Lease or licence – what’s the difference?
Many clubs have contacted our legal helpline because they’ve been told they have a licence to use a certain area where some other clubs have leases. So what are the differences?
Some clubs lease their premises, some have only a licence. It is also a common situation we see where a club can hold both a lease and a licence. For example, where a club leases a building for exclusive occupation as their clubhouse, while also holding a separate licence to make use of playing fields or recreational areas which may be used by other clubs on the same site.
What exactly is the difference?
The main difference between a lease and a licence is that a lease means you own an interest in the land even if it is only for a brief period of time. A licence is simply a personal permission for use of the land from its owner and does not create any ownership. Typically, licences are shorter and easier for the landowner to terminate.
Like a book and its cover, the name of the document doesn’t actually define what it is. The law will look at the substance of your document, not the name written on the front. The important test is whether or not there has been exclusive possession of a certain area. If there has been exclusive occupation and rent paid, this will usually lead to the creation of a lease, even if this was not the intention of the landlord.
Obtaining grant funding
The ownership of the land gained by holding a lease can prove very beneficial, particularly if it is long term, as it can give you access to grant funding from bodies such as Sport England. Grant funding would generally not be given out where there is only a use of facilities through a licence since nobody will really want to invest in the landowner’s infrastructure without the security of a definite return for the sports club.
If you do hold a licence, a work around for this can be to make a joint application with other clubs, which may own the land or the pitches, or with the land owner. The funding then may be given based upon their interest in the land and your clubs use of it for sport. It is important to have whatever written documents you hold reviewed before considering taking any action.
If you have any queries about the matters discussed please contact your dedicated team:
Call 08448 240 432 or [email protected]
Chartered Standard ClubsCall 0191 211 7799 or email [email protected]