Which of the following statements concerning the difference between a lease and a licence is FALSE? (1) A lease is both a contract and an interest in land, where as a licence is only a contract. (2) Both leases and licences always confer an exclusive right to possession of the premises. (3) A lease runs with the land and can bind third parties, where as a licence is only binding on the parties to the contract. (4) While licences and leases may appear to be similar, the legal rights involved are very different.

(2) Both leases and licences always confer an exclusive right to possession of the premises.

Explanation

No state in the land passes to a license, and this is the basic difference between the two. While a lease is described as an agreement which gives exclusive possession of the premises as against all the world including the owner, a license simply gives privilege to occupy under the owner. Therefore, a person holding a license has the privilege to occupy the premises only under the owner. An individual holding a lease has exclusive rights to possess the premises.