Licence to occupy

A licence to occupy is a consent from the owner of a property (a licensor) for a third party (a licensee) to occupy a property. A licence to occupy does not grant exclusive possession of a property, does not amount to an interest in land and is personal to the parties. There is no intention between the parties to create a relationship of landlord and tenant which differentiates it from other types of tenancies and a lease. The usual statutory protection afforded to tenants under residential tenancies and leases does not cover a licence to occupy. 

The Protection from Eviction Act 1977 is an example of legislation that may afford some protection to licensee’s (depending on the circumstances). Section 2 of this Act states that

“if any person unlawfully deprives the residential occupier of any premises of his occupation of the premises or any part thereof, or attempts to do so, he shall be guilty of an offence unless he proves that he believed, and had reasonable cause to believe, that the residential occupier had ceased to reside in the premises”.

Section 1 defines a ‘residential occupier’ as;

“a person occupying the premises as a residence, whether under a contract or by virtue of any enactment or rule of law giving him the right to remain in occupation or restricting the right of any other person to recover possession of the premises". 

A licence to occupy is usually granted for a short period of time, usually 6 months or up to 12 months. They can be for a fixed period or periodic.

The ability to terminate a licence to occupy is dependent on the provisions included in the licence itself.  

Case law demonstrates that even if a document is labelled a “licence”, where the actual agreement and circumstances surrounding it suggest that it is a “tenancy” or “lease” then courts are willing to interpret it as a tenancy or lease.