Licence to Lease…
Foskett Marr Gadsby & Head LLP briefly set out the distinction between licences and leases, which may be useful to owners and occupiers of commercial premises deciding how to document short term occupation of a property.
Owners/occupiers ought to give careful consideration to the document as there are different legal implications depending on whether a licence or lease is used.
- Grants personal right or permission that offers no security
- Does not benefit from the protections given by the Landlord and Tenant Act 1954
- Falls outside the Minimum Energy Efficiency Standards regime
- Exempt from Stamp Duty Land Tax liability
- Grants exclusive possession (a person has exclusive possession if they can exercise the rights of the owner and exclude the landlord/third parties from the land, though landlord may have re-entry rights)
- Grants legal interest in land and binds successors in title
- Granted for a term normally with a rent
- May benefit from the protections given under the Landlord and Tenant Act 1954 (see https://www.foskettmarr.co.uk/index.php/2016/07/contract-excluding-security-tenure-commercial-properties/)
- There may be a Stamp Duty Land Tax Liability on the grant of the lease
If you wish to discuss further, please contact Foskett Marr Gadsby & Head LLP’s Property Teams, based in Epping and Loughton, on 01992 578 642. Further details on https://www.foskettmarr.co.uk/index.php/our-team/commercial-property-solicitor-essex/.Owners/occupiers should note that the label of any document can be immaterial, it is the substance of the document that needs to be taken into consideration.