Exclusive possession is the right to exercise control over the property to the exclusion of any other person (including the landlord). A licence however is effectively a permission to exercise certain personal rights over the property but those rights are in common with other persons such as 3rd parties or the landlord.
A licence can be for a fixed term and a licence fee can be payable in connection therewith similar to a lease for a particular rent over an agreed term. It is important therefore to examine the substance of what is being granted as regardless of whether a document is labelled a licence or a lease, if it grants exclusive possession, it will constitute a lease.
The scenarios that a person might receive a commercial licence rather than a lease would typically arise when the landlord needs to retain a greater degree of control over the property, such as if a landlord grants a licence to use a car park space but reserves the right to move the recipient to a different car space if required. If a retailer is granted a concession to operate in a certain area in a larger shop, that concession is generally a form of licence as the owner may need to be able to re-organise the layout and move the recipient to a different spot. Those types of the licence may be for a shorter time period that a lease and recipient will not be expected to invest funds in fitting out the area.
If a tenant is allowed into a property to carry out certain fit-out works before the grant of a formal lease, that arrangement is a form of licence.
We can advise you on whether it is more appropriate than a form of licence is used than a lease depending on the commercial objectives of the parties.