Lease Or Licence
Useful for: Business, Local Government, Government, Non Govt Organisations
In Brief
- Pay attention to the most appropriate form of tenure – is it a lease (exclusive possession by the occupier), or a licence (appropriate for shared spaces/pop ups in common areas/some short-term occupancies).
- The distinction is important because a lease is a grant of a proprietary right to the tenant against the whole world (including the landlord) in relation to the premises and can be enforced at law, whereas a licence is a contractual right only to occupy premises, which if breached by the landlord will give the tenant a right to damages for breach, but not the right to stop a landlord re-taking possession of the premises.
- If there is inherent value to a tenant in ensuring continuity of location of its business (for example a retailer) and certainty of costs of occupation, then a lease will ordinarily be required.
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