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					Licensees in Private Rented Accommodation

The purpose of this leaflet is to help outline for landlords and tenants and other occupants of
rental accommodation the distinction between tenants and licensees. The leaflet is a general
guide only and not an interpretation of the law and does not necessarily make reference to all
relevant provisions.


What is a Licensee?


A licensee is a person who occupies accommodation under licence. Licensees can arise in all
sorts of accommodation but most commonly in the following four areas;


    (b) persons staying in hotels, guesthouses, hostels, etc.,


    (b) persons sharing a house/apartment with its owner e.g. under the „rent a room‟ scheme
        or „in digs‟,


    (c) persons occupying accommodation in which the owner is not resident under a formal
        licence arrangement with the owner where the occupants are not entitled to its
        exclusive use and the owner has continuing access to the accommodation and/or can
        move around or change the occupants, and


    (d) persons staying in rented accommodation at the invitation of the tenant.

The provisions of the Residential Tenancies Act 2004 do not apply to the first three categories.
Although most of the Act does not apply to the fourth category also, some provisions are
relevant where the licensee is residing with the tenant and this leaflet is aimed at persons in
that category.


What is a Licensee in Private Rented Accommodation?


A licensee residing in a private rented dwelling is living there at the invitation of the tenant as
the arrangement enabling a licensee to live in rented accommodation is made with the tenant
and not with the landlord. The tenant may already be well established in the dwelling and may
take in a licensee because another tenant or licensee has moved out, or the tenant can no
longer afford the rent. Alternatively, the tenant may be just entering into a tenancy with the
landlord whereby the landlord has indicated that the tenant may admit a certain number of
persons to share the dwelling with the tenant. Essentially therefore, in the private rented sector
someone is a licensee if living with the person with whom he/she made the letting arrangement.
In these circumstances the Residential Tenancies Act will apply to the tenant‟s occupation of
the tenancy and will thus have certain impacts for the licensee. While there may be any
combination of multiple occupants in such cases, e.g. 3 tenants and 2 licensees; for the 2004
Act to be relevant where there is a licensee, there must always be at least one tenant.


Licensing arrangements in private rented dwellings are often confused with sub-lettings and
assignments.      The difference is that when a tenant assigns or sublets their rental
accommodation, they no longer live in it whereas a licensee shares the accommodation with
the tenant.


How is a Licensee different to a Tenant?


Licensees in private rented accommodation are not tenants as there has been no tenancy
entered into by them with the landlord. While the tenant is under a statutory obligation to inform
the landlord of the identity of any person resident in (rather than just visiting) the dwelling, the
landlord will not be in a position to accept or veto the individual concerned in the way that
he/she could with a prospective tenant.


Licensees are not bound by the tenancy obligations that apply to tenants and equally do not
have the rights that apply to tenants. Therefore although the tenant may take in a licensee to
contribute towards the rent, the tenant remains liable to the landlord for the full rent amount and
if the licensee does not meet their payment obligations it is the tenant‟s problem and not the
landlord‟s, as the tenant‟s obligation to pay the agreed rent to the landlord remains. Tenants
are responsible for all of the acts and omissions of their licensees. Therefore, if an act of a
licensee breaches an obligation applying to the tenancy, whether under law or under a written
tenancy agreement, the tenant will be in breach of the obligation thus potentially entitling the
landlord to terminate the agreement and the tenancy in accordance with the relevant legislative
provisions. Examples of breaches would include; a licensee engaging in anti-social behaviour;
a licensee redecorating without the landlord‟s written consent – these are prohibited by law; a
licensee hanging out washing on an apartment balcony or leaving an exterior door unlocked –
these may be in contravention of the tenant‟s letting agreement or management company rules.
A tenant taking in a licensee will therefore clearly need to establish all the obligations that the
tenant will require to apply to the licensee.


Any money that a licensee pays to the tenant as a deposit is a personal payment to the tenant
and is not a deposit with the meaning of the Residential Tenancies Act 2004, as that meaning
is confined to deposits paid by tenants to landlords.


Relevant Provisions of the Residential Tenancies Act 2004


Part 4 of the Residential Tenancies Act 2004 contains the security of tenure measure for
tenants based on 4-year cycles whereby tenancies that have lasted more than 6 months
become „Part 4 tenancies‟ and may only be terminated by the landlord during the following 3½
years where one or more of the 6 grounds listed in the Table to section 34 of the Act arises. At
the end of the 4-year period, the tenancy is deemed terminated and a new tenancy comes into
being where the dwelling continues to be let to the same tenant(s). This new tenancy is known
a „further Part 4 tenancy‟ and, if not terminated by the landlord within the following 6 months,
may only be terminated during the remainder of the successive four years where one of the
grounds in the Table to section 34 arises.


Chapter 6 of Part 4 contains the rules governing the operation of Part 4 in cases of multiple
occupants. In some instances the multiple occupants will all be tenants but in other instances
they will be a mixture of tenants and licensees. A tenancy becomes a Part 4 tenancy on the
earliest date at which one of the tenants has been in occupation for 6 months. During the
existence of a Part 4 tenancy any lawful licensee of the tenant/s may request the landlord to be
allowed to become a tenant of the tenancy. The landlord may not unreasonably refuse such a
request and must give his/her acceptance in writing. All the rights, restrictions and obligations
of a tenant will then apply to the former licensee except that the protection of the Part 4 tenancy
will not apply until the former licensee has completed 6 months of continuous occupation
counting time spent as a licensee and as a tenant.


