What is the difference between a Lease and a License?

Fundamentally, a Lease and a License is much the same, in that both grant a right to use property in a certain way. However, there are key legal differences between a Lease or a License that should be understood and considered before making a decision.

The fundamental differences between a Lease and a License are as follows:-

1. EXCLUSIVE POSSESSION:- A Lease grants the Tenant a right to exclude all others from the property, including the landlord. Whilst a License only grants a right to use the premises with others, for example a car park.

2. LEASE RUNS WITH THE PROPERTY:- A Lease runs with the property, which means if the Landlord sells, the new owner / landlord must take the property subject to the Lease. Whilst a License is a contractual right that doesn’t automatically run with the property, and if the Licensor sells, the new owner doesnot have to grant a License.

3. DEFAULTS:- If there is a default by a tenant, how it is treated is different between a Lease or a License. There are a number of legal rights granted to a Tenant, even if it is in default to permit it to gain access to the Property, such rights do not exist in Licenses.

Contact us today to learn more about the difference between a Lease and a License.

Bond Conveyancing Property Lawyers:-

1300 039 559

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