Free Licence to Occupy Template
A professionally drafted licence to occupy for property owners in England and Wales. Grant permission to use premises without creating a formal tenancy.
What Is a Licence to Occupy?
A licence to occupy is a personal permission granted by a property owner (the licensor) allowing another party (the licensee) to use or occupy a property for a specified purpose and period. Unlike a tenancy, a licence does not grant the licensee exclusive possession of the property, which is the key legal distinction between the two arrangements.
Licences to occupy are used in various situations, including temporary use of commercial space, short-term occupation pending completion of a lease, use of space for events, shared workspace arrangements, and situations where the owner needs to retain control and access to the property. Because a licence does not create a legal interest in the land, the licensee has fewer statutory protections than a tenant.
The distinction between a UK licence and a tenancy is determined by the substance of the arrangement, not simply by what the document is called. British courts will look at whether exclusive possession has been granted, the duration of the arrangement, and whether rent is payable to determine the true nature of the agreement under English law.
What's Covered in This Template
Doxuno's licence to occupy template covers the key provisions needed for a clear arrangement that avoids inadvertently creating a tenancy.
Parties
Full details of the licensor (property owner) and the licensee (occupier).
Property Description
Clear identification of the premises or area to be occupied, including any shared or excluded areas.
Purpose of Occupation
The specific permitted use of the premises, which may be restricted to particular activities.
Licence Period
Start and end dates of the licence, with provisions for early termination by either party.
Licence Fee
The fee payable for occupation, payment frequency, and method of payment.
Access and Shared Use
The licensor right to access the premises and any areas shared with the licensor or other licensees.
Condition and Maintenance
Responsibilities for maintaining the premises during the licence period.
Insurance
Insurance responsibilities for both parties covering the premises and the licensee activities.
Termination
Notice periods and circumstances under which either party may terminate the licence early.
No Tenancy Declaration
Express confirmation that the arrangement is a licence and does not create a tenancy or any interest in land.
How to Create Your Licence to Occupy
Follow these steps to create a licence to occupy that clearly establishes a non-tenancy arrangement.
- 1
Define the premises and purpose
Clearly describe the area to be occupied and the specific purpose for which the UK licence is granted. Avoid granting exclusive possession of a self-contained unit, as this may create a British tenancy rather than a licence in England and Wales.
- 2
Set the licence period and fee
Specify the start and end dates of the licence and the fee payable. Consider keeping the term relatively short to reinforce the temporary nature of the arrangement.
- 3
Retain access rights
Include clear provisions allowing the UK licensor to access the premises at reasonable times. This is a key factor in distinguishing a British licence from a tenancy under English law in England and Wales.
- 4
Address practical matters
Cover insurance, maintenance responsibilities, permitted alterations, and any restrictions on use such as operating hours or noise levels.
- 5
Execute the licence
Both UK parties should sign the licence. A British licence does not need to be executed as a deed in England and Wales, but both parties should retain a signed copy.
Legal Considerations
The legal distinction between a licence and a tenancy is critical. If a court determines that the arrangement is in substance a tenancy, statutory protections for tenants will apply regardless of the document title.
This template is for informational purposes only and does not constitute legal advice. Consult a qualified solicitor for advice specific to your situation.
Reviewed for England & Wales law
Licence vs Tenancy
The leading UK case of Street v Mountford (1985) established that the key factor in distinguishing a UK licence from a tenancy is whether exclusive possession has been granted. If the occupier has exclusive possession for a term at a rent, the arrangement is a tenancy under English law regardless of the label used. Sham arrangements designed to avoid British tenancy protections will not be upheld.
Exclusive Possession
To maintain the arrangement as a UK licence, the British licensor should retain genuine rights of access and control over the premises. Simply labelling the agreement as a licence while granting exclusive possession will not prevent it being treated as a tenancy by the courts in England and Wales.
Termination Rights
A UK licence can generally be terminated on reasonable notice, and the licensee has no statutory right to remain in occupation after termination in England and Wales. This contrasts with a British tenancy, where the tenant may have security of tenure and the UK landlord must follow specific procedures to recover possession under English law.
Business Premises
If the UK licence is for business premises, it is important to ensure the arrangement genuinely operates as a licence. If it is found to be a tenancy in England and Wales, the British licensee may acquire protection under the UK Landlord and Tenant Act 1954, including the right to renew the lease.
Frequently Asked Questions
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