Can You Avoid a Tenancy by Using a Short-Term Let?

What Landlords Need to Know in Light of the Renters’ Rights Act

The question of whether a landlord can avoid creating a tenancy—and therefore avoid the impact of the Renters' Rights Act—by using a short-term let or licence agreement is becoming increasingly common.

With growing regulation in the private rented sector, many landlords are exploring alternatives. Short-term lets, particularly those marketed through platforms like Airbnb, can appear to offer a more flexible, less regulated route.

But the reality is more complex—and getting it wrong can be costly.

The Key Principle: It’s Not What You Call It

A common misconception is that calling an agreement a “licence” instead of a tenancy changes its legal status.

It doesn’t.

There is long-established legal precedent—most notably from Street v Mountford—that confirms:

The reality of the arrangement overrides the wording of the agreement.

If the occupier:

• Has exclusive possession, and
• Is using the property as their home,

then a tenancy is likely to exist in law—regardless of what the document says.

Why This Matters More Now

The introduction of the Renters' Rights Act is increasing compliance obligations for landlords, particularly around:

• Security of tenure
• Possession processes
• Ongoing legal responsibilities

As a result, some landlords are considering short-term lets as a way to avoid these changes.

While genuine short-term accommodation can fall outside tenancy legislation, simply switching to a licence agreement without changing how the property is actually occupied is unlikely to achieve that.

When a Short-Term Let Becomes a Tenancy

A short-term arrangement can drift into tenancy territory where:

• The occupier stays for a longer, continuous period
• There are no services provided (e.g. cleaning, linen)
• The occupier has full control of the property
• The property becomes their main or only residence

At that point, the arrangement may legally be treated as a tenancy—whether intended or not.

The Risks of Getting It Wrong

If a landlord unknowingly creates a tenancy but treats it as a short-term let, they may have failed to comply with key legal requirements.

This can lead to serious consequences, including:

• Deposit penalties of up to 3x the deposit for failing to protect it correctly
• Inability to serve valid notice to regain possession
• Rent repayment orders of up to 12 months’ rent
• Fines for non-compliance with safety regulations (gas, electrical, EPC)
• Claims for unlawful eviction or harassment
• Enforcement action from the local authority

The Overlooked Risk: HMO Licensing

Another major risk arises where multiple occupiers are involved.

If a property is, in reality, being occupied as a tenancy by multiple unrelated individuals, it may fall under the definition of a House in Multiple Occupation (HMO) under the Housing Act 2004.

If the property is not correctly licensed, landlords could face:

• Civil penalties of up to £30,000 per offence
• Rent repayment orders of up to 12 months’ rent
• Criminal prosecution in serious cases
• A banning order preventing future lettings
• Inclusion on the rogue landlord database

This is an area where landlords can inadvertently breach the law without realising it.

So, Can You Use Short-Term Lets Safely?

Yes—but only where the arrangement is genuinely short-term in nature.

That means:

• The occupier is not treating the property as their home
• Services are provided (like a serviced accommodation model)
• The landlord retains a degree of control
• The arrangement is clearly temporary

If those elements aren’t present, the risk of creating a tenancy increases significantly.

Final Thoughts

Short-term lets can be a legitimate and effective strategy—but they are not a simple workaround to avoid tenancy law.

Trying to sidestep legislation by relabelling an arrangement can create greater legal and financial exposure, not less. The key is to focus on the reality of how the property is used, not just the paperwork.

Need Advice?

If you’re unsure whether your current or proposed arrangement could unintentionally create a tenancy, it’s worth getting clear, professional advice before problems arise.

Goldsmith Property specialises in helping landlords navigate complex and evolving legislation, ensuring you remain compliant while protecting your investment and income.

Get in touch today for tailored guidance and peace of mind:
www.goldsmith-property.co.uk | info@goldsmith-property.co.uk | 0117 442 0644