People often assume that if the landlord or tenant dies, then that is the end of the tenancy. However, this is not the case.
There is an important difference here between a residential license and a tenancy.
A tenancy is one of the two types of ‘legal interest in land’ permitted by the Law of Property Act 1925. These are
- An estate in fee simple absolute in possession – i.e. freehold, and
- A term of years absolute – i.e. leasehold
So, a tenancy is a type of lease. A very short lease (which will be even shorter after the Renters Rights Bill gets the Royal Assent when the period will be monthly), but nonetheless a lease. Or ‘a term of years’ – even though the term may be less than a year.
A tenancy is a ‘thing’ which exists on its own after either or both parties have died and which is capable of being sold on. Which is very different from a residential license
A residential license, on the other hand, is a personal agreement or contract between the landlord and the licensor, which means that the occupier is not a trespasser.
So, as it is a personal agreement, it cannot last beyond the death of one of the parties.
Sham licenses
This may seem fairly straightforward. However, you also need to watch out for sham licenses. This is where a landlord makes an occupier sign a form of agreement which states that the occupier has a residential license when, in fact they have a tenancy.
The main case on this point is the House of Lords decision in Street v. Mountford in 1985. The Court held that in most cases where there is an exclusive occupation at a rent for a term, it will be a tenancy, whatever the written agreement signed between the parties may say.
So if a landlord dies and the person who inherits tries to evict the occupier on the basis that they have a license, the occupier/tenant will be able to sue for compensation for unlawful eviction and an injunction to let them back in again.
And finally
If you are a landlord or an agent managing a property and one of the parties dies, you need to be careful how you deal with things.
In most cases, the occupier will have had a tenancy which has to be ended properly before the landlord or his executors can retake possession. Make sure you follow the proper procedure and take advice if you are not sure.