A license must be carefully developed. If the terms of the licence do, essentially, a lease, then the courts will treat the agreement as a lease agreement. This creates the risk that licences that are not properly drafted and issued for a period of more than six months may give the tenant a right to protection under the Landlords and Tenants Act 1954. This protection ensures the security of seniority and gives them the right to remain in the premises at the end of the contract and to apply for an extension on the same terms. The terms of a tenancy agreement (or licensing agreement) can be negotiated between the lessor and the potential tenant, but in practice, the tenant may not have much leeway to negotiate advantageous terms. The unfair clauses of a tenancy agreement are not legally binding on you. But they still have to follow the rest of the agreement. As a general rule, it is easier for your landlord to ask you to leave during a regular agreement. You must always follow the right process to dislodge yourself.
The agreement can also indicate who you need to contact about repairs, rules for tenants, subletting and transfer of your lease. The agreement may have rules for pets, customers or smoking. However, some owners use the wrong type of written agreement, so your type of rental may be different from your contract. It should also be noted that a licence does not confer interest on the land, as it is not subject to stamp duty. However, it would be unnecessary to label a document as a license for the sole purpose of avoiding stamp duty. Whether a document creates a lease or licence does not depend on the name of the document or any other label indicated by the parties, but on the actual nature of the rights and obligations, as the agreement demonstrates. An important factor in distinguishing between a rental agreement and a license is whether the user has the property exclusively. Subject to different facts from one case to another, the law generally accepts that the granting of exclusive employment (the user may occupy the property exclusively and privately) creates a lease agreement for a period of time for periodic payments.
To avoid the protection of the Rent and Housing Act, landlords attempted to enter into agreements that were considered licenses but were later held as leases.
