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Licence to Occupy

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If you are living in a property without a tenancy agreement you may think that you have no rights. That isn’t necessarily the case. You may have a licence to occupy. In this article our landlord and tenant solicitors look at what a licence to occupy is.

Online and London based landlord and tenant solicitors

If you need legal advice about a licence to occupy or your tenancy agreement the landlord and tenant team at OTS Solicitors can help you. Call OTS Solicitors on 0203 959 9123 or complete our online enquiry form for an appointment.

What is a licence to occupy?

A licence to occupy is an agreement between a property owner and a person occupying their premises that the person can enter and occupy their property. A licence to occupy is distinct and different to a tenancy agreement.

A licence to occupy doesn’t give you the same rights as a tenancy agreement. However, a licence to occupy does provide the person occupying the property (referred to as a licensee) with non-exclusive possession of a property. The property owner is referred to as the licensor.

A licence to occupy doesn’t give the licensee a legal interest in the property. If you enter a property to live in it without either a license or a tenancy then you may be classed as a trespasser. It is therefore best to have a licence or tenancy agreement.

What is a contractual licence to occupy?

There are two different types of licence, namely:

  • A bare licence – you are given verbal permission to stay in a property. An easily understood example is staying overnight at a friend’s house or in a hostel.
  • A contractual licence -  although you would think that a contractual licence must be put in writing that isn’t a legal requirement for a contractual licence. A contractual licence can be entered into verbally or in writing. For a contract to exist there has to be some consideration, for example, that you will pay money in return for a room or provide a service, such as help with property renovations or help with looking after an elderly relative of the property owner. If significant services are provided then the occupation could be referred to as service occupancy or a service licence.

Is a licence to occupy really a licence or a tenancy agreement?

In some situations, a property owner will try to call what is really a tenancy of a property a ‘’licence to occupy’’. For example, by saying that there is no exclusive occupation. Some property owners think that if they don’t offer exclusivity of use in the written document, the agreement will be viewed as a licence to occupy if there is a dispute and the dispute goes to court.  That’s why it is best to get legal advice before entering an agreement over occupation of a property.

A landlord and tenant solicitor will look at the agreement and consider:

  • Is there an intention to enter into a legal relationship?
  • Is there a right to exclusive occupation?
  • Is there a service provided as part of the occupation agreement?

If the answer to all three questions is no then there may be a tenancy rather than a licence to occupy, but the answer isn’t straightforward. That’s because even if exclusive possession of a property is granted by the property owner the occupation could still amount to a licence to occupy if  there is no intention to enter into a legal landlord and tenant relationship.

What does non-exclusive occupation mean?

With a licence, the occupier of a property or licensee gets non-exclusive occupation of the premises. That means the property owner or licensor can grant other licences or can occupy the property (or part of it) themselves.

A tenancy agreement means the tenant gets exclusive occupation of the property so the tenant can exclude other people from the rented property during the term of the tenancy agreement. This includes the exclusion of the landlord who, under a tenancy agreement, is only normally entitled to enter the property in emergencies or after giving reasonable notice to carry out inspections or property repairs.

What amounts to exclusive occupation is a question that has to be asked according to the circumstances. For example, if the property owner can tell you to move room in the house or can enter your room to change the bedding and clean or can introduce a new person to join the household and use the shared facilities, these are all indications of non-exclusive occupation.

Does a licence provide security of tenure?

A licence doesn’t provide the same security of tenure as a tenancy agreement. If you are offered a licence, it is best to get specialist legal advice on whether a licence to occupy will suit your needs.

If you are a tenant, rather than a licensee, you have some statutory rights. Accordingly, you have greater rights as a tenant rather than as a licensee under a licence to occupy.

Is a lodger a licensee?

If you are lodging in a property, or planning to do so, the likelihood is that you will be a licensee rather than a tenant.

Often lodgers aren’t given a lodger agreement or a licence to occupy agreement. However, it is best to have a written licence agreement so you know the basis of your occupation of the property.

How long does a licence to occupy last for?

A licence to occupy can be granted for a fixed period of time (normally a month, six months or a year) or be periodic (normally weekly or monthly).

The granting of a licence to occupy is normally more temporary in nature than a tenancy. Even if the licence to occupy is temporary it is important that the licence to occupy is put in writing and that notice periods are given.

Online and London based landlord and tenant solicitors

For advice on licence and tenancy issues call the friendly and efficient landlord and tenant team at London based OTS Solicitors on 0203 959 9123 or complete the online enquiry form for a video call or telephone appointment.

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