Terminating Licences to Occupy Residential Property: A Legal Guide

When it comes to residential property, distinguishing between a tenancy and a licence to occupy is crucial. A licence to occupy grants the individual the right to use the property on a short-term and non-exclusive basis, which is fundamentally different from the rights and obligations associated with a tenancy. Understanding this distinction is key, especially when considering the termination of such an agreement.

The following table provides a summary, but the distinctions are set out in detail in our blog titled ‘Is it a Licence or a Tenancy Agreement?’.

How Do You Terminate a Licence?

How you terminate a licence depends on the type of occupier you are evicting—whether they are protected licensee or an excluded occupier—and the reason for terminating the licence, such as a breach of terms of the licence agreement or the end of a fixed term.

Types of licensees

1. Protected licensees

A protected licensee is someone who does not share any accommodation with the landlord and who pays rent or provides services in lieu of rent. For instance, a licensee who rents a self-contained unit or a guest in a bed and breakfast establishment may fall under this category.

This type of occupier enjoys protections afforded by the Protection from Eviction Act 1977 (“the 1977 Act”). This means that a notice must be served in line with the terms set out in the licence agreement if there is one. In the absence of an agreement, landlords must serve a notice giving a notice period of not less than 28 days unless the licence has been breached by the occupier.

Following the expiry of the notice, landlords much commence a possession claim at court and obtain a court order if the licensee does not vacate the premises voluntarily.

2. Excluded Occupiers

Under Section 3A of the 1977 Act, certain occupiers are classified as “excluded occupiers”.

The full list of excluded occupiers can be found here and includes lodgers (individuals who live with their landlord and share living space), former trespassers granted temporary rights to occupy, and individuals renting holiday lets for instance.

Furthermore, licences that require performance of services in lieu of rent or do not require the occupier to pay rent are also considered excluded. Individuals staying in a property while it is on the market for sale, or a friend or a family member who is staying in the property rent-free, or property guardians (occupiers who live in a property to maintain and secure it during vacancy periods) tend to fall within this category

As excluded occupiers have fewer protections, the landlord is only required to give a reasonable notice which can be as short as the rental period (e.g. a week if rent is paid weekly). Further, landlords do not need a court order to evict excluded occupiers. As such, upon the expiry of the notice, landlords can change the locks to secure the property. However, landlords should exercise great caution and must not use violence or force physical entry when changing locks. If there is any evidence of violence of forced entry, this may result is a claim for unlawful eviction and harassment against them.

Grounds for termination

There are several grounds on which a licence to occupy can be terminated. These can be specified within the licence agreement or arise from common law principles. Some of the most common grounds are:

• effluxion of time at the end of the fixed term of the licence;
• breach of condition or clause of the licence agreement; and
• through agreement of both parties.

What Are the Special Considerations for Student Accommodation and how can you terminate the agreement?

Student accommodation in Halls often operates under licences to occupy, providing flexibility for both students and educational institutions. However, there may be instances where a licence needs to be terminated, and it’s important to understand the legal considerations specific to this sector.

What are the Key Features of Student Accommodation Licences to Occupy?

• Protection from Eviction: as protected licensees, students are protected from unlawful eviction and harassment under the 1977 Act. They may also be protected under the University’s specific regulations that provide further protections, including grievance procedures and support services.
• Academic Year Duration: the licence is often aligned with the academic year, typically lasting nine to twelve months. However, the licence agreement may contain specific clauses in relation to the duration of the licence.
• Status Tied to Institution: the licence agreement may be tied to the student’s status at the educational institution, with provisions for termination if the student withdraws or is expelled.
• Inclusive Agreements: the licence agreement may include utilities and other services, reflecting the all-inclusive nature of student housing.
• Non-Exclusive Possession: as with other licences, student licences do not confer exclusive possession, allowing landlords to enter the premises for maintenance and inspections.

How Do You Terminate a Licence to Occupy in Student Accommodation?

Terminating a licence to occupy in student accommodation follows a similar process to other licences but requires additional considerations. As a guide, student accommodation providers should carry out the following steps:

1. Review the licence agreement: ensure the agreement clearly states the conditions under which termination can occur, including notice periods and specific grounds for termination.
2. Follow institutional policies: if the accommodation is provided through a university or college, ensure compliance with institutional policies and procedures.
3. Provide written notice: give written notice to the student, specifying the reason for termination, the effective date, and any required actions such as vacating the property.
4. Commence a claim at court following expiry of the written notice.

Further, providers of student accommodation should also consider the impact on the student’s academics and be mindful of the academic calendar. As good practice, providers of student accommodation should avoid terminations during exam periods unless necessary.

Practical Tips for Student Accommodation Providers

• Clear communication: maintain open and transparent communication with students about their rights and obligations.
• Support services: provide access to support services, such as legal advice and counselling, particularly in cases of termination.
• Fair practices: ensure termination practices are fair and justifiable, avoiding any actions that could be perceived as discriminatory or unfairly disruptive to the student’s education.

Terminating a licence to occupy residential property involves understanding legal frameworks, following proper procedures, and maintaining good communication. By being well-informed and prepared, landlords can navigate this process smoothly and minimise the risk of disputes.

For further guidance on licences or other housing and property disputes, contact our expert Housing team at mail@anthonygold.co.uk or on 020 7940 4060.