Land law
Lease vs licence
A lease grants exclusive possession of land for a term and is a proprietary interest that can bind third parties; a licence is mere permission to be on land — it is personal and does not confer exclusive possession.
Last reviewed 14 June 2026
| Aspect | Lease | Licence |
|---|---|---|
| Exclusive possession | Yes — the hallmark of a lease (Street v Mountford) | No — the occupier cannot exclude the owner |
| Nature of the right | Proprietary — capable of binding third parties | Personal — binds only the parties to it |
| Term | A certain duration (fixed or periodic) | No requirement of a certain term |
| Statutory protection | May attract security of tenure / statutory protection | Generally little or none |
Key cases
- Street v Mountford [1985] AC 809
- Antoniades v Villiers [1990] 1 AC 417
- AG Securities v Vaughan [1990] 1 AC 417
Frequently asked questions
What is the key test for a lease?
Exclusive possession, for a term, at a rent. The label the parties choose is not decisive — the courts look at substance over form (Street v Mountford).
Can a licence bind a buyer of the land?
Generally no. A licence is personal and does not bind third parties, whereas a lease is a proprietary interest that can.