Lease vs. License – What is the difference? Or if it looks like a lease and reads like a lease…

March 13, 2023


Commercial property occupancy agreements can take various forms. The term “lease” is commonly used to describe the agreement that governs the relationship between parties whereby one party is entitled to occupy the property of another party for a fee. Similar to leases, license agreements can also govern the contractual relationship between an occupant and a property owner. However, each type of agreement provides for different sets of property rights for both occupants and owners and understanding the distinguishing factors between the two is critical in the commercial leasing context. 

This paper will highlight the similarities and differences between leases and licenses by: (i) providing an overview of the elements that make up each agreement, and (ii) through a case law lens, illustrate the main differences in the rights that each agreement allocates to parties and provide recommendations on which type of agreement is suitable for a particular client’s needs.