What Is the Difference Between a Lease and License?

A real estate lease and license differ in the respect that leases provide more flexibility, allowing tenants full use of property, while licenses let occupants use land or property only for specific purposes. Leases and licenses also differ in their length of duration and permanency. Leases transfer among owners and property occupants, while licenses do not transfer to successive land users.

Leases and licenses grant permission for using others' lands or properties for specific periods of time; they may cover a long period of time, but eventually terminate. Each has different provisions and includes a differing relationship between property user and property owner. In leases, a relationship exists between the user, usually called the tenant or renter, and the landowner. A lease permits exclusive use, solely to the tenant, for a set period of time. The tenant assumes control over the property during that time, and pays for expenses associated with living on and maintaining the property.

At a minimum, lease contracts last 30 days, although many extend beyond that time. Leases transfer and owners may revoke them. Licenses, in contrast, do not transfer and owners never revoke them. Licenses permit only specified uses, and do not grant users full control over the property. Taxation on licensed property varies depending on the use.