These two agreements can appear to be similar but they actually confer very different rights and responsibilities to both the landlord (or licensor) and the tenant (or licensee).
A Licence to occupy merely gives the licensee the permission to occupy the land. The Licence is for a short term, usually between six and twelve months. The licensee holds partial possession of the property, as allocated by the licensor. They do not hold an interest in the property, though they still hold the power to maintain an action for trespass against a third party. They have a responsibility to maintain the interior of the property which they hold partial possession over.
However, a Tenancy Agreement creates an interest in the land for the tenant, for a specific or determinable length of time. The landlord will have far more responsibilities for the maintenance and upkeep of the property, and hold a high level of control over how the property is used. The tenant enjoys protection from several rights and responsibilities conferred by law, such as a tenant’s right to live in quiet enjoyment.
The clearest way to identify the difference between the two is exclusivity. If a tenant has exclusive use of at least one room in the property, and that room(s) is specified, this will usually be classed as a Tenancy Agreement. If the property is shared with more than one individual, this is more likely to be a Licence.
However, this is not an absolute rule. The form of the contract and intention of the parties is also considered when deciding which kind of contract is being used.
Whether you’re a Landlord or a Tenant, you should ensure that you know exactly which kind of agreement you are signing. If you are unsure or would like help with this matter, contact us for a no obligation discussion on 0800 999 8880.
Frances Jacobs is one of our Solicitors in Leicester, who are all experts in their fields and dedicated to quality client care. If you would like to find out more about our solicitors in Leicester please contact us.
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