Tenancy or licence to occupy?

Two of the most confusing terms regarding room to rent are ‘tenancy’ and ‘licence to occupy’, and what situation falls under which heading. There are different rules for both of these terms, so it is important to know the difference and which term applies to which situation. Fortunately the T1property team can help. We are one of the best for room to rent Portsmouth has to offer and our extensive experience has helped us to understand difficult terminology and different legal situations.

Tenancies:
A tenancy is when a landlord gives the tenant legal ownership of a part of the property for a specific time period. As a result, the landlord cannot enter a room/rooms without first obtaining permission from the tenant and giving the tenant 24 hours’ notice. Effectively, the landlord gives a piece of the property to the tenant in exchange for a right to receive rent each month. The ownership will only revert back to the landlord at the end of the tenancy, if this is not renewed.

Licence to occupy:
A licence to occupy is different because it does not include any access restrictions. There are several reasons why, in this case, access has not been restricted, such as providing cleaning services, or requiring access to all of the property for maintenance issues, etc. If providing these services can’t be limited to a specific time of day and full freedom of access is needed at all times, the agreement between the landlord and whoever is living in the property will be classed as a licence to occupy, rather than a traditional tenancy.

Another criterion of licences to occupy is around mobility. If a landlord has the ability to move the occupant(s) of the property from room to room, with no repercussions, then this is a licence to occupy rather than a tenancy.

There are a number of specific situations when a licence to occupy would be preferable to a tenancy, (for the landlord and occupant) for example: employees who live in-house, such as nannies or housekeepers. Surprisingly, if you live on a houseboat, your agreement is also classed as a licence to occupy, as tenancies only apply on land.

At T1property we understand how these two terms could become confusing, however, we are here to help and provide a full range of support via our dedicated team. We specialise in HMOs, even though this type of property can be more challenging than traditional buy-to-let arrangements, due to the increased rental returns for the landlord.

If you would like some more help or advice from a specialised team for room to rent Portsmouth, contact us today to find out more.