Part 1 - Background Law

Tenancies and licensees

Whether you are a landlord or a tenant, your legal rights (in England) will depend on the occupation type you have.

There are two main types:

• Tenancies, and
• Licenses

A tenancy carries more rights and is a type of ownership of land or lease. It will continue after the death of the landlord or the tenant.

A license is just a personal agreement between the parties and will end on the death of either.

Note though that in law most occupation will be under a tenancy – unless services are provided where staff enter the rooms let (as in a hotel), or the occupiers are sharing with strangers (as in a hostel dormitory).

Sham licenses

It is not unknown for landlords to get occupiers to sign ‘license agreement’ forms when, in fact, they have a tenancy. This is illegal and landlords who do this can be prosecuted for giving ‘sham licenses’.

Different types of tenancy

If the occupation is a tenancy, it will normally (in England) be an assured shorthold tenancy, which is regulated under the Housing Act 1988.

However, in some circumstances, for example, if the tenant is living in self-contained accommodation in the same building where the landlord lives, or if the tenant is a limited company, the Housing Act will not apply, and they will be unregulated ‘common law’ tenancies.

Tenancies which started before 15 January 1989 will be ‘protected tenancies’ under the Rent Act 1977 and tenants have greater rights. We will be looking at protected tenancies in a later part of this course.

Law in Wales

Note that in Wales, the law was changed when the new Renting Homes (Wales) Act 2016 came into force on 1 December 2022. This provides that, so far as is possible, most tenancies and licenses are to be treated the same. Tenancies and licenses that come within the Act and are regulated by it are known collectively as ‘occupation contracts’.

However, there are some exceptions set out in Schedule 2 of the Act, which include lodgers and holiday lets.

Fixed-term and periodic tenancies

Tenancies are normally granted for a ‘fixed term’, ie a specific period of time such as six months or a year. After that, if no replacement fixed term is signed, and the tenants remain in occupation, a new ‘periodic’ tenancy will arise. This will either be

• A statutory periodic tenancy – for example under s5 of the Housing Act 1988, or
• A contractual periodic tenancy – when the fixed term tenancy agreements specifically provide for the tenancy to continue as a periodic if the tenant has not moved out by the time the fixed term ends. The advantage of this is that you can specify what the period will be (normally you will want monthly periods) and the rules regarding Council tax are more favourable to landlords.

In Wales, things are dealt with differently as the terms of the contract are largely prescribed by regulations. If no new fixed-term contract has been signed and the tenants remain in occupation, a new periodic contract will arise at the end of the fixed term. However, the terms will change unless a provision has been made for this in your fixed-term contract.

We will be discussing this later in the course.

Note that in all cases, a fixed-term tenancy will end automatically at the end of the fixed term. Neither the tenant nor the landlord can prevent this, and tenants do not need to give notice. A periodic tenancy will only arise if the tenants are still in occupation the following day.

Tips and Practice points

• Make sure you know what tenancy type you have as it will affect your legal rights, in particular as regards eviction and the rules for increasing rent
• Never try to create a license when the occupier normally has a tenancy without first obtaining legal advice from a solicitor. It’s not impossible to do, but it must be done in the correct way. Most successful licenses are for high-end English ‘serviced accommodation’ where cleaning and other services are provided.

How to find out more

Free resources:

• The free Landlord Law tenancy trail will help you work out which tenancy type you have.
• The Landlord Law Quick Guide on Occupation Types (note that most of the content linked from the guide will be members only)
• YouTube video on Seven Things to watch out for with Company Lets
• For the law relating to lodgers see my free Lodger Landlord website.

Landlord Law members:

• Training webinar recording on background law
• Training webinar recording on Leaseholder Landlords
• FAQ:
• Short lets – can an assured shorthold tenancy be for less than six months?
• What are the differences between fixed-term and periodic tenancies in England?
• What is a periodic tenancy?

This is just a short selection from the Landlord Law content on background law. You will find more on the topic page and the Landlord Law Wales page.

The next part of this course looks at what you need to do before you rent.