Legal News | 14.09.26
Licence or Tenancy? Understanding the Difference and Recovering Possession
Disputes can arise when someone occupies a property without a formal written agreement and later refuses to leave. In these situations, one of the first questions a court will consider is whether the occupier has a licence or tenancy.
The distinction between a licence and a tenancy matters because it affects both the occupier’s legal rights and the procedure the property owner must follow to recover possession.
The leading authority is Street v Mountford [1985] AC 809, in which the House of Lords confirmed that the courts will look at the substance of an arrangement rather than the label attached to it. Simply calling an arrangement a “licence” does not prevent it from being a tenancy if the characteristics of a tenancy are present.
How can you tell whether an occupier is a licensee or tenant?
One of the most significant factors is exclusive possession. If an occupier can exclude everyone else, including the property owner, from the whole property or a defined part of it, this will often suggest the existence of a tenancy. Conversely, where the owner retains control of the property and the occupier shares accommodation with them, a licence is more likely to exist.
The courts will also consider the wider circumstances, including the purpose of the arrangement, the relationship between the parties, any payments made and whether there was an intention to create legally binding obligations.
This issue frequently arises in informal arrangements between family members, friends and carers where property is occupied without any formal documentation. In such cases, determining whether a tenancy or licence exists can be far from straightforward.
How does an occupier’s status affect possession proceedings?
The distinction becomes particularly important when the owner wishes to recover possession of the property. The correct legal procedure will depend upon the occupier’s status and the level of statutory protection they enjoy.
In many cases, reasonable notice will need to be given before occupation can be terminated. If the occupier remains in the property after the notice period has expired, possession proceedings may be required. A court order provides a lawful route to recovering possession and can help avoid allegations of unlawful eviction.
Even where there are strong arguments that an occupier is a licensee rather than a tenant, caution should be exercised. Recovering possession without following the correct legal process can have serious consequences, making it important to obtain legal advice at an early stage.
If you need advice on whether an occupier has a licence or tenancy, serving notice or starting possession proceedings, please contact the Dispute Resolution Team at Wansbroughs.
