Licences in Property Law

A licence is permission, making it lawful for a property to be used by a person who is not the legal owner. Therefore, existence of such permission makes lawful what would otherwise be a trespass. It does not create or grant any interest in the land to the licensee.

A licence is normally created where a person is granted the right to use premises without becoming entitled to an exclusive possession of them. In practice, most commonly licences operate as to allow for the property to be used for a specific purpose and for a defined period of time.

The grant of licences

A licence may be express or implied in accordance with the way the permission was granted. An everyday-life example of implied licence is in the case of a shopkeeper in the invitation to customers to enter his premises to do business.

In contrast express licences govern more specific situations where the permission has been expressly directed towards a particular individual. An example is where owner invites guests for dinner or to stay in a room on his property. The licence governs only the specified period of the stay and any re-entry after that period without further permission would constitute trespass.

It is important to note that a person cannot grant a licence to himself nor to himself jointly with another. Therefore, it must be granted by an owner of the property who is different from the licensee.

The effect of a licence

Whenever a licence is granted, it will be expected to give minimal rights to the licensee. Therefore, he has no interest in the land and the licence establishes no way of accruing such. It merely prevents him from being a trespasser and no more.

However, in certain situations where the licence is contractual as granted under a contract, the agreement could identify certain rights given to the licensee. Further, in some cases difficulties exist in determining whether a person is a contractual licensee or a lessee. Whenever, such issue arises, those are resolved through looking at the substantive terms of the agreement and not by looking at labels or terminology used. If a contractual licence is established it provides considerably smaller rights to the licensee were a lease to be found in place.

Contractual licences

Where a licence is granted by a contract, the resulting right to occupy is usually described as a contractual licence.

A contractual licence may be revocable or irrevocable in accordance with the terms of the contract between the parties and their intentions when signing it. If the revocation of a licence is a breach of contract, the licensee may recover damages for the breach.

Further, the rights under the licence may be assignable or not assignable depending on the express and implied terms of the agreement.

Revocation of licences

The law relating to revocation of licences has been the area creating the most difficulties over the past and is still troubling the courts. In general, the licences could be revoked through giving notice of revocation to the licensee allowing him reasonable time to leave the property. The concept of reasonable time is flexible however the period specified should not be seen as oppressive.

There are some exceptions to the rule in particular if the licence is coupled with a proprietary interest then the licensor clearly cannot revoke it.

However, if there is no proprietary interest, equity could provide remedies to ensure the fairness of the outcomes. For example, if the licensor could not lawfully revoke the licence, equity could grant an injunction to restrain him.

If after the revocation of the licence, the licensee leaves the property and then re-enters, his re-entry constitutes trespass. This is so even if the revocation of the licence was wrongful prior to him moving out.

Irrevocable licences

There are licences which cannot be revoked and are known as irrevocable. A licence may be irrevocable for a number of reasons including because the terms of the contractual licence make it such. Alternatively, it could not be revoked because an estoppel has worked in favour of the licence.

Effect of a licence on the land

Since a licence does not create an interest in land, it is not binding upon a successor in title of the original grantor unless the circumstances of the case are such as to give rise to a constructive trust. Therefore, in principle if the property is sold to another the interest under a licence does not pass with it.