Lesley Henderson has been a landlord all her adult life and now runs a family business. She is also the author of the Landlord's Survival Guide.
There is a huge difference between a tenancy and a licence to occupy part of the landlord’s home. Where tenancies offer limited security, licences offer virtually none. Nevertheless, they can and do work really well and continue to be tremendously popular. How you occupy determines whether or not you’re a tenant or a licensee. No landlord who lives elsewhere (i.e. in a nice safe house up the hill) can offer a license and it be genuine. These arrangements exist for resident landlords who live in the same building as their licensees.
Genuine licensees have living arrangements where their landlord has specified they need unrestricted access to every room in their property, for services like weekly cleaning and who live alongside their paying occupants.
Although not strictly in the remit of this guide, because situations overlap so much I shall give some general information on licensing/ lodging arrangements. This is an increasing rather than decreasing phenomenon. Many people with hefty mortgages take in someone to help with costs. In order to make this work, landlords can’t be expected to have someone whose lifestyle is inconvenient claiming security of tenure for months on end – it’s just too invasive. Most licences can legitimately be closed down by landlords within a week.
There’s rarely anything much by way of paperwork with these arrangements, but they work. Lodgers or licensees live in happy coincidence with landlords up and down the country. Many live there during the week and return to family homes at weekends. Many share meals with families. It can be an extraordinarily expedient way to live for lots of people. What it doesn’t offer is much security.
Could my licence actually be a lease?
Possibly. Many people bought up large properties when prices were cheap and still offer them out for rent. They don’t live on the premises – many only visit to collect rent. Facilities like kitchens or bathrooms are shared. Yet they continue to insist to tenants that they are offering licenses with no security.
Anyone asked to leave arrangements like this at short notice should quibble. You are probably a tenant – with the security that offers – whatever your landlord insists. Calling by each week to collect rent and to throw a few eggs and bread in the fridge doesn’t cut it. Licences are actually quite hard to create and it takes more than the ingredients for eggs on toast to remove someone’s genuine security.
If the landlord doesn’t live in the same building (and I don’t mean a separate flat downstairs either) what matters in law is what is happening on the ground. By paying anyone money for accommodation you are creating either a licence or a tenancy. Indeed, if a document claims one arrangement, but how you live contradicts that paperwork, then court decisions will be based on how you live, not what a piece of paper pretends to have offered. Even when no paper changes hands, again the oral tenancy may apply.
Has a tenancy been created?
If your landlord doesn’t live on the premises, or owns a number of buildings filled with occupants, as is common, she or he will very often have offered a licence or lodgings, but may easily have inadvertently created a tenancy. This may be a genuine lack of knowledge on their part, or a deliberate attempt to reduce your rights. If you have exclusive use of any part of any property, for example, your own room that no one else enters, or if you have been given any specific length of time which you can occupy the building, you are very much more likely to have a tenancy than a licence.
It may be that when you came to view the room the ‘landlord’ said something along the lines of, ‘oh, I don’t bother with all that paperwork stuff. Everyone here gets along fine. No need to make anything too official. If people aren’t happy, they just move on.’ It’s like buying a car without a log book. If you still want that room, because you like it, or because it’s cheap, take it by all means. But once you are settled, quietly find out where you stand legally.
If your landlord insists that you have a licence not a tenancy,
ask yourself the following questions.
- Do you occupy part of a converted house, e.g. a flat or bed-sit, within a building where your landlord or another member of his family lives? This may be a licence.
- Do you have a fixed term that you are obliged to stay for (e.g. six months? You may well have a tenancy.
- Do you share any facilities with your landlord, for example bathrooms, or kitchens? If so you may have a licence. If your sharing only applies to corridors or entrances, and you have exclusive use of some part of the building, you may have a tenancy.
- Are you provided with any services by your landlord? For example, are they or their staff able to enter your room on a weekly basis to clean? If so, you may have a licence. If, however, you basically look after yourself, and landlords empty the rubbish, or provide clean sheets each week, you may have a tenancy.
- Do you have exclusive use of any part of the building, into which no one else ever comes? (Even if your landlord lives downstairs this can offer you slightly more protection.) You may have a tenancy.
Perhaps it is easier to explain in the following way. If you live in a student hall of residence, with cleaning and catering, you usually have a licence. If you live in a hotel where staff clean and cater, you have a licence. Try to apply these criteria to your own circumstances. If they are a close match, and your landlord or a member of their family lives in the same building, you may very well have a genuine licence. This is however one of the most controversial areas of law and if you think that your circumstances don’t seem to match these, talk to someone who can advise you. Tenants with little money may even be entitled to Legal Aid.
In conclusion it might be added that while no one wants to advise anyone to endlessly confront the management, to offer licences simply to deny people what are already very limited rights is hardly a position anyone should want to encourage. Assured shorthold tenancies offer very considerable safeguards in favour of landlords, but every form of earning one’s income carries a small degree of risk and being a landlord is no exception. To offer licences as a device to try removing what little security tenants actually do enjoy may seem to many people (both inside and outside the industry) to be a bit unreasonable.
There’s still a uniquely UK attitude towards being a tenant that permeates every tier of rentals. A smugness that some acceptable social level is only reached by owning property. The truth is that the rentals market is top heavy with highly educated, hard working, intelligent and responsible people, holding down excellent jobs. They pay astonishingly high rents and behave with surprising tolerance towards a management system that often fails to treat them with the respect they’re jolly well entitled to.
Some frankly medieval attitudes where landlords/agents try to ‘lord it’ over tenants (and the ‘title’ doesn’t help much either) should have gone out with tithes. Don’t accept patronising attitudes, broken agreements, overcharging, under-servicing or indifference to legitimate requirements or concerns. Tenants are equal parties to this legal contract. Tenants are also customers not chattels. Without their money, landlords and agents couldn’t make it through the shortest fixed term going.
If you are signing a lease on any property here are some sensible tips.
- Read it – you would be amazed how few people do – and preferably before you sign it!
- Work out how long you will need to live in the property and try to negotiate the most convenient lease length that you can. Try to maximise the fixed term if you are certain you want to live there for a certain length of time. If you don’t think you want to stay long, try to negotiate the shortest fixed term available. If all else fails, try for a break clause.
- If you only need to rent for three months, try not to take a lease for six; the likelihood is that you will end up paying through the nose for the privilege.
- If you are being asked to sign a licence agreement, get it checked out at some time. You may have accidentally just been offered a tenancy.
- Don’t sign anything that worries you. Unreasonable clauses need to be deleted, not agreed to and optimistically ignored.
- Observe all the clauses in the lease you agreed to sign, not just those you like.
- Keep all your documentation safe.