In the wake of the Renters’ Rights Act 2025 (“RRA”) receiving Royal Assent on 27 October 2025, there has been a surge of publicity and commentary regarding the impending changes to the private rented sector, the majority of which will be in force from 1 May 2026.

(Click here to see our post about these changes and the impact upon Landlords and professionals working in the sector.)

As a result, there is predicted to be an increase in Landlords letting properties under Licence Agreements as opposed to Tenancy Agreements in an attempt to avoid being caught by the RRA. Licensees under legitimate Licence Agreements are not afforded the same security of tenure as tenants under the Housing Act 1988 and will not benefit from the increased protections for tenants under the RRA. This means that it is, generally, quicker to evict licensees and there is no requirement for Landlords to demonstrate fault grounds when doing so.

However, Landlords will need to consider whether the Licence Agreement being offered is legitimate. If the Agreement contains any of the following terms then it is may be that the Licence Agreement is not a Licence Agreement and is, in fact, a tenancy:  –

1. It grants exclusive possession of the premises or property
2. The Landlord has no right to enter the premises or property for inspection or any other purpose (except in the case of emergency)
3. It is granted either for a fixed term or on a periodic rolling basis (pending changes under the RRA from 1 May 2026)
4. It reserves rent (as opposed to a Licence fee which includes provision of services)
5. No services are being provided to the occupant

The Courts are already alert to ‘sham’ Licence Agreements and case law has shown that the Courts can and will look at the substance as well as the form of the Agreement in each case to determine whether a tenancy exists – regardless of how it is labelled. The Courts will dismiss possession actions brought on the basis of ‘sham’ Licence Agreements and the Landlord is likely to face costs consequences.

The RRA has, as of 27 December 2025, granted Local Authorities the power to enter properties, take documentation, and request information relating to the occupation in order to determine whether a property is being privately rented. Local Authorities now also have the power to fine Landlords who are in breach of the new regulatory requirements, which will include Landlords letting out properties under ‘sham’ Licence Agreements.

Landlords should be aware of the dangers of trying to circumvent the provisions of the RRA by granting Licence Agreements that are not really Licence Agreements.

If it looks like a tenancy….it might just be a tenancy.

Contact our Property Litigation Team today for tailored legal advice on Tenancies, Licence Agreements, and the Renters Rights Act.

Upcoming Event: The Renters’ Rights Act 2025: What the Changes Mean for Landlords and Letting Agents

Join our Property Litigation specialists for a clear and practical overview of what the reforms mean in practice. The session will explain the new requirements, outline the phased implementation timetable and highlight the potential risks for non-compliance. There will also be guidance on steps that landlords and agents should be taking now in order to prepare.

• Date: 16th of April 2026
• Hosted by: Rachel Gimson, Rebecca Stubbs, Georgina Galton
• Time: 12:00pm to 1:00pm
• Location: Online Webinar

Register here