What kinds of contract might I be expected to sign when taking on a property?
When signing any document it is essential that you understand its contents. The written agreement which you enter into for “renting” your studio will either be described as a ‘lease / tenancy agreement’ or a ‘licence’.
The difference between these two types of documents is fundamental to your right to remain after the period for your occupation stated in the document has expired.
In the case of a lease or tenancy agreement of more than 6 months, you will have what is known as a “business tenancy” (under the Landlord and Tenant Act 1954) and as such have the right to request a new lease or tenancy agreement on substantially similar terms other than the rent, which will be assessed as the new market rent for your studio. This is very important where (increasingly) landlords are granting leases for 12 months. Usually this is on the understanding that a new 12 month lease will be granted once the old lease has expired.
A licence is treated merely as a contract and therefore grants you no protection under the Landlord and Tenant Act 1954. This means that at the end of the period of occupation, you will have to vacate unless at the discretion of the owner you are offered a new licence.
The Landlord and Tenant Act 1954 is the major piece of legislation which regulates leases of business premises in England and Wales, including leases of artists’ studios, essentially to allow secutiry of tenure (i.e. preventing the landlord arbritarily throwing you out). A very useful guide was published in April 2004 by the Office of the Deputy Prime Minister: ‘Business tenancies: new procedures under the Landlord and Tenant Act 1954, Part 2‘ (link will download a PDF, 432k).
The difference between these types of contract is not always self-evident. The courts will always look at the actual wording and nature of the occupation granted to you, rather than simply the title of the document. If you have been granted exclusive occupation of your studio, as opposed to a studio sharing arrangement, then this raises the presumption that regardless of the document being described as a licence you have in fact been granted a lease. As such, you will have the benefit of being able to request a new lease. This is known as “security of tenure”. Well advised landlords will therefore usually grant leases which are excluded from the security of tenure provisions contained in the Landlord and Tenant Act 1954.