Licence to Occupy

[Adrian]

Having finally got rid of the last nightmare tenants who had driven out my other tenants, I am looking at ways to improve my management before taking in new tenants. The house has 6 rooms with own kitchens and showers but shared bathrooms.
I shall obviously be improving my tenant referencing, deposits, guarantors etc but, despite that last time, we got into a mess.
If I retain the right to move them to a different room and the right to access for maintenance at any time, I understand that they will have a licence, not tenancy.
My question is how exactly that differs in respect to eviction should they choose to not pay rent. I understand that I can go to court without waiting for 8 weeks arrears etc but is the process otherwise the same? - if so could someone point me to the relevant notices etc that need to be served, please.
I am happy to be a good landlord to those that are happy to be good tenants. We look after them well, but after a horrendous experience I feel the need for a bit more leverage in the worst case scenario. Does a licence actually achieve that?
I read a licence where the landlord was a company that was resident at the same address. Does that make the licence excluded or am I pushing my thoughts just a little too far in that direction?!
Many thanks

[jeffrey]

If the contract creates a genuine Licence to Occupy, the 1988 Act will not apply so nor will its Notice procedures/periods/timescales.

[Lawcruncher]

If you do succeed in setting up an arrangement that is a licence to occupy, the Protection from Eviction Act 1977 will still apply. You will need a court order to get the occupier out.

The key thing though is whether you can set up genuine licences to occupy. When it comes to residential occupation the law affords some degree of security to tenants. A court will always look very hard at an arrangement that seeks to remove that security to see if it is what is referred to as a sham. If the sole reason for the arrangement is to remove the security it is likely to be deemed a sham.

Let's look at what you propose. You have six occupiers in six different rooms and each is subject to your right to change rooms. What useful purpose does this serve? In practice none. The sole reason (and of course we know it is the sole reason because you have told us so) is to remove the limited security a tenant has. It is going to be a sham.

Either you are letting rooms to tenants or you are running a boarding house. There is not really anything in between.

[Adrian]

Thank you Jeffery and Lawcruncher,
I take all your points on. Thank you for pointing to the Protection from Eviction Act. Having now read it with the requirement for 4 weeks notice even for a licence, I am not sure it actually gets me to where I wanted to be anyway!
My understanding was that university rooms are often let on a licence and wonder what practical purpose that serves as well. I guess the answer is the ability to move people around to allow redecorating etc though I would have thought that was largely done during uni vacations.
Looks like it might be the boarding house for me! Still intrigued by the prospect of a ltd co owner being resident and the tenants being lodgers and therefore fully excluded!

[Lawcruncher]

Lettings to students by certain educational establishments are specifically excluded from being ASTs.

[jeffrey]

Lettings to students by certain educational establishments are specifically excluded from being ASTs.
Yes. Paragraph 8 of Schedule 1 to the Housing Act 1988 says so, as follows:

8. Lettings to students
(1) A tenancy which is granted to a person who is pursuing, or intends to pursue, a course of study provided by a specified educational institution and is so granted either by that institution or by another specified institution or body of persons.
(2) In sub-paragraph (1) above “specified” means specified, or of a class specified, for the purposes of this paragraph by regulations made by the Secretary of State by statutory instrument.
(3) A statutory instrument made in the exercise of the power conferred by sub-paragraph (2) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

[Adrian]

Thanks again, Lawcruncher and Jeffrey, I bow to your great knowledge!!
Slowly calming down and considering sensible options - ie mostly : DOING IT PROPERLY!
But just before I give up on the idea, I note you still haven't addressed my ltd co option - see - http://www.regency-rentals.co.uk/downloads/Licence%20Agreement%2064%20Russell%20Terrace.pdf - any comments?
Regards,
Adrian

[jeffrey]

Thanks again, Lawcruncher and Jeffrey, I bow to your great knowledge!!
Slowly calming down and considering sensible options - ie mostly : DOING IT PROPERLY!
But just before I give up on the idea, I note you still haven't addressed my ltd co option - see - http://www.regency-rentals.co.uk/downloads/Licence%20Agreement%2064%20Russell%20Terrace.pdf - any comments?
Regards,
Adrian
As a limited company- by definition- cannot occupy, a letting to it cannot be an AST. Its own sub-letting can be, however.

[Lawcruncher]

I missed the part about a "resident" company. Companies have a bit of an odd position in law. They are incorporeal, that is they have no body. You cannot see a company. Companies only exist at all because the law created them. Because it would otherwise create problems, we have to have the legal fiction that companies can occupy property. They do not do so in any literal sense. A company cannot go upstairs to bed or kiss its wife goodbye at the front door in the morning. Accordingly, I do not think that a company can ever be said to "reside" in a property and certainly not in the sense that it can be a resident landlord for the purposes of any legislation relating to domestic property that affords privileges to resident landlords.

