A licence is personal, generally revocable, and confers no such possession
A worked RES examination question on lease vs licence, from our Paper 1 bank — with the rule it turns on, and why each of the four options is right or wrong.
The question
A building owner has two occupiers to consider before selling the block. Mr Aziz holds a shop unit under a two-year arrangement, with the unit to himself; Mr Boey is merely allowed to set up a kiosk in a corner of the shared lobby on a personal footing the owner may withdraw when he pleases. The owner wants to know how the two men's positions differ in law.
Consider the following statements.
- (i) Mr Aziz's interest can run with the land and be assigned; Mr Boey's permission is personal to him.
- (ii) Mr Aziz cannot be turned out at will during his term; Mr Boey generally can be.
- (iii) Mr Aziz has exclusive possession of his unit; Mr Boey has no such possession of the lobby.
- (iv) The two men stand in the same position in law, only the labels used telling them apart.
The answer, and why
Answer: D
The rule. A lease is capable of running with the land and being assigned, is not revocable at will during its term, and confers exclusive possession. A licence is personal, generally revocable, and confers no such possession. The two are not the same, and the label alone does not mark them apart.
Why D is correct. (i), (ii) and (iii) capture the real differences as they play out here — Mr Aziz's interest is assignable and secure for its term with exclusive possession, while Mr Boey's use is personal, revocable and without possession. (iv) is false: the two differ in substance, not merely in name.
The other options.
- B adds the false (iv), reducing the distinction to a label.
- C drops the security-of-term point at (ii).
- A takes the false (iv) and drops the assignability point at (i).
Exam note. Lease: runs with the land, secure for the term, exclusive possession. Licence: personal, revocable, no possession. The difference is real, not nominal.
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