License to Occupy or Non Excluded Tenancy?

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    License to Occupy or Non Excluded Tenancy?

    We have had an offer accepted to purchase a house, in which the current owner lets part of the house to a tenant. She does this via a local lettings agency. The key facts are:

    - The area of the house the tenant rents is not officially a separate flat (permission was declined by the council).
    - The tenant has their own access via a side door and does not share any facilities or areas of the house with the owner/landlord.
    - The door within the house (at the end of the main hallway) that leads to the tenants area is kept locked.
    - The tenant is on a 6 month contract (expiring end of Feb) with 1 month notice

    It will form part of the contract of the sale of the property that the tenant would have to leave on or before the completion date, and if we decide that we are okay for her to stay on then she would have to start a new contract with us. We would be okay with this in principle because the income is £500 per month and this would help us with renovation costs. We need to decide this before the contracts are drawn up so that the current owner can give notice to the tenant and/or we make arrangements for a new agreement.

    But.....we want to make sure that we are protecting ourselves as the new owners (and occupiers) if we do decide to do this, and we are pretty sure that the lettings agency has her on some bog standard AST agreement, which we don't think is correct. My questions are:

    - What sort of tenancy is this? I have read alot of info and cannot decide if it is a 'license to occupy' or 'non-excluded tenancy'
    - What rights would the tenant have compared to AST?

    If anyone has any advice/experience/thoughts on this issue it would be greatly appreciated!

    Thank you

    #2
    Surely you are using a solicitor to purchase so get him to get a copy of the AST or agreement and advise. How do we know what the tenancy is - we can't the document either!



    Freedom at the point of zero............

    Comment


      #3
      We are taking advice from our solicitor - and I am waiting for the information on the existing agreement. The issue is that legally (as far as I understand it) it is completely incorrect if they have got her on an AST (because the owner is resident in the property too) and from my own research I thought it should be a non-excluded tenancy, rather than a 'license to occupy'. In my question I meant that, given the situation outlined - should this be a license to occupy or an excluded tenancy? I am fairly confident it should not be an AST.

      And I was just wanting to see if anyone had any experience of being a resident landlord with either of these types of agreements, and whether they had any issues?

      Comment


        #4
        It is certainly not a 'license', it is also not an AST.

        Therefore it is a tenancy of sorts - and I guess the key thing for you to be aware of is that it would take a court order to involundarily evict the tenant.

        If the paperwork the tenant has been given is a standard AST then there is a chance that it will be silent on the issue of how to serve notice to quit - but for now, that's not your issue, it's the vendors.

        Just because it says AST on it, does not mean it is an AST

        Comment


          #5
          I agree the occupant looks like a non-excluded tenant. The takeaway point is that the tenancy can only be ended by obtaining a court order after notice has been given or a deed of surrender (which the tenant does not have to sign). My advice would be to ask her to stay on in exchange for a new fixed term agreement. Your solicitor should certainly be able to cope with this, so press them for detailed advice and follow it (just be sure to get a quote for it first as I'm sure this goes outside of a standard vacant possession conveyance).
          Disclaimer:

          The above represents my own opinion, derived from personal knowledge and should not be relied upon as definitive or accurate advice. It is offered free of charge and may contain errors or omissions or be an inaccurate opinion of the law. I accept no liability for any loss or damage suffered as a result of relying on the above.

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