Lease, Licence, Tenancy at will: which to use when
A practice note that provides guidance on the key differences between a lease, a licence to occupy and a tenancy at will for documenting the short-term occupation of commercial premises. This note examines the defining characteristics of each arrangement, focusing on the crucial concept of exclusive possession and the principle established in Street v Mountford [1985] A.C. 809 that courts will look to the substance of an agreement over its label. It explores the significant practical implications of choosing one arrangement over another, particularly concerning security of tenure under the Landlord and Tenant Act 1954 (LTA 1954), how each arrangement is terminated and its binding effect on successors in title. This note assists landowners and occupiers in navigating the risks and benefits associated with each option, highlighting common pitfalls such as the creation of an unintended periodic tenancy.
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