When it comes to renting a property, there are two main types of agreements you may encounter: a licence to occupy or a tenancy agreement. While they may seem similar, there are some key differences you should be aware of before signing any legal documents.
What is a Licence to Occupy?
A licence to occupy is a legal document that grants someone permission to occupy a property for a specific period of time. Unlike a tenancy agreement, a licence to occupy does not create a landlord-tenant relationship. Instead, it is a contractual agreement between the property owner, or licensor, and the occupant, or licensee.
In a licence to occupy, the occupant has the right to use the property for a set period of time, but the owner retains control and can enter the property at any time. Licences to occupy are often used when the property owner doesn`t want to create a tenancy agreement, or when the occupant doesn`t require exclusive possession of the property (i.e. they may be sharing the space with others).
What is a Tenancy Agreement?
A tenancy agreement is a legal document that creates a landlord-tenant relationship. In this agreement, the landlord gives the tenant exclusive possession of the property for a specific period of time. The tenant pays rent in exchange for the right to use the property and must abide by the terms of the agreement, such as not damaging the property or disrupting the peace.
Tenancy agreements can be oral or in writing, but it is always recommended to have a written agreement to avoid any misunderstandings. Most tenancy agreements are for a fixed term (such as six months or a year), but some may be periodic (rolling month-to-month agreements).
What are the Differences between a Licence to Occupy and Tenancy Agreement?
The main difference between a licence to occupy and a tenancy agreement is the level of control each party has over the property. Under a licence to occupy, the owner retains the right to enter the property at any time, and the occupant does not have exclusive possession. In a tenancy agreement, the tenant has exclusive possession of the property, and the landlord must give notice before entering.
Another difference is the legal protections afforded to the occupant. In a tenancy agreement, the tenant has legal rights such as the right to quiet enjoyment, protection against eviction without proper notice, and the right to have repairs done in a timely manner. These legal protections may not be available under a licence to occupy, as the occupant does not have the same rights as a tenant.
Which is Right for You?
Whether a licence to occupy or a tenancy agreement is right for you depends on your specific needs and circumstances. If you only need temporary use of a property and do not require exclusive possession, a licence to occupy may be a good option. However, if you want the security and legal protections of a tenancy agreement, that may be the better choice.
In either case, it is always recommended to seek professional legal advice before signing any legal documents. This will ensure that you fully understand your rights and obligations, and can make an informed decision.