Bare Land Licences

Businesses and other people and organisations usually occupy their premises under a lease. A lease is a formal arrangement whereby the Tenant has exclusive use of the premises for a specified term. Leases usually contain detailed provisions as to what a tenant must and must not do in order to protect the value of the Landlord’s reversionary interest in the premises.

Sometimes it is not appropriate to grant a lease. If the person or organisation is only going to occupy the premises for a short time (say, less than 6 months) or if the occupier is not going to have exclusive use of the land, it may be appropriate to grant a Licence.

A Licence is similar to lease in that it has a fixed term. However, a Licence is unlike a lease in that it is not an interest in land and a licensee cannot acquire security of tenure. An arrangement is a lease if the occupier has exclusive possession of premises for a fixed term. Such an arrangement is a lease whether or not the parties call it a lease. It cannot be a licence just because the parties call it a licence. The Licences in this subfolder are drafted in such a way that the licensee does not have exclusive occupation of the premises.

Beware of granting a “licence” that is really a lease. A court might decide that the licensee is really a tenant who has security of tenure. If there is any doubt as to whether a proposed arrangement will be a lease or a licence, the safest approach is to grant a lease which excludes the tenant’s right to security of tenure.

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All Land Leases & Licences