It is well known that the unauthorised use of a road for at least twenty years can result in the acquisition of a right of way. Granting the user a licence should prevent a right of way arising. However a recent case shows that simply granting a licence may not be enough to avoid the creation of an easement.
An easement, such as a right of way, a right of light or a right to use pipes or sewers, may be granted expressly by deed or it may arise impliedly or by prescription. There are several ways in which a right may be acquired by prescription but the essential points are that the right must have been exercised for at least twenty years and the use must have been “as of right”, which means that it must have been without force, without secrecy and without permission.
You might not object to someone using a path or a road on your property but if you let the unauthorised use continue for twenty years they may acquire a legal easement which could interfere with the future development of the property. To prevent that happening you could grant them a licence to use the path or the road, perhaps on payment of a small annual sum. That will prevent the use being without permission, which is one of the requirements for the acquisition of an easement by prescription.
That is what happened in a recent case concerning use of a private service road on land belonging to the London Tara Hotel for access to the adjoining Kensington Close Hotel. A licence to use the road was granted in 1973 to the then owner of the Kensington Close Hotel, subject to a nominal payment of £1 per year if demanded, but the payment was not in fact demanded. The licence allowed use by the owner’s agents and visitors but was personal to the then owner. The Kensington Close Hotel changed hands in 1980 and again several times over the years but use of the service road continued without any objection by the owner of the London Tara Hotel. Then, following an unrelated dispute, the owner of the London Tara Hotel tried to stop the use and in response the current owner of the Kensington Close Hotel claimed it had acquired a right of way by prescription.
The owner of the London Tara Hotel argued that although the use had continued for at least twenty years, it could not create an easement by prescription because it had been permitted by the licence and so was not as of right. It said there had been nothing to suggest that ownership of the adjoining hotel had changed, so there was no reason to object to the use. But the court did not agree. As the licence was personal to the original owner, it terminated when the hotel was transferred in 1980 and a mistaken belief by the grantor of a licence that it is continuing does not prevent the creation of a prescriptive right. There might have been an implied licence if the owner of the London Tara Hotel had demanded the £1 annual payment or done any other positive act to show that the use was with its permission, but it did not do so.
The lesson is that simply granting a licence may not be enough alone to prevent the acquisition of an easement. The landowner must also regularly check that the use of the land is within the terms of the licence. If it is not, then the use may no longer be by permission and could be leading to the creation of an easement. The simplest way to keep a licence alive is to demand the nominal annual licence fee—the administrative cost involved may be far cheaper in the long run than allowing an easement to arise.
Source: London Tara Hotel Ltd v Kensington Close Hotel Ltd  EWHC 2749.