Licence to Occupy / Lodger Agreement


A. Licence to Occupy

 

A Licence to Occupy gives the licensee the right to occupy property for a defined length of time. A licensee has only a personal interest and this interest can be revoked by the landowner at any time. This is a normally a short term arrangement which can be used in domestic (e.g. AirBnB) or commercial (e.g. WeWork) context. It can be in favour of the Licensor / Licensee / neutral.

 

B. Lodger Agreement

 

A lodger agreement is a type of licence which would allow landlords (or even tenants) in furnished houses or apartments to rent a room and share the common parts of the property (such as bathroom, toilet, kitchen, and living room) with the tenant. A tenant must obviously check the terms of the original lease agreement to ensure that one is permitted to sublease to the sub-tenant before doing so. Many people would get into an informal lodger arrangement with a friend without any documentation. However, it is always recommended that the arrangement be put in writing to protect both the landlord and tenant should any disputes arise.

 

 

IN MANY JURISDICTIONS, IT MAYBE ILLEGAL TO LET DOMESTIC PROPERTY ON A DAILY BASIS WITHOUT A LICENCE. YOU MAY WISH TO CHECK WITH YOUR LOCAL LAWYER.

 

Differences between a lease/tenancy and a licence: 

 

The main difference between a lease and a license, legally, is that a lease creates an interest in the land but a licence merely gives you permission to use the property. A licence to occupy is a legal agreement between the licensor (the part who owns the property) and the licensee (the seeking to occupy the property), giving the licensee the right to occupy the property for a defined length of time. A licensee has only a personal interest and this interest can be revoked by the landowner at any time.

 

There are a few advantages of entering into a tenancy of will for a licensor. Firstly the licence is for non-exclusive possession, he therefore can let to several different businesses under separate agreements. Second is that occupation is on a short-term basis. The licensor is therefore not committed for a long period of time but instead is able to make a temporary arrangement. However, the main purpose of granting a licence to occupy a business is to avoid "security of tenure" in many jurisdictions (legal protection afforded to tenants under legislation against arbitrary rent increases and landlord's attempts to repossess the property through eviction). 

 

One important point to note is that there are many cases where a document has been stated to be a lease but in fact is found to be a licence and vice versa. The label put on the document is therefore indicative only and not conclusive.

 

Below are some of the documents available on DocPro:

 

Documents

When to Use

Licence to Occupy - 
Residential 

Licence giving the licensee the right to occupy domestic property for a defined length of time. A licensee has only a personal interest and this interest can be revoked by the landowner at any time. This is a short term (Airbnb type) arrangement. It can be in favour of the Licensor / Licensee / neutral. 

Licence to Occupy - 
Commercial 

Licence giving the licensee the right to occupy the commercial property for a defined length of time. A licensee has only a personal interest and this interest can be revoked by the landowner at any time. This is a shared office arrangement. It can be in favour of the Landlord / Tenant / neutral.

 

Keywords:

Lodger Agreement, Licence To Occupy, Lodger Agreement Template

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