This page is targeted at housing professionals. Our main site is at www.shelter.org.uk

What is a tenancy?

This content applies to England

Definition and key elements of a tenancy.

Definition

A tenancy is a legal interest in land for a period of time. In other words a tenant has control of land for a period.

'Tenancy' and 'lease' mean the same thing, but commonly the term 'tenancy' is used to refer to short(er) term tenancies, whilst the term 'lease' is used to describe long-term leases of over 21 years (see Leasehold property for more details).

A joint tenancy is a tenancy is held by more than one person.

Key elements

In Street v Mountford, the House of Lords held that it was the reality of an arrangement rather than the label attached to an agreement that determined if a letting was a tenancy or a licence. They identified the hallmarks of a tenancy as:[1]

  • the grant of exclusive possession of premises
  • for a period of time
  • at a rent.

In addition, there must be:

  • an intention to create legal relations of landlord and tenant
  • two separate parties (ie a landlord and tenant) because a person cannot grant a tenancy to himself or herself[2].

Exclusive possession

Exclusive possession is more than sole occupation. It is the right of the tenant to exclude all persons, including the landlord, from the accommodation. The premises that are let do not have to constitute an entire flat or house. It is possible to have a tenancy of a single room.

To determine whether the right to exclusive possession exists, it is necessary to examine both the agreement and the reality of the situation.

In Street v Mountford the landlord allowed M to occupy various rooms in a house. One condition of her occupancy was that the landlord would have unlimited access to the rooms at any time. The court decided that the actual facts of the arrangement did not require this degree of access and that M had been granted exclusive possession.[3]

The fact that a landlord has reserved the right to enter in given circumstances, eg to carry out repairs, does not deprive the tenant of exclusive possession. Indeed the fact that the landlord has reserved such a right is a positive indication of a tenancy.[4]

For a term

The term of a tenancy can either be:

  • fixed term (eg 12 months)
  • periodic (eg running from month to month).

The 'period' of a periodic tenancy is implied by the 'rental period'. If the rent is stated as a weekly amount, the period of the tenancy will be weekly, even if the agreement states that the rent must be paid fortnightly in advance .

A tenancy cannot be granted for a term that is uncertain (this is an uncommon scenario). Under the Law of Property Act 1925 a tenancy for life will be deemed to be a tenancy for 90 years. Further in one case, where an agreement for what purported to be a 'month-to-month' tenancy with basic protection did not allow the landlord to end the tenancy by service of a notice to quit, the Supreme Court held that it was in effect a tenancy for 90 years.[5]

Contractual and statutory periodic tenancies
A fixed-term agreement may specify that the tenancy is to continue on a periodic basis on expiry of the fixed term, in which case it becomes a 'contractual periodic tenancy' after the fixed term expires.

Where a fixed term ends and the contract does not provide for it to be extended, the tenant's legal interest will end, unless it is governed by one of the Acts of Parliament that apply to tenancies (eg an assured shorthold tenancy) when a 'statutory periodic tenancy' will arise.

Rent

In theory, payment of a rent is not an essential condition of the existence of a tenancy.[6] However, this is a characteristic of most, if not all, tenancies in practice.

Intention to enter into legal relations

A tenancy is a type of contract and as such requires an intention to enter into a legally binding agreement between landlord and tenant.

Arrangements where there is no intention to enter into a legal relationship would normally include accommodation provided by family members or as an act of generosity, charity, or friendship. However, each case must be judged on its facts. For more information see What is a licence?

Exceptional cases

There are exceptional cases where a tenancy will not normally be created even where the key elements are present. This includes a service occupier (in tied accommodation).

Terminating a tenancy

Under common law:

  • a periodic tenancy can be ended by the landlord or tenant serving a valid notice to quit or by surrender (a voluntary agreement between the landlord and tenant that the tenancy has come to an end)
  • a fixed term tenancy ends at the expiry of the fixed term or by surrender.

However, statutes have added protection for most residential tenancies. Other pages in the Security of tenure section set out how a landlord can end each particular type of tenancy.

A tenancy that is governed by the Rent Act 1977 or the Housing Acts 1985, 1988 or 1996 continues after the date a possession order takes effect, regardless of whether the possession order is outright, suspended or postponed. The tenancy ends when the tenant leaves after the possession order is made or s/he is lawfully evicted.[7] It should be noted that even though the tenancy of an occupier with basic protection will end once a possession order takes effect s/he can remain lawfully in occupation until a warrant for possession has been executed.[8]

Tenancies for minors

For information on the legal position of minors (ie young people under the age of 18) with regard to holding a tenancy see Tenancies for minors.

Shared occupancy arrangements

Sharing arrangements can cause difficulties in establishing the status of the occupiers.

The first important consideration is whether there is a joint tenancy. In a joint tenancy, there must be unity of time, title, possession, and interest among the occupiers. This means that the tenancy must be the same tenancy for all tenants, entered into at the same time and under the same agreement.

Two House of Lords judgments illustrates how the courts have approached shared occupancy arrangements.

In one case, a couple who were living together signed separate licence agreements for a one-bedroom flat. The landlord claimed to have the right to permit other people to use the flat and reserved the right to move in with the occupiers. It was clear from his failure to move in over time, and the fact that the accommodation was too small, that there was no genuine need for this clause. The House of Lords decided on the facts of the arrangement that the occupiers had exclusive possession. It held that the licence agreements were a pretence, and that the occupiers in reality had a joint tenancy of the flat.[9]

In the second case, the occupiers were four single people who shared a four-bedroom flat. They had separate licence agreements with separate and different rents. Their rights of occupation were granted at different times. As one occupier left, s/he was replaced by a different occupier. No one had exclusive possession of any part of the flat and collectively they did not have a tenancy of the whole or any part of the flat. There could be no joint tenancy because each of the occupiers had arrived at different times and paid a different rent, and so there was no 'unity of interest'. The House of Lords held the licence agreements to be genuine.[10]

[1] Street v Mountford (1985) 17 HLR 402, HL.

[2] Rye v Rye [1962] A.C. 496, HL.

[3] Street v Mountford (1985) 17 HLR 402, HL.

[4] Bruton v. London and Quadrant Housing Trust [1999] UKHL 26.

[5] s.149(6) Law of Property Act 1925; Berrisford v Mexfield Housing Co-operative Ltd [2011] UKSC 52; see also Southward Housing Co-Operative Ltd v Walker & Anor [2015] EWHC 1615 (Ch).

[6] Ashburn Anstalt v Arnold [1988] 2 WLR 706, CA.

[7] s.299 and Schedule 11 Housing and Regeneration Act 2008, brought into force by Housing and Regeneration Act 2008 (Commencement No.5) Order SI 2009/1261; Housing (Replacement of Terminated Tenancies) (Successor Landlords) (England) Order 2009 SI 2009/1262; Housing (Replacement of Terminated Tenancies) (Successor Landlords) (Wales) Order 2009 SI 2009/1260(W.112); Knowsley Housing Trust v White; Porter v Shepherds Bush Housing Association; Honeygan-Green v Islington LBC [2008] UKHL 70.

[8] s3 Protection from Eviction Act 1977.

[9] Antoniades v Villiers and Bridger (1989) 21 HLR 79, HL.

[10] AG Securities v Vaughan (1989) 21 HLR 79, HL.

Back to top