Licence or Lease? Why Your Mall Kiosk, Coworking Desk or Parking Spot May Not Be a Tenancy in Ontario

The word on the contract does not decide it — the exclusive-possession test does. And getting the classification wrong can cost you the one protection that matters most when the owner wants you out.

I’m Arthur Zhao, a broker in the GTA. A small-business owner I know signed a single page titled “Licence Agreement” for a kiosk in a mall concourse and felt reassured — a licence sounded lighter, more flexible, easier to walk away from than a lease. Eighteen months in, the mall wanted the space back on short notice, and the question that suddenly mattered was not what the document was called but what it had actually granted. Licence versus lease is one of the most misunderstood distinctions in commercial space. It turns up wherever people occupy space without a full storefront lease — a kiosk, a coworking desk, a monthly parking spot — and the label on the paper is often the least reliable guide to which one you really have.

A licence is a permission; a lease is an interest in land

Start with what each thing is, because the whole dispute flows from it. A licence is, in principle, a personal permission to use space — the owner lets you be there for a purpose, and in principle that permission can be revoked. A lease is different in kind: it grants you an interest in the land itself for a term. That single distinction is why one can be revocable in a way the other is not, and why a tenant carries statutory protections a licensee simply does not. The label a party chooses does not change which of these two things the arrangement really is; the substance does.

The decisive question: can you lock everyone else out?

The test used to tell a lease from a licence is exclusive possession — whether the occupier can exclude everyone else, including the owner, from the space for the term. If you can shut the door and keep the owner out, that points strongly to a lease. If the owner keeps the run of the space, moves you around, or shares it, that points to a licence. This framework was set out by the UK House of Lords in Street v Mountford [1985] AC 809 and is widely cited across common-law jurisdictions; whether and how an Ontario court applies it to a specific arrangement is a case-by-case question I’m not resolving for you here. The point for a business owner is simpler than the case law: the analysis looks past the title of your document and asks what control over the space you were actually given.

Licence vs lease, side by side

Three everyday Ontario arrangements sit on this line

Most disputes I see are not about full storefront leases — they are about the in-between arrangements, and three are worth naming because almost every reader has signed one.

A kiosk in a mall concourse. Often documented as a licence: the mall keeps control of the concourse, sets the hours, and can relocate the unit. That usually reads as a licence — but not always (see the grey case below).

A desk in a coworking space. Typically a licence: you buy access to a seat or a hot desk, the operator runs the floor, cleans it, and can move you. You are paying for use, not for a demised space you can lock the world out of.

A monthly parking spot. Usually a licence to park, not a lease of the bay — the operator controls the lot, and you have permission to leave a car there, not dominion over a piece of land.

Each of these usually lands on the licence side. “Usually” is doing real work in that sentence — the facts of your particular arrangement, not the pattern, decide any given case.

The grey case worth slowing down for: the lockable kiosk

Change one fact and the analysis can flip. Picture a kiosk that has its own defined footprint, a shutter you can lock, and a boundary the mall does not cross — you hold the only key, and no one else uses that footprint. The document still says “Licence.” But the facts now look a lot like exclusive possession: you can exclude everyone, including the owner, from a defined space. This is the case where the label and the reality pull in opposite directions, and it is exactly the situation where the classification is genuinely arguable. If your arrangement has these features, do not assume the heading on the page has settled anything — the more control you actually hold over a fixed space, the more a court has to work with to find a tenancy.

Why the “licence” label can’t do the job by itself

Here is the wrinkle that trips people up. You might expect that calling something a licence puts it cleanly outside the Commercial Tenancies Act. It doesn’t, and the reason is in the Act’s own text. The Commercial Tenancies Act, R.S.O. 1990, c. L.7, never defines “tenancy” at all — and its s.1 definition of “tenant” is deliberately broad: it “includes a person who is lessee, occupant, sub-tenant, under-tenant, and the person’s assigns and legal representatives.” Because that definition reaches an “occupant,” the mere fact that your paper says “licence” — and calls you a “licensee” rather than a “tenant” — does not automatically lift you out of the Act’s reach. Substance over form is not just a judge-made instinct here; it is built into how the statute itself decides who counts as a tenant.

What the wrong label actually costs you: relief against forfeiture

So why does the classification matter in practice? Because of what happens when the owner wants you out. If your arrangement is a tenancy, the Commercial Tenancies Act gives the tenant a route the licensee does not have. Where a landlord is proceeding to enforce a right of re-entry or forfeiture — for unpaid rent or another cause — the Commercial Tenancies Act, s.20(1) lets the tenant apply to the Superior Court of Justice for relief, and the court “may grant such relief as … the court thinks fit,” on the terms it sets. The Act also builds in a notice step before re-entry or forfeiture (the Commercial Tenancies Act, s.19). Read that carefully: s.20(1) is a right to ask, and a discretion for the court to grant if it considers it just — it is not an automatic right to get your space back. A pure licensee doesn’t even reach that door: with no tenancy, there is no statutory application for relief against forfeiture to make. That gap — a discretionary lifeline on one side, nothing on the other — is the whole reason the licence-versus-lease question is worth getting right before you sign, not after.

One more practical difference: insurance and liability

Beyond the statutory protections, the two structures tend to allocate insurance and liability differently — who insures the space, who carries liability for what happens in it, and who bears the risk of damage. I’m flagging this as a practical point rather than quoting any policy wording, because the specifics live in your particular contract and your particular coverage. But it is one more reason not to treat the licence-versus-lease choice as a cosmetic labelling decision: it can change who is on the hook when something goes wrong.