An incorporated Charity is building a community centre on land leased from the land owners. The centre will incorporate a space that will be sublet to another group with a formal lease drawn up by the solicitor.

Another area will be shared by a pre school group and two other organisations. The pre school and these organisations do not want to enter into a lease preferring to have a licence agreement instead.

The solicitor hired by the charity is saying that a lease must be created in these circumstances. The solicitor is concerned that with a licence alone, the ongoing use might create a secure and protected tenancy under the Landlord and Tenant Act 1954.

The head lease does require there to be a lease. Should the charity insist that the pre school and other users sign a lease as suggested by the solicitor?