Leases and Licenses
Leases and Licenses:
A lease is a form of ownership of land that only lasts for a specified amount of time. If somebody has a lease over a piece of land then he has the right to the use and enjoyment of that land for the duration of his lease. A lease can have both legal and equitable interests. A person who is under a lease is also offered more protection as they are protected by the Rent Act of 1977 (if their lease was created before January 1989) or through the Housing Act of 1988 (if their lease was created after January 1989).
A license gives a licensee no interest in the land whether it is legal or equitable. A licensee has limited protection as they can be evicted at will or when the term of notice is up that is provided in the contract. A licence is more of a personal right as it cannot be assigned compared to a lease that holds a property right.
The 3 Essential Requirements for a Lease as per Street v Mountford 
1. The Grant Must Give Exclusive Possession
- o This reflects that a lease gives you a proprietary right which distinguishes the difference between a lease and a licence. If one has the exclusive occupation of the property then they have exclusive possession which amounts to a lease. In simple terms, this means that you can exclude the whole world from the property, including the landlord because you have the right to the possession of that property.
- o For example, if you are a lodger and you are sharing the property with the owner, you are not operating under a lease because you do not have exclusive possession of the property.
2. The Estate Must be of a Determinative Period
- In order to create a lease, the amount of time must be specified. The duration must be either fixed or periodic—it must be for an identifiable amount of time
3. Payment of Rent
- Rent is defined as the consideration paid to the landlord by the lessee in return for the use of the premises. In cases where no rent is payable, even where there exclusive possession is enjoyed it may suggest a license however, if rent is to be payable, then it must be certain at the commencement of the lease and the amount payable must be clear at the date for payment.