License (England and Wales)
In English land law, a license is a contractual right to use a property.
Demarcation
The classic distinction between license and lease was based on the characteristic of exclusive possession. The legal consequence was that the lease worked in rem, while the license only represented a contractual permit and could only bind the respective parties:
"A dispensation or license properly passeth no interest, nor alters or transfers property in any thing, but only makes an action lawful which, without it, had been unlawful."
A typical example of this is entering a shop: The person entering receives (implied) a license to enter the shop and can therefore not be sued for trespass .
The advance of tenant protection through rent acts meant that land lords (~ landlords) only issued licenses . Since at the end of the actual term of a lease it was extended by law, was difficult to terminate and was even inheritable, land lords tried to agree to a license instead of a lease . As a reaction to this, the courts ruled that the actual wording of the agreement could not determine the delimitation of lease and license ; In addition, the criterion of exclusive possession was abandoned as the sole criterion for delimitation. It is therefore now necessary to have precise knowledge of the respective case law in each individual case in order to decide whether a lease or a license is present.
Exclusive possession
An important, if not the only, characteristic of a lease is that it requires exclusive possession :
- Luganda v Service Hotels Ltd (1969)
- The landlord left some rooms to the plaintiff and placed porters and room service next to them. The court ruled that there was no lease as the plaintiff could expel anyone but the landlord of the rooms (exclusive occupation). Consequently, the protective provisions of the Landlord & Tenant Act 1968 did not apply .
- Brooker Settles Estates Ltd v Ayers (1987)
- In procedural terms, the decision Court of Appeal , that the issue of exclusive possession actual nature is and to be decided by the trial judge.
designation
The designation by the parties is irrelevant for the definition:
- Addiscombe Garden Estates Ltd v Crabbe and Others (1958)
- The trustees of a tennis club were given the right to use a tennis court by the landlord . The document was called a license . If the tennis club did not pay, the landlord had the right to enter; the trustees had to keep the premises and the right to quiet enjoyment , the landlord had the right to inspect the premises for maintenance. The court ruled that regardless of the designation as a license, the details of the agreement constituted a lease .
- Street v Mountford (1985)
- The decision as to whether there is a lease or a license does not depend on the designation, nor on the provisions in the contract, but on the actual implementation.
Legal consequences
The distinction is still important when it comes to the applicability of tenant protection regulations, especially the ease with which a license can be terminated (cf. Monmouth Borough Council v Marlog (1994)). Furthermore, the lease also has an effect on third parties, whereas the license only has an effect on the contractual partner. Finally, the Landlord & Tenant Act 1954 only takes effect if there is a lease. :
literature
- Margaret Wilkie, Peter Luxton, Juill Morgan and Godfray Cole: Landlord and tenant law . 5th edition. Palgrave, 2006, ISBN 978-1-4039-1754-6 , 1.6 Distinction between a Lease and a License.
