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Advice4Renters (A4R) provides through legal advice services for tenants and they have put together a short guide to help tenants better understand the contracts they are signing.

Licence to Occupy or shorthold tenancy?

The important thing to remember is that the status of the place you rent is determined by the nature of the letting, not just what your landlord tells you it is.  So, if you are given an Agreement that says Licence, you may still have a tenancy.  What’s the difference?

The crucial thing that defines a tenancy (in addition to a liability to pay rent at regular intervals) is ‘exclusive possession’ of at least part of the premises.  For example, a tenant may need to share a bathroom or kitchen with other tenants, but if they have their own bedsit, which other people (including the landlord) should not enter without their consent, they have a tenancy. A tenancy gives the tenant a legal interest in the property.  They have certain rights, such as the right to demand that the landlord carries out structural repairs. Most tenancies are assured shorthold tenancies.

A licence is simply the landlord’s permission to occupy, in the same way that buying a cinema ticket gives you a licence to occupy a seat for the duration of the film.

Most lettings do afford exclusive use, so most are tenancies.  Remember, though, that even if you have a genuine Licence, for example if you are in a hostel, the landlord cannot force you to leave without serving a Notice to Quit giving at least four weeks’ notice, and if necessary, applying for a court order.

Note that there are different rules if the landlord lives in the same house as you.  The law is complex, so it’s always best to seek advice. You can find out more from .

If you given a License to Occupy agreement by your landlord Rip Off Britain expert solicitor Gary Rycroft says "If a new renter is given a Licence to Occupy (LTO) rather than an AST the document should not be signed. However, if an LTO is given and signed, the law may still say that the LTO is in fact an AST. This is because the law provides that if an agreement to rent  a property is called an LTO but has all the qualities of an AST then it is in effect an AST; if it looks like a duck & walks like a duck, then it’s a duck, no matter what anyone else may call it!

If you are given an LTO instead of an AST you should ask for an AST. If this is denied to you you should consider not signing up unless you are willing to take the risk of it being difficult to get your rent deposit back and being put on short notice to move out.

There are circumstances where it is appropriate to have an LTO, such as where a landlord is sharing his or her own home with a lodger. Or it may suit a tenant to have a short term (less than 6 months), flexible and insecure arrangement where the landlord and or tenant may give short or immediate notice to vacate.