Licenses & Tenancies

A tenancy gives the tenant a legal interest in the land and property - in effect, legal ownership for the period of the tenancy. Tenancies can take several forms:

  • Rent Act or Regulated Tenancies - pre
  • Assured Tenancies
  • Assured Shorthold Tenancies (default)

A tenancy is an "estate in land", granted for a determined period of time ("term of years" or "fixed-term" - 6 months, 1 year, 21 years, 99 years etc), or a specific period (a periodic tenancy - yearly, monthly, weekly, even daily). In repect of an AST these are weekly, monthly or every 4 weeks [lunar], monthly. Others could apply but are not recommended due to the implications when dating the expiry of eviction notices

  • In return for the "time limited" but exclusive use and possession of the land (and any building/s on the land), the tenant pays their landlord a rent.

  • The landlord may be the freeholder (owner for life - life tenant) or a tenant themselves.

Freeholder (owner) Landlord grants tenancy to:

  • Tenant A (Head lease holder)
  • So long as each subsequent sublease is shorter than the previous one, then there is no problem. To all intents and purposes, whilst a tenancy is in force, the tenant occupier is the owner of the land and can act as any other owner would, so long as it's within the terms of their lease agreement and current statutory requirements (Acts of Parliament).

A license is different - it gives the "tenant" permission to occupy only. The tenant therefore

gains no interest in the property or land, merely a consent from the landlord to occupy for a period of time.

The grant of a license does not create an estate in land and the licensee does not gain an interest in the property, purely permission to occupy it. The tenant has very few rights. Many landlords issue a licence in an attempt to circumnavigate the law. In such situation a landlord exposes themselves to a claim for unlawful eviction - for the tenant is always afforded the higher protection in law.

A License in use

  • Stays in Hotels, Hostels, Lodgings (letting a room in your own home) on holiday.
  • Lettings, employees of a business living on the premises.
  • Some HMOs are on license agreements where services such as food, cleaning etc are ACTUALLY provided not just stated as being provided. This is what some HMO landlords do to circumnavigate the rules.