Dealing with Death Kit – Section 2-2
What is a residential license?
A residential license is a contractual arrangement between the landlord and the occupier which means that the occupier is not a trespasser.
It is personal between the parties and cannot survive the death of either of them.
Is a residential license really a residential license?
Unlike what is sometimes taught in ‘get rich quick’ courses, it is actually not that easy to create a residential license. Generally, if someone starts to occupy a property at a rent, the default position will be that it is a tenancy. The test is – what is the actual situation rather than what is written on the paperwork signed by the parties.
The 1985 House of Lords case of Street v. Mountford (explained on our legal cases page here) held that in the majority of situations, if the occupier has ‘exclusive occupation’ of the dwelling and pays rent – this will be a tenancy. Irrespective of what might be written on any paperwork signed. As people cannot override the law.
However, there are some situations where a license will be the default position and/or where a license can properly be created:
Lodgers
This is where someone rents a room in someone’s home and shares living conditions. It is technically possible for a lodger to have a tenancy, but this would be unusual. Find out more about this on our Lodger Landlord website.
Hotel rooms
Here, in most cases, the hotel staff will have access to change the bed linen and towels and do the cleaning so the guests will not have ‘exclusive occupation’. There is also the fact that they are renting the room as hotel accommodation rather than as a home.
Accommodation on boats
It’s not possible (currently) for there to be a tenancy of a boat as a boat is not ‘land’.
See the case of Mew and Anor v. Tristmire Ltd.
Shared rooms / dormitories
This situation cannot create a tenancy as the occupiers do not have ‘exclusive occupation’ of the room.
Service accommodation for employees
This is where an employee is required to live on the premises as a condition of their employment (rather than just receiving low-cost accommodation as a ‘perk’).
Some situations where this happens are;
- Caretakers
- Live in nannies
- Gamekeepers
Charities
This varies, but generally, if someone is living at accommodation because they are a beneficiary under a charity, they will not be a tenant.
This was the situation in Gray v. Taylor where Mrs Taylor lived in an almshouse under a charitable trust.
Serviced accommodation
This is where a landlord will seek to deliberately create a residential license by providing services. For example, this could be:
- Cleaning
- Providing and changing bed linen and towels
- Accepting deliveries while the occupier is out and putting them in the room or flat. This could include putting away groceries.
Genuine serviced accommodation is generally high-end and expensive. Note that, per Street v. Mountford, if the landlord ‘agrees’ to provide services so as to create a residential license but does not actually provide them, this would normally create a tenancy.
Agreement providing for your right to move occupiers to a different room
This is another way that, technically, a landlord could create a residential license. This is sometimes done with property guardian agreements. However, it will only ‘work’ if there is a genuine chance that the occupiers will actually be moved sometimes, along with a genuine reason for doing this.
Just having the clause in the agreement for a situation where in reality, the occupiers are never moved, will simply create a tenancy.
In the next section, we take a look at ‘sham licenses’.