Example:

                                                                 th
Angela Ashe and Barbara Bush enter into a tenancy on 18 August 2005. The house has a
third bedroom and they are having difficulty affording the rent – the landlord did not indicate a
                                                                                          th
limit of two occupants. They take in Cathy Castle as their licensee on 20                      October 2005.
                              th
Angela moves out on 13 December 2005 and Barbara takes in Dina Dove as her licensee on
  th                                                                          th
17     December 2005. Barbara acquires a Part 4 tenancy on 18                      February 200 All tenant
                                                                                                          st
obligations have been complied with. Cathy requests the landlord to become tenant on 1
March 2006 and Dina makes a similar request two weeks later. Withholding of consent would
be unreasonable so the landlord gives consent to both in writing. Cathy while now a tenant of a
                                                                      th
Part 4 tenancy does not acquire the protection of it until 20              April 2006 and Dina does not
                                    th
acquire the protection until 17 June 200 Therefore if Barbara terminates her tenancy before
  th
20 April 2006 (the date on which Cathy qualifies for the benefit of the Part 4 tenancy), the Part
4 tenancy will expire and a new tenancy will commence assuming the landlord does not
immediately terminate Cathy and Dina’s tenancy. Even so, for the next 6 months their tenancy
may be terminated by the landlord without having to cite one of the grounds in the Table to
section 34, as that new tenancy has not yet become a Part 4 tenancy. If Barbara does not
                       th                                                                                 th
leave until after 20        April 2006, the original Part 4 tenancy can continue to exist until 17
August 2009 because Cathy will have qualified for its protection before Barbara left.


This example shows that if a licensee wants the security of a Part 4 tenancy to be personally
applicable to him/her rather than be relying on one or more tenants to continue in occupation,
then he/she should make the request to the landlord to become a tenant. However, as well as
acquiring the rights of a tenant, the licensee also assumes the statutory obligations of a tenant
applying to the tenancy and any additional obligations applying under a tenancy agreement.


In normal circumstances where the only tenant of a Part 4 tenancy dies, then the Part 4
tenancy will terminate. However, if at the time of the death the dwelling was occupied by a
spouse, a co-habitee (as husband and wife for at least 6 months), an adult offspring or a parent
of the tenant, then if one or more of those persons elects in writing to become tenant, the Part 4
tenancy continues to exist. This provision does not apply where the licensees residing with the
tenant are friends, acquaintances or more distant relatives.


Referring a Complaint to the Private Residential Tenancies Board

The Private Residential Tenancies Board (PRTB), which was established under Part 8 of the
Residential Tenancies Act, deals with tenancy disputes in accordance with Part 6 of the Act. A
licensee may refer to the PRTB for resolution a complaint that a landlord has unreasonably
refused to accede to his or her request to become a tenant of a Part 4 tenancy of a dwelling in
which he or she is residing.


The PRTB does not have jurisdiction to deal with any other disputes involving licensees. This
is because licensees have no direct relationship with landlords and the PRTB does not deal
with disputes between occupants, whether those occupants are tenants only or a mixture of
tenants and licensees. This means that although the PRTB deals with disputes about the non-
refund by landlords of deposits paid by tenants, it has no authority to deal with disputes
between tenants or between tenants and licensees about monies paid to a tenant as a form of
„deposit‟.


The dispute resolution process operated by the PRTB consists of two stages – the first is either
mediation or adjudication (depending on what the parties choose) and if that does not resolve
the matter, the second stage is a Tenancy Tribunal hearing. The ultimate determination of the
dispute is by way of a Determination Order of the PRTB and this is binding on the parties
concerned.


A licensee who wishes to refer a complaint to the PRTB that his/her request to become a
tenant has been unreasonably refused by the landlord should contact the Board directly in the
first instance and discuss the matter. The PRTB will provide an Application Form, which should
be completed and returned to the Board along with the appropriate application fee. (Contact
the PRTB for current fee levels). The PRTB staff will help anyone who may have difficulty
completing the Application Form. Information provided to the PRTB in respect of a dispute will
be copied to both parties. Please see the PRTB‟s separate leaflet dealing with its dispute
resolution service.
Finally, an occupant of rented accommodation who considers that his/her arrangement with the
owner is in fact a tenancy although the owner has designated it as a licence, could refer a
dispute to the PRTB about an issue relating to the occupation by incorporating in the referral ,
the grounds for his/her belief that the occupation is under the tenancy. The PRTB will then
consider whether or not it has jurisdiction to deal with the matter based on its opinion as to
whether or not a tenancy exists.




   Please remember:

               Simply entitling a letting agreement a Licence does not automatically mean it
      will be considered a Licence and not a Lease. Neither the PRTB nor the Courts will just
      accept the title of a document but will look at the actual terms and substance of the
      agreement when assessing whether it has jurisdiction to deal with it.

                A tenant should always examine the terms of a tenancy agreement prior to
      signing it and know exactly what type of agreement is involved and whether it is a lease
      or a licence. Remember, the PRTB can only deal with “tenancies” and therefore does
      not have any jurisdiction to regulate genuine licence agreements.

              The legislative definition of “tenancy” is quite broad however and if you are in
      any doubt as to the significance of any terms contained in your tenancy agreement,
      please consult your legal advisors.

“Even though care has been taken in the preparation and publication of this guidance note the Private
Residential Tenancies Board, its servants or agents assume no responsibility for and give no guarantees,
undertakings or warranties concerning the accuracy, completeness or up to date nature of the
information provided in this guidance note and do not accept any liability whatsoever arising from any
errors or omissions contained therein".

				
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