Blog Post: Licensing vs. Leasing – Structuring Deals for Temporary Lot Tenants
When it comes to monetizing your mall’s parking lot with short-term tenants, how you structure the agreement matters. Whether you’re renting to a carnival for two weeks or hosting a seasonal pumpkin patch, understanding the difference between a license and a lease will protect your interests and keep things running smoothly.
What’s the Difference?
A lease grants exclusive rights to use a defined space for a set period. It typically creates a landlord-tenant relationship and carries with it specific legal obligations and protections for both sides.
A license, on the other hand, simply gives someone permission to use the space for a purpose—without transferring any interest in the property. It’s typically revocable, flexible, and doesn’t create a formal landlord-tenant relationship.
When to Use a License
Licenses are ideal for short-term, limited-use activations where flexibility and control are key. Examples include:
– Carnivals and circuses (1–3 weeks)
– Inflatable parks or family attractions
– Farmers markets or pop-up food events
– Weekend festivals or nonprofit events
– Seasonal tree or pumpkin sales
Licenses allow property owners to retain control, easily adjust dates, and avoid the complexities of traditional leasehold interests. They also tend to move faster through legal and administrative review.
Pros:
– Quick to set up
– Easier to terminate
– More landlord-friendly
– Doesn’t trigger tenant protections
When a Lease Might Make Sense
Leases are more appropriate for longer-term tenants who will be on-site for multiple months, want exclusivity, or are making significant investments in infrastructure.
Think:
– Semi-permanent event structures
– Larger-scale seasonal retail that installs equipment
– Operators who need security of term to justify cost
Pros:
– Clear, enforceable obligations
– Useful for longer terms or exclusive use
– Often carries more weight with banks or insurers
But keep in mind: leases also require more paperwork, time, and often carry legal baggage if the relationship needs to end early.
The Hybrid Option: A License with Guardrails
In many cases, a well-written license agreement can offer the best of both worlds. Attorneys help landlords craft simple, protective agreements that lay out responsibilities, insurance requirements, indemnification, cleanup expectations, and terms of use—without getting bogged down in full lease language.
Make sure the agreement works for your local municipality’s permitting and zoning requirements.
Final Takeaway
If you’re looking to generate revenue from temporary users in your parking lot, structure the deal based on time, complexity, and risk. In most short-term scenarios, a license is not only sufficient—it’s smarter.
And you don’t have to figure it out alone. KevaWorks helps property owners navigate these details.