Bare Licence To Occupy Template for Hong Kong

A Bare Licence to Occupy is a legal document governed by Hong Kong law that grants permission to use and occupy a specified space without creating a leasehold interest. This document establishes a personal contractual relationship between the licensor and licensee, providing flexibility in terms of occupation while maintaining the licensor's control over the premises. It includes detailed terms regarding usage rights, fees, duration, termination provisions, and obligations of both parties, while ensuring compliance with Hong Kong's property and contract laws. The agreement is particularly suitable for temporary or flexible occupation arrangements where exclusive possession is not intended.

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What is a Bare Licence To Occupy?

The Bare Licence To Occupy is a versatile legal instrument used in Hong Kong when parties need to establish a flexible arrangement for the occupation of space without creating a landlord-tenant relationship. This document type is particularly relevant in today's dynamic business environment, where traditional long-term leases may not suit all commercial needs. It's commonly used for serviced offices, co-working spaces, temporary business locations, or situations requiring quick deployment of workspace solutions. The document addresses key aspects such as occupation rights, fee structures, duration, and termination rights, while ensuring compliance with Hong Kong's legal framework. Unlike a lease, it provides greater flexibility for the licensor to relocate the licensee or terminate the arrangement, making it ideal for short-term or flexible space requirements. The agreement must be carefully drafted to avoid inadvertently creating a lease and should clearly establish its nature as a licence.

What sections should be included in a Bare Licence To Occupy?

1. Parties: Identification of the Licensor and Licensee with full legal names and addresses

2. Background: Context of the agreement and confirmation that this is intended to be a bare licence, not a lease

3. Definitions: Key terms used throughout the document including 'Premises', 'Licence Period', 'Licence Fee', and 'Permitted Use'

4. Grant of Licence: Express terms of the licence grant, emphasizing its non-exclusive nature and that it creates no estate or interest in the property

5. Licence Period: Duration of the licence, including start and end dates

6. Licence Fee: Amount payable, payment terms, and payment method

7. Licensee's Obligations: Core obligations including compliance with regulations, maintenance, and conduct requirements

8. Licensor's Rights: Rights to enter and inspect, relocate licensee, and maintain the premises

9. Termination: Circumstances under which the licence can be terminated by either party

10. Notices: How formal communications between parties should be made

11. Governing Law: Confirmation that Hong Kong law governs the agreement

What sections are optional to include in a Bare Licence To Occupy?

1. Utilities and Services: Include when licensee has responsibility for any utilities or services

2. Insurance: Include when specific insurance requirements are needed beyond standard building insurance

3. Security Deposit: Include when a security deposit is required

4. Alterations: Include when licensee may need to make minor alterations to the space

5. Sharing and Assignment: Include when there's need to explicitly prohibit or regulate sharing of the space

6. Health and Safety: Include for specific health and safety requirements, particularly relevant for commercial premises

7. COVID-19 Provisions: Include specific provisions related to pandemic measures if still relevant

8. Break Clause: Include when early termination options are required

What schedules should be included in a Bare Licence To Occupy?

1. Schedule 1 - Description of Premises: Detailed description of the licensed area including floor plans and photographs

2. Schedule 2 - Permitted Use: Detailed description of how the premises may be used

3. Schedule 3 - House Rules: Building regulations, access times, and general conduct requirements

4. Schedule 4 - Fee Schedule: Breakdown of licence fee and any additional charges

5. Schedule 5 - Inventory: List of any furniture, equipment or other items included in the licence

6. Schedule 6 - Service Level Agreement: Details of any services provided by the licensor

7. Appendix A - Floor Plan: Detailed floor plan marking out the licensed area

8. Appendix B - Photos: Photographs documenting the condition of the premises at the start of the licence

Is a Bare Licence To Occupy legally binding in Hong Kong?

Yes, a Bare Licence To Occupy is legally binding in Hong Kong when properly executed under the Law Amendment and Reform (Consolidation) Ordinance (Cap. 26). Unlike traditional leases, it creates a licence arrangement rather than a tenancy, giving the licensor greater flexibility to terminate or modify the arrangement. The document must contain essential terms including parties, premises description, duration, and consideration to be enforceable.

Do I need a lawyer to prepare a Bare Licence To Occupy in Hong Kong?

While not legally required, it's highly recommended to engage a Hong Kong solicitor for a Bare Licence To Occupy, especially for commercial arrangements or complex terms. A lawyer ensures compliance with Cap. 26 and Cap. 314 Building Management Ordinance requirements, proper drafting to avoid creating an unintended tenancy, and protection of your interests. For simple residential arrangements, a well-drafted template may suffice with careful review.

How does a Bare Licence To Occupy differ from a tenancy agreement in Hong Kong?

A Bare Licence To Occupy grants permission to use premises without creating landlord-tenant rights under Hong Kong's Landlord and Tenant (Consolidation) Ordinance. The licensee has no exclusive possession, security of tenure, or right to assign, while the licensor retains greater control and can relocate the licensee if specified. Tenancy agreements provide stronger occupancy rights, exclusive possession, and statutory protection that bare licences deliberately avoid.

Authors

Alex Denne

Advisor @ GenieAI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Hong Kong

Publisher

GenieAI

Document Type

Trust Deed

Cost

Free to use

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