contract and the address of the property that is being licensed. This section will be followed by several definitions of “consideration” that state who owns what, who is in what position relative to others, and any other legal jargon that needs to be cleared up for the rest of the contract to make sense.
In the next section, the licensing group will describe everything they expect from the tenant in terms of what they can do with the property, how they can use it, what the limitations are, and what happens if they violate the terms of the rental. While we deal with real estate licensing agreements, you may find similar agreements if you are a sports fan looking to purchase season tickets, as many sports teams now use personal seat licenses or licenses for the rental of suites in arenas and stadiums.
The rule sections of most real estate licensing agreements begin by defining the term of the lease and then go on to officially declare that the current tenant is giving control of the property to the tenant. The following sections tend to be lengthy and are very important to the essence of the contract. The rental party will explain to you all the rules and regulations that you must adhere to during your license agreement. Most are common sense, but some companies have become notorious for inserting unreasonable clauses into the rules section that, if signed, are legally binding.
The next part of the contract talks about the external party’s responsibilities for repairs and maintenance, while the next section talks about the rights of the owner party when it comes to visiting the property and inspecting it.
Every real estate license agreement has a clause or two about new additions or changes that the lessee can also make to the property.
As you can see, the average real estate license agreement can be a bit complicated, so if you are unfamiliar with how it works, get a few tips before putting your pencil on paper.
