Lease v licence

The distinction between a lease and a licence is a fundamental consideration in property law, impacting the rights and obligations of parties involved. This guidance note explores the critical differences between these two legal instruments, providing essential insights for practitioners navigating property transactions and agreements.

Topics Covered

What is a lease?
What is a licence?
Determining whether a lease or licence is created
Benefits of a lease over a licence
Benefits of a licence over a lease
Is a lease or a licence a contract?

Essential Insights

Understand why exclusive possession is pivotal in classifying leases versus licences under Australian law.
Recognise the practical implications of whether an agreement creates an interest in land or merely contractual rights.
Consider judicial precedents revealing that the agreement’s title (“lease” or “licence”) is not determinative.
Explore the nuanced benefits and risks associated with leases, including registration and tenant protections.
Identify circumstances where licences offer cost-effective flexibility versus the formalities of leases.

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