Unsurprisingly, people (and courts ) use the terms ‘license’ and ‘easement’ interchangeably by the parties to the license.
But they are clearly different rights, with different legal consequences.
There are differences in what
- uses the holder can make of the property,
- the owner of the property can do about, and
- happens if the property is transferred or the right is assigned to someone else.
An ‘easement’ is a present interest in real estate, giving the holder a right to the real property and the ability to bring a suit for trespass or ejectment. Because it is an interest in the property itself, it is subject to the statute of frauds, so must be granted in writing.
A license gives the holder legal authority to perform some act on property of another, or use the property in some way. It gives the holder a personal privilege, but not an interest in the land itself. It can generally be terminated or revoked by the grantor / property owner at anytime.
If the owner of the property transfers the property, the license is automatically revoked. Any attempt by the holder of the license to transfer it or assign it automatically terminates the license. Because it can be terminated at any time, a license is not insurable by a policy of title insurance. It is not subject to the statute of frauds, so it can be created orally as well as in writing. A license is a permissive use, as opposed to adverse possession or a prescriptive easement.
Nevertheless, a license can become irrevocable, and thus for practical purposes similar to an easement.
This can occur when, in reasonable reliance on the license, the licensee spends time and a substantial amount of money on improvements, with knowledge of the property owner, such that it would be unfair to terminate the license. The license then continues for as long a time as the nature of the license calls for. The license becomes irrevocable on the grounds of ‘estoppel.’
Once the license becomes irrevocable, it is treated like an easement. If the property is transferred, the license is not automatically revoked, but is transferred with the land. The holder of the irrevocable license may transfer or assign the license. Irrevocability adds a lot of weight and breadth to a license, and landowners who grant licenses must take care to clearly define the license, and pay attention to what is happening on their property.
Always put the license in writing and as land owner, make sure the license agreement contains specific, explicit terms.