What is the difference between a tenancy and a licence

An important factor in distinguishing between a rental agreement and a license is whether the user has the property exclusively. Subject to different facts from one case to another, the law generally accepts that the granting of exclusive employment the user may occupy the property exclusively and privately creates a lease agreement for a period of time for periodic payments.

Basically, there are three ways to do what is in accordance with the law and protects the interests of the owners. The two most common methods are leasing and licensing. The third, less common option is to create a rent-to-veut. Because of this, license agreements are primarily used for shorter-term agreements involving storage, office, and small-scale retail spaces. To understand if you are dealing with a license or a lease, how the contract is presented is another aspect that may determine the issue.

A lease usually requires an oral or written agreement between the two parties involved. Such an agreement should include the following information to be complete:. Licenses, on the other hand, do not always need a written agreement to be binding. In fact, a license can be conferred upon a party without either party ever meeting. For instance, if you buy a ticket to a sporting event, the purchase of that ticket is giving you license to enter a sports venue and use a seat in that venue for a predetermined period of time.

Having a roof over your head and the ability to generate income for food are seen as basic rights. The bottom line is that you can call your arrangement a licence or nothing at all , but if it looks like a tenancy, the Court will treat it as a tenancy. If it is judged to be a tenancy, the landlord has a deal where he or she has lost the majority of his or her rights, but one where the tenant has lost none.

In law, there is no real difference between the meaning of the words "lease" and "tenancy". However, Acts of Parliament relating to residential occupancy tend to use the word "tenancy" and those regulating commercial occupancy use the word "lease". So we talk about residential tenancy agreements and business property leases. The difference between a tenancy and a licence is largely about the term "exclusive possession".

From that simple start it has become increasingly complicated. But let us move on to explain the practical effects of this mountain of law. A sensible start is to accept that if you want someone to pay you for living in your house, your deal will almost certainly be a tenancy and not a licence. The law says it is a tenancy unless you can show that it is a licence.

If a conflict arises, the Court will start with the assumption that your deal is a tenancy. It is up to you to prove it is a licence. If you fail, then your problems have begun.

You will have created a common law tenancy, so cannot take advantage of the assured shorthold tenancy AST provisions. As with all notices it is very important to make sure that the notice is validly served, that proof of service is obtained and that the signed notice is kept safe with the signed counterpart lease. In addition the notice must be acknowledged in writing by the tenant by way of a signed declaration and the lease must include provisions which exclude sections 24 and 28 of the LTA Landlord and Tenant Act, with reference to the notice and declaration.

There are some exceptions to this including mining leases and agricultural premises. The Act does not protect leases of under 6 months, which have no provisions for renewal. Save my name, email, and website in this browser for the next time I comment. Landlords expected to waive rent debt for commercial tenants in trouble. Courts to roll out new video hearings service for eviction cases…. How mediation helps landlords reclaim rent. Ten top tips for better tenant management.

A lease A lease grants the occupier an interest in land — a legal title, albeit a time limited one. Can Brexit frustrate a lease? Conditions of a Commercial Property Lease Explained. Please enter your comment! Please enter your name here.