What is a licence to occupy?

The question of whether a letting is a tenancy or a licence is critical to understanding your requirements when managing the property.

As the below guide makes clear, almost all lettings in England and Wales will be tenancy agreements rather than a licence to occupy but there is good reason for landlords to be aware of the distinction. Most legislation that affects the private rented sector is concerned with the regulation of the various forms of tenancy agreement, so if you do have a licence to occupy you will not be affected by much of the PRS legislation. 

Conversely, if you think you have a licence but actually have a tenancy agreement you may be subject to serious penalties if you don't comply with the tenancy agreement rules. 

Ryan Heaven, consultant solicitor for Woodstock Legal Services, provides an explanation of the difference between a licence and a tenancy agreement and how you can identify what type of agreement you have.

Please note that this guidance from Woodstock is only applicable to England. In Wales, most licences have to follow the requirements set out in the Renting Homes (Wales) Act 2016 so there is little practical difference between licences or tenancies.