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Is this contract clause legal?

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533 views 2 replies latest reply: 20 January 2015


I am currently living in a rent under 6 month contract (property is managed by the agency). When I asked agency if my deposit has been protected with deposit scheme I got following reply from them:

The Deposit protection scheme is not applicable for the nature of this agreement. What you paid at the check-in is a Refundable Fee, that will be refunded to you when you vacate the room

and in the contract there is a following block:

2. Declaration

This agreement is not intended to confer exclusive possession upon the Licensee, nor is it intended to create the relationship of landlord and tenant between the parties. The Licensee shall not be entitled to an assured tenancy or a statutory periodic tenancy under the Housing Act 1988 or to any other statutory security of tenure now or upon the determination of the Licence. The Licensee accepts that this Licence does not confer any statutory protection and/or rights that would otherwise be applicable to an assured tenancy or a statutory periodic tenancy under the Housing Act 1988.


Are they right, and in this case deposit protection should not be applied?


Thanks in advance. 


Hi Alek

There’s normally no requirement for the landlord to protect your deposit if you have a licence rather than a tenancy as that clause seems to indicate. However, just because an agreement says it’s a licence doesn’t necessarily mean that it is. With a licence you usually only have a right to use the property but with a tenancy the agreement gives you a right to occupy it exclusively. So, if you have exclusive occupation or possession then you may actually have a tenancy, no matter what the document says. There’s some info here on some of the key differences between the two that says licences are normally for lodgers, hostel type accommodation and holiday lets but not a property where the landlord isn’t living there and if you can lock the landlord out of your room, for example.

If you think that you might have a tenancy rather than a licence then there’s a chance that clause might not be valid and the deposit might need to be protected – if you think that’s the case I would get some legal advice from the Citizens Advice Bureau, Shelter or a free legal advice centre.



Thanks for your reply, i wil check those links. 

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