Part 1 - tenancies and licences not within section 7 that are occupation contracts if notice is given
34.A tenancy or licence which is made with a person (‘person A’), but which allows a different person to live in the dwelling to which the tenancy or licence relates (such a person is described in paragraph 1 as a ‘beneficiary’), is not an occupation contract under section 7.
35.The same is true of a tenancy or licence where no rent or other consideration (for example work undertaken by the contract-holder as a form of rent) is payable.
36.But under paragraph 1, such a tenancy or licence can be an occupation contract if the landlord wishes. If so, the landlord must give notice to the person with whom the tenancy or licence is made (which would be person A in relation to a tenancy or licence where the beneficiary will live in the dwelling) stating that the tenancy or licence is to be an occupation contract. That notice must be given before the tenancy or licence is made, or at the time it is made.
37.Paragraph 2 applies to a tenancy or licence where a beneficiary lives in the dwelling, and the landlord has given notice under paragraph 1. It allows the landlord to specify in the notice that certain provisions of the Act (and provisions of regulations made under it) should be read as if they referred to the beneficiary. Paragraph 2 is necessary because the Act contains references to ‘contract-holders’ (including in ‘fundamental provisions’ which will become terms of the occupation contract). Similarly, regulations made under the Act will include references to ‘contract-holders’ (including in ‘supplementary provisions’, which will also become terms of the occupation contract).
38.Those provisions give rights to, and impose obligations on, the contract-holder, which in these circumstances will be person A. It may be necessary for those provisions to be treated in practice as applying to the beneficiary, to ensure the smooth day-to-day operation of the contract.