⇒ Even if someone is granted a 'licence' it may be decided by the court that the interest granted is, in fact, a lease! This is crucial becase a leasheholder has statutory protection/rights, whereas a licence holder does not

⇒ Thus, where the alleged 'licence' gives someone occupation rights, it may be crucial to decide if, in fact, the interest granted is better regarded as a lease.

Facts: Mr Street, by an agreement which stated that it was a licence, granted Mrs Mountford the right to occupy rooms in a property. The question for the court was whether the agreement wasn, as expressed in the agreement, a licence, or whether it was in fact a lease. The terms of the agreement included that Mr Street could enter the rooms at any time to inspect, to read the meter, to carry out maintenance and install or replace furniture or for any other reasonable purpose. No on other than Mrs Mountford could occupy or sleep in the room without permission. No children or pets were allowed. The 'licence' could also be terminated by 14 days written notice. The agreement also stated the that the licence did not and was not intended to give a tenancy and conferred no protection from the Rent Acts.

Held: It was held to be a LEASE, not a licence.

⇒ It was said whether or not there was a lease or licence was not a matter of what the parties labelled their agreement, but the actual effect of it: "the manufacture of a five-pronged implement for manual digging results in a fork, even if the manufacturer, unfamiliar with the English language insists that he intended to make a spade"

⇒ Lord Templeman argued the defining feature of a lease is exclusive possession, but this view has been criticised e.g. by Denning LJ in Errington v Errington

⇒ Lord Templeman also pointed out exceptional cases where the prima facie intention is not to create a lease, despite the fact the occupier has exclusive possession:

• Where the parties intended no legal relation at all
• Where the person had no power to grant a tenancy
• Where there is a master and servant service occupation

⇒ Also see the cases of Clear Channel v Manchester CC [2005] and Bruton v LQHT [2001] for recent applications of this case

⇒ Check that you are familiar with the idea of proprietary rights over the land as distinct from personal rights.

⇒ Some other helpful legal resources on licences:

• Cleaver Fulton Rankin: Distinction between licences and leases
• Law Tutor Birmingham: Street v Mountford