Any notion that you can drive a coach and horses through legislation designed to give protection to tenants of residential property by making a company a resident landlord is doomed to failure. It was thought up by someone too clever for his own good.

[Bel]

Interesting thread.

As well as a LL wanting to have more control of bad tenants, another problem must be tenants leaving without notice, and not knowing if they intend to return or not. HMO's are notorious for high turnover

WOuld it be possible to draft(without falling foul of the law) in a room tenancy agreement which requires tenants to only give the LL a weeks notice to quit, that
if rent falls into arrears of 1week and all clothing/possessions removed without written notification that T intends to return, that this will be interpretted as an act of surrender?
(the room would need to be "cleaned" weekly so that LL has just cause to enter to check)

[Lawcruncher]

Whatever you put in an agreement you are not going to control bad tenants!

I am not sure that what you propose will work, as a surrender has to be accepted and so simply leaving would not be a surrender.

What you could do is to include a statement in the agreement to the effect that, if at any time rent is in arrears, the tenant removes from the room all or substantially all his belongings the tenant is deemed to have abandoned the premises and ceased to reside there. Whether this deeming provision would work, I cannot say, as for statutory purposes (i.e. whether the Protection From Eviction Act applies or whether the tenancy has ceased to fulfil the conditions to be an assured tenancy) whether or not the tenant is in residence is a question of fact for the court to decide.

[Bel]

Lawcruncher, thanks for reply

[Matthew Moody]

An very interesting thread that I missed first time around.

I actually fell amok of the licence vs AST issue only these last few months when I was trying to evict a non-paying tenant (£1700+costs last time I checked) and had sent the wrong notice.

As my rooms are all let through a Licence Agreement, I had issued incorrectly a Section 8. The judge adjourned the case as a Section 8 cannot be issued against a Licence Agreement and I had to seek further legal advice. A Notice to Quit should have been issued instead so this is what I had to find out if this had actually been given.

I should probably have come on here had I thought :)

Anyway, legal advice taken and counsel given, I had a legal argument prepared and as the tenant had given Notice to Quit previously, I was able to get her out on the basis that she had Quit but was staying in the property beyond her notice and thus proceedings orders needed to be taken against her.

Needless to say, its an important point to make to always be sure you know what you are doing when evicting tenants. I guess my only rather paltry defence is in 5 years of running HMO's, this is the first eviction I've had to do when I've actually been to court - the others have either absconded or left before proceedings were taken against them.

Matthew

[Adrian]

Thank you all for your contributions.

I am interested that others feel that licences can rarely be justified but that Matthew (and other HMO landlords I know) uses them all the time - how would you defend yours, Matthew?

Reading your saga, it seems that you may have had more trouble if your licensee had not previously given notice to quit - is that fair? If they are occupying under licence, what is the correct procedure for eviction? What notice periods do you require?

With thanks,
Adrian

[Bel]

I am interested that others feel that licences can rarely be justified but that Matthew (and other HMO landlords I know) uses them all the time -

Its all vey well that LL's feel that they can use an agreement that suits them rather than the understanding what protection the law gives a tenant; and it may work 98% of the time.

Trouble is the other 2% can be very expensive when a tenant knows their rights and is prepared to take it all the way, especially with legal aid.

[Lawcruncher]

Its all vey well that LL's feel that they can use an agreement that suits them rather than the understanding what protection the law gives a tenant; and it may work 98% of the time.

There is certainly a danger of being lulled into a sense of false security because something has "worked".

[nicko]

Licence to Occupy I know that this applies to Almshouses but does it also apply to residents in exlusive occupation of Sheltered Housing owned by a charity? They cite Gray v.Taylor but I am not sure?

[jeffrey]

Licence to Occupy I know that this applies to Almshouses but does it also apply to residents in exlusive occupation of Sheltered Housing owned by a charity? They cite Gray v.Taylor but I am not sure?
See posts #29 and #31 on http://www.landlordzone.co.uk/forums/showthread.php?t=13870, where you have effectively asked the same question.

[nicko]

Apologies for cross threading now cannot post to other forum?!)

The agreement is for exclusive occupation of a single person's flat with a specific address. The Landlord is an incorporated company with the power to let its own property not an Almshouse yet cites Gray v Taylor as the reason that the agreement is a licence although there is not reference to either licencee or tenant in the "Accommodation Agreement" the same agreement which the Landlord uses for its Care/Nursing Home!