License agreement

[columbia76]

Some friends of mine have approached me regarding using a license agreement for new tenants that will be accommodated in a hotel of theirs. They already have 15 approx other properties that are on ast's. They have come to me as I used to work within Social Housing and mentioned that my residents were on License Agreements. This was fine within Supported Housing but as they are private landlords can the License Agreement apply to them also?

For the hotel they want to take in people on benefits that possibly would not be housed.

[Trenners]

Hi Columbia76,

The use of licence agreements in tenancies is a little grey (from a legal perspective) so you need to tread carefully!

If you are a RESIDENT landlord (that means you live at the same property as your tenants eg: tenants share your house) then you can create a licence agreement for your tenants. The main benefit of a licence is that the tenants have very very few rights - you can almost evict them at a moments notice - and this is not an unreasonable position given that they are living with YOU in YOUR home!

Some landlords use licences without living in the property - in the vain hope that they, too, can enjoy the flexibility of getting rid of problem tenants without needing to follow the laws associated with ASTS.

The main problem is that a licence assumes that the tenant does not have EXCLUSIVE use of a single room for the duration of the tenancy. When I check into a hotel - I do not have exclusive use of that hotel room as the manager can, at any time, ask me to move to a different room, and I have to move!

In tenancies, however, the tenant is usually given exclusive access to a specific room (or property) for the duration of the tenancy. You could decide to issue licences and switch tenants around different rooms on a very regular basis - this MIGHT overcome the licence v AST debate ...... but ........ If it looks like an AST, if it smells like an AST, ... then it is an AST (even if it says licence on the top of the document that the tenant signed. In other words - if things turn sour and the tenant takes legal advice - they will be advised that an AST has been created not a licence.

In summary, a lot of landlords use licences and don't get any problems ... but if the tenant won't pay or the tenant won't leave .... or both .... the law is going to be against you..... rather than with you !

Hope that helps

Mark