Land tax is no longer apportionable (in most cases)January 2, 2024
A Licence Agreement is a supplement to the sale of land contract that allows one of two things:
- The purchaser(s) to occupy the property for a period before settlement.
- The vendor(s) to occupy the property for a defined period after settlement.
In addition to having to pay the licensor an agreed licence fee, the Licence Agreement usually requires the occupying party (the licensee) to pay the rates for the property accrued during their period of occupation, and keep it properly insured. The licensee is also obligated to keep the property in the same condition and state of repair that it was when the occupancy commenced, they cannot make additions or alterations to the property without written permission from the licensor and they are responsible for any damage caused during their period of occupation. In other words, the licensee is expected to behave as if they were a tenant, but without the usual protections of tenancy legislation.
The licensor (the property owner) is entitled to inspect the property at any reasonable time.
In the case of a vendor occupation, the Licence Agreement may require a security bond to be withheld from the sale proceeds at settlement for the period of occupation, this would be refunded to the vendor when the occupation is ended, less any amounts payable by the vendor for a breach of the Agreement.
For more information about licence agreements, please contact Glenferrie Conveyancing in Northcote on 03 9815 2351.