Licences in property law

In many cases, an individual or business needs to occupy a property that they do not otherwise own or have a legal right of occupation in. This permission is called a ‘licence’.

A licence is different to a lease: leases tend to be for relatively long periods of time, whereas the licensee usually needs a short-term occupation of the property. Licences, unlike leases, do not usually create or grant any legal interest in the land for the licensee. Licences operate to allow the licensee to use the property for a specific purpose for a defined period of time.

Once granted, a licence makes it lawful for a property to be used by a person who is not the legal owner – but they will not have the right to have exclusive possession of the property. Without a licence, there is no right to occupy the property.

The grant of licences

A licence may be express or implied. For instance, an everyday-life example of an implied licence arises when a shopkeeper invites customers to enter the premises to do business.

Express licences govern specific situations where permission has been expressly granted to a particular individual, for example, where a property owner invites guests to dinner or to stay in a room on their property. The licence governs only the specified period of the stay, and any re-entry after that period without further permission may constitute trespass.

An individual cannot grant a licence to themselves, nor to themselves jointly with another. It can only be granted by a property owner who is different from the licensee.

The effect of a licence

A licence gives minimal rights to the licensee. Therefore, they usually have no interest in the land and the licence does not create an interest in the land – it simply prevents the licensee from being a trespasser in law. However, the law is still evolving and the courts are moving towards accepting that in some cases, a license does create an interest in land.

Where the licence is contractual (ie. granted under a contract), the licence may specify certain rights given to the licensee. Sometimes, it can be difficult to determine whether a person is a contractual licensee or a lessee. The question can usually be resolved by looking at the substantive terms of the agreement rather than the ‘label’ given to the permission, and the terminology used.

Contractual licences

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For more information on:

  • Revocation of licences
  • Irrevocable licences
  • Effect of a licence on the land