When does a license become irrevocable?

A license in real estate becomes irrevocable when the licensee makes substantial improvements to the property. This principle is based on the idea that when a licensee invests significant resources and effort into enhancing the property, it would be unjust for the licensor (the party granting the license) to revoke that license and remove the licensee's interest without compensation or cause.

Substantial improvements are typically defined as changes that increase the value or utility of the property, such as constructing buildings or making major alterations. Because these enhancements create a situation where the licensee has a vested interest in the property, the law often protects that interest by making the license irrevocable.

The other scenarios presented, such as revocation by the landlord, a property sale, or documentation in writing, do not inherently create an irrevocable situation. A landlord can revoke a license at any time, a sale of the property may not affect a license if it is non-transferable, and simply documenting a license does not ensure that it cannot be revoked, unless substantial improvements have been made. Therefore, the act of making substantial improvements is a critical factor that alters the nature of the agreement and secures the licensee's rights concerning the property.