When is a Lease not a Lease?
Whether you are a landlord or a tenant of residential or commercial property, you can usually be reassured that any legal document you have sets out the basis on which the landlord lets, or the tenant occupies, the land or property.
Sometimes however, things are not always what they seem.
There are crucial differences between Leases and Licences and we sometimes find that a document which calls itself a Licence, could in fact actually be a Lease. This sometimes happens when the document has not been prepared by a Solicitor.
A Lease gives the occupier rights to exclusive possession of the land. This could be a commercial lease of business premises or a long term residential lease for a flat, where somebody needs to retain control over communal areas etc. Leases provide ‘security of tenure’ making it more difficult to evict the tenant unless specific grounds apply and the correct procedures followed.
In contrast a Licence is a personal right to occupy or use land or property belonging to another. For example to rent a room, or parking space, or graze a field. The tenant will not have exclusive possession and has very few rights. The licence can be terminated by the landlord giving the relevant notice set out in the licence or under rules of law.
We often see clients who have, for example, a document which is headed “Licence”, but when you look at the terms it become apparent that it could actually be a Lease, despite what it says. In some cases the opposite applies. Having a Lease might be more beneficial for the tenant, but it depends on the circumstances.Therefore a Solicitor needs to consider carefully the terms of any written document to establish whether it is what it says it is. If you have any concerns contact once of our helpful property lawyers for some advice.
Published 7 June 2018
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