The License Rental Agreement serves as a crucial document in Saudi Arabia's commercial property sector, particularly relevant in the context of the Kingdom's expanding business environment and Vision 2030 economic reforms. This hybrid agreement type combines traditional rental elements with specific licensing provisions, making it essential for businesses requiring both physical space and operational permissions. The document is commonly used when a business needs to not only occupy space but also conduct specific licensed activities within that space, such as retail operations, professional services, or specialized commercial activities. It must comply with Saudi Civil Code, Real Estate General Authority (REGA) regulations, and Sharia principles, while also addressing modern commercial needs. The agreement typically includes comprehensive provisions for property usage, operational requirements, compliance with local regulations, and specific terms for the licensed activities.
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1. Parties: Identification of the Licensor and Licensee with full legal names, commercial registration numbers, and authorized representatives
2. Background: Context of the agreement, including property details and purpose of the license rental
3. Definitions: Key terms used throughout the agreement, including Arabic/English translations where necessary
4. Grant of License: Specific terms of the license granted, including scope and limitations
5. Term and Renewal: Duration of the license agreement and renewal provisions
6. License Fee and Payment Terms: Detailed payment structure, including amounts, payment schedule, and method
7. Permitted Use: Specific activities allowed under the license and any restrictions
8. Licensee Obligations: Responsibilities and duties of the licensee, including maintenance and compliance
9. Licensor Obligations: Responsibilities and duties of the licensor
10. Insurance and Liability: Required insurance coverage and allocation of risks
11. Termination: Circumstances and procedures for early termination
12. Governing Law and Jurisdiction: Confirmation of Saudi law application and dispute resolution procedures
13. Notices: Communication procedures between parties
14. General Provisions: Standard boilerplate clauses including force majeure, severability, and entire agreement
1. Utilities and Services: Details of utility provisions and additional services if included in the license
2. Fit-out Works: Include when the licensee is permitted to make modifications to the premises
3. Security Deposit: Include when a security deposit is required
4. Assignment and Sublicensing: Include when transfer rights need to be addressed
5. Environmental Compliance: Include for properties where environmental regulations are significant
6. Operating Hours: Include for retail or commercial premises with specific operating restrictions
7. Competition Restrictions: Include when there are restrictions on competing businesses
8. Force Majeure: Detailed force majeure provisions beyond standard clause if necessary for high-risk areas
1. Schedule 1 - Property Details: Detailed description of the licensed premises including floor plans and specifications
2. Schedule 2 - License Fee Schedule: Detailed breakdown of fees, payment dates, and escalation provisions
3. Schedule 3 - Permitted Use Details: Specific description of authorized activities and any restrictions
4. Schedule 4 - Service Level Agreement: Details of any services provided as part of the license
5. Schedule 5 - Handover Protocol: Condition report and handover procedures
6. Schedule 6 - Required Approvals: List of necessary governmental and regulatory approvals
7. Appendix A - Form of Bank Guarantee: Standard format for any required bank guarantees
8. Appendix B - Insurance Requirements: Detailed insurance specifications and minimum coverage requirements
Relevant legal definitions
Clauses
Relevant Industries
Retail
Commercial Real Estate
Hospitality
Healthcare
Education
Manufacturing
Logistics
Technology
Financial Services
Professional Services
Entertainment
Food and Beverage
Relevant Teams
Legal
Real Estate
Operations
Facilities Management
Commercial
Compliance
Risk Management
Property Management
Asset Management
Business Development
Administration
Relevant Roles
Real Estate Manager
Property Manager
Commercial Director
Legal Counsel
Compliance Officer
Facilities Manager
Operations Director
Business Development Manager
Contract Administrator
Commercial Lease Manager
Asset Manager
Risk Manager
Chief Operating Officer
General Counsel
Property Development Director
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