A ‘licence to occupy’ is a handy tool for conveyancers managing their client’s settlement dates in relation to the logistics of moving house.
A licence gives the holder a contractual right to occupy (or sometimes just access and store furniture in) a property which they do not yet own or have just sold.
In some ways, it’s like a ‘micro-lease’—typically for only a few days— either just before or just after settlement.
It allows, for example, a purchaser the right to access the property they are buying ahead of the settlement date so they can begin moving in. This can be especially helpful where the purchaser is also selling a property and needs to provide their own buyer with vacant possession.
Alternatively, a vendor may request a licence to remain in the property for a few days after settlement, giving them time to move out.
Although it resembles a lease, lawyers maintain that a licence is different: it confers only a contractual right to occupy, not an interest in the land. Courts generally hold that if the contract does not grant exclusive possession of the property, it will be classified as a licence rather than a lease—and this is usually stated clearly in the licence agreement.
When properly drafted, licences will therefore generally not be regulated by residential tenancy laws, meaning licence holders likely have fewer legal protections than tenants. That said, licences are generally used for short-term residential arrangements bridging settlement periods, so the risk is not as large.
It is standard practice for a licence grantor (i.e. the owner) to require the licence grantee to pay a licence fee, often comparable to market rent for the property.
As they are unlikely to hold landlord insurance, licence grantors typically require licensees to obtain insurance coverage—usually a simple and inexpensive public liability policy, which your conveyancer can help arrange.
Licence Agreements are usually 3-4 pages long and cost $600 - $1,000 to produce. They don’t require registration.
If you would like assistance drafting a licence agreement or negotiating licence terms, Dott & Crossitt is here to help:
More about Dott & Crossitt Solicitors
Founded in 2014, Dott & Crossitt is the largest conveyancing firm in NSW, settling more than 6,000 transactions annually. We also have a national presence with ten offices across Australia. But Dott & Crossitt isn’t just a conveyancing factory—we’re known for our quality service, with over 1,000 5-star Google Reviews. In 2024, Dott & Crossitt was acquired by the Local Agent Finder group, Australia’s largest agent comparison platform and one of the Australian Financial Review’s Fastest Growing 50 companies for four years running.
