Types of Tenancy - Licences and Lodgers

A licence is where someone is allowed to occupy a property but does not have a tenancy. The owner's 'licence' or permission prevents the occupier from being a trespasser. Some of the protective legislation for tenants does not apply to licences.

The three main tests for a tenancy are:

  • exclusive possession
  • a fixed or periodic term
  • the payment of rent.

If these three factors are present, there will be a tenancy.

If the occupier does not have exclusive possession, i.e. they share facilities with an occupying owner, they will only be a licensee. The essential difference between a tenant and a licensee is exclusive possession. A person who has exclusive possession of residential premises for a definite period is a tenant unless exceptional circumstances exist. The rules around how much of the property they have to have exclusive occupation differ between Housing Act 1988 tenancies and non-Housing Act 1988 tenancies.

Other circumstances where a tenancy will not occur are 'serviced' accommodation where the landlord needs to have frequent access to cleaning and meals are provided, such as in a hotel, and where the occupier shares living accommodation with the landlord (here, the occupier is generally referred to as a lodger).

Excluded Occupiers

The Protection from Eviction Act 1977 protects both tenancies and licences. However, in some circumstances, certain tenancies or licences are known as an "excluded licence" or "excluded tenancy" if it is listed in section 3A of the Act.

Tenancies or licences excluded are not necessarily excluded from the entire Act but are excluded from some parts such as minimum notice periods and some court procedures.

Even when a tenancy or licence is excluded this way, it is always unlawful to evict a person by force from a dwelling they occupy.

Some excluded occupiers include where:

  • the dwelling is occupied by the landlord, and the occupier shares any accommodation with the landlord (lodger)
  • the licence or tenancy is to occupy the premises for a holiday only
  • the licence or tenancy is granted otherwise than for money or money's worth

See this page provided by Shelter for more information on excluded occupiers.

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