In a leasehold, licence simply means permission. If you do not have a right to be on another person’s land or property, then you are considered a trespasser. If the owner, however, has given you permission to be there, then you are a licensee. Issuance of a licence may arise in various situations and it may be granted for different reasons. One example of which is a landowner giving another landowner a right of way personally by creating a licence. Such licence given for a right of way is usually treated as an easement.

Another example of a licence is a permission to occupy land, which is referred to as a contractual licence. This one closely resembles a tenancy but is largely different from it because of its consequences. A contractual license generates personal rights or contract, whereas a tenancy does not.