In the following series of articles we will compare leases and licenses and explain the differences between them and the relative pros and cons. In this first article we have a look at an overview of leases and licenses.

A licence and a lease both relate to the use of property, however they have fundamental differences regarding the legal rights and implications they impose on both parties involved. This article highlights the main differences between a licence and a lease.

 Definition and Nature

A lease is a contractual agreement between a landlord/lessor and a tenant/lessee. It grants the tenant/lessee with an exclusive possession of the property for a defined period of time in exchange for rent. This means that the landlord cannot enter the premises at any time as the tenant enjoys exclusive possession of the property under a lease. A lease also creates a legal interest in the land.

On the other hand, a licence is simply a right to occupy the property for the period and on the terms specified in the license which is granted by the licensor (owner of the property) to another party known as the licensee (occupier of the property). It does not grant exclusive possession like a lease and it does not confer any legal interest in the land. This means that a landlord can enter the property at any time under a licence as exclusive possession is not granted under a licence.

Crucially it does not matter how the parties describe their relationship. It is open for a court to find that a person occupying under a ‘license’ is really a tenant under a ‘lease’ if the criteria for a lease are met namely exclusive possession for a defined period of time or equally that someone under a lease was really only an occupier under a license.

A landlord will wish to consider their business needs to determine which of the two arrangements to go for. A tenant should also be alive to the differences between a license and a lease as they come with very different rights and obligations.

If you require legal advice or assistance please call: or email Winston Brown on 0208858 5996 or 07894219314 Winston.brown@brownandcosolicitors.co.uk.