The Lease and License Agreement is a specialized legal instrument used in Saudi Arabia when a business requires both physical premises and operational permissions. This document is particularly relevant for commercial enterprises establishing operations in Saudi Arabia, whether in retail, office, or industrial spaces. It combines traditional lease elements with specific licensing provisions, ensuring compliance with Saudi real estate laws, municipal regulations, and commercial licensing requirements. The agreement must be registered in the Ejar system and conform to Sharia principles, making it distinct from conventional lease agreements in other jurisdictions. It's commonly used in commercial complexes, shopping centers, and industrial zones where businesses need both space and operational permits.
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1. Parties: Identification of the Lessor/Licensor and Lessee/Licensee with full legal names and details as required under Saudi law
2. Background: Context of the agreement including property ownership confirmation and licensing authority
3. Definitions: Key terms used throughout the agreement including Property, Permitted Use, License, Lease Term, and other relevant definitions
4. Grant of Lease: Specific terms of the lease grant including property details and term duration
5. Grant of License: Terms of the license grant including scope and limitations of permitted activities
6. Rent and License Fees: Payment terms, amounts, frequencies, and methods for both lease and license components
7. Security Deposit: Details of security deposit amount, maintenance, and conditions for return
8. Use of Property: Permitted and prohibited uses of the property under both lease and license
9. Maintenance and Repairs: Responsibilities of each party for property maintenance and repairs
10. Utilities and Services: Responsibility for utility connections, payments, and related services
11. Insurance: Required insurance coverage for property, activities, and third-party liability
12. Compliance with Laws: Obligations to comply with Saudi laws, regulations, and Sharia principles
13. Assignment and Subletting: Restrictions and conditions for assignment or subletting of lease or license rights
14. Termination: Grounds and procedures for termination of the agreement
15. Governing Law and Dispute Resolution: Application of Saudi law and dispute resolution mechanisms
16. Notices: Methods and addresses for formal communications between parties
17. Execution: Signature requirements and execution formalities under Saudi law
1. Force Majeure: Provisions for unforeseen circumstances preventing performance, optional but recommended for longer-term agreements
2. Fit-out Works: Include when tenant will perform initial modifications to the property
3. Operating Hours: Required for commercial properties with specific business hours restrictions
4. Environmental Matters: Include for properties where environmental compliance is significant
5. Competition Restrictions: Include for commercial properties in shopping centers or similar venues
6. Option to Renew: Include when parties agree to potential lease/license extension terms
7. Guarantees: Include when additional security through corporate or personal guarantees is required
8. Property Management: Include for properties with specific management arrangements or requirements
1. Property Description: Detailed description of the leased property including floor plans and boundaries
2. Rent and Payment Schedule: Detailed breakdown of rent, license fees, and payment dates
3. Service Charges: Breakdown of service charges and calculation methodology
4. Building Rules and Regulations: Specific rules governing the use of the property and common areas
5. Handover Condition Report: Documentation of property condition at commencement of lease
6. Permitted Alterations: Specifications of allowed modifications to the property
7. Licensed Activities: Detailed description of permitted business activities under the license
8. Form of Bank Guarantee: Template for any required bank guarantees
9. Insurance Requirements: Detailed specifications of required insurance coverage
Relevant legal definitions
Clauses
Relevant Industries
Retail
Commercial Real Estate
Manufacturing
Hospitality
Healthcare
Education
Financial Services
Technology
Logistics
Entertainment
Food and Beverage
Professional Services
Relevant Teams
Legal
Real Estate
Facilities Management
Operations
Finance
Compliance
Risk Management
Corporate Services
Business Development
Administration
Relevant Roles
Real Estate Manager
Property Manager
Legal Counsel
Compliance Officer
Facilities Manager
Operations Director
Commercial Director
Business Development Manager
Finance Manager
Risk Manager
Corporate Services Manager
Procurement Manager
Chief Operating Officer
General Counsel
Real Estate Director
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