The tenancy trail

Answer:

This is not a tenancy but a license. The occupant (or licensee) will not have the protection granted to tenants, and his rights are more limited.

Members will find an article about residential licenses  here.

Occupiers who pay no rent

Note that if the occupier pays no rent (and there is nothing that could be deemed to be ‘money’s worth) then this cannot be a tenancy as rent is an essential element of a tenancy.  However, this may be a hard test as the old rules about ‘peppercorn rents’ show that even if the occupiers only give you something which has little financial value – this can still be sufficient to create a tenancy.

If, for example, you wish to evict someone who is living in your property without paying rent but who is not a squatter – as they entered with your permission – you should get some professional legal advice before taking any action.

Licenses and sham licenses

Note that landlords, often in HMOs and particularly in ‘rent to rent’ situations, will often tell occupiers that they have a license when in fact, in law they have a tenancy.  These ‘sham licenses’ are unlawful and there have been successful prosecutions based on this.

The key thing is whether the tenant has ‘exclusive occupation’.  Even if the agreement provides for the landlord to be entitled to enter, eg to provide cleaning services, if in fact this is never done, then the occupier will have a tenancy.  This was settled in the landmark House of Lords decision in  Street v. Mountford in 1985.

Lodgers

Where the occupier shares living accommodation with his landlord, he is generally known as a lodger. Other types of licensees include people living in hostels, bed and breakfast accommodation, and (sometimes) property guardians.

You will find out more information about lodgers on our website  Lodger Landlord.

You can also purchase a lodger agreement there.  If you are not a Landlord Law member and require telephone advice on a lodger related matter  click here.

Landlord Law members can ask questions in the forum and will find a lodger agreement available on the Documents and Forms page.