What is a licence, and can a buyer move in before completion?

Occasionally a seller is asked to let the buyer move in before the sale has completed. Done properly, this is a licence: a permission to occupy the property in contemplation of completion, which ends when the sale completes or falls away. Done badly, it can leave a seller with an occupier they cannot easily remove. Here is how it works and how sellers can protect themselves.

What is a licence?

A licence is a personal permission to occupy property. It gives the occupier the right to be there, but it does not give them an interest in the land. In this situation the buyer occupies only because they have contracted to buy, and their right to be there is tied to that contract. When the sale completes, they become the owner. If the sale does not complete, the permission ends.

Why would a seller agree to this?

Early occupation is unusual, but there are good reasons it happens. Some examples:

• To stop a chain collapsing. This is the most common reason, and it is explained in more detail below. A seller in the middle of a chain is under pressure to complete their sale, but their own onward purchase is not yet ready to complete. A licence from their onward seller lets them complete their sale and move into their new home while that purchase catches up.
• A lender delay on the onward purchase. The buyer is committed, but a final lender requirement is holding up the release of their mortgage funds for a few days.
• A long gap between exchange and completion. The seller has exchanged on a deferred completion, for example while awaiting a grant of probate or completion of their own onward purchase, and the property is empty in the meantime.
• A relocation or school term. The buyer must start a new job or a child must start school on a fixed date, and completion has slipped by a few days.
• The buyer's tenancy has ended. A buyer who has been renting may have no flexibility on their move out date.
• Storage and preparation. The buyer only needs to move belongings in or take measurements, rather than live there.

In each case the seller is helping the transaction get over the line. The arrangement should be a short bridge to completion, not an alternative to it.

A closer look: the seller caught in the middle of the chain

Picture a homeowner who is selling their flat and buying a house. The buyers of the flat are ready, and so is everyone beneath them: their own buyers need to complete, and there are removals booked and mortgage offers due to expire. The pressure from the chain below is to complete the flat sale now.

But the purchase of the house is not yet in a position to complete. Perhaps the house seller is waiting on a final document, or the mortgage funds on the purchase will not arrive for another week. That leaves the homeowner in a precarious position, with two options:

• Delay completion of the flat sale until the house purchase is ready. That risks breaking the chain beneath them, and the whole deal could fall through.
• Complete the flat sale on time, so the chain below can complete, and move into the house on a licence from the house seller in anticipation of completion of the purchase shortly afterwards.

The second option keeps the chain alive, but it only works with the agreement of the house seller, and it depends on the purchase being genuinely close to completion. The purchase contract should already have exchanged, so both sides are committed, and the reason for the delay should be clear and short term. The homeowner moves in as a licensee, not as owner or tenant, and the licence ends on completion of the purchase, when they become the owner.

For the house seller, the protections below apply in full. For the homeowner moving in, the main risk is that if the purchase does not complete, they will have already sold their flat and will have to leave the house. That is why this route is only for cases where completion is imminent.

Why this is not a tenancy

Normally, someone who has exclusive possession of a home for a period in return for payment is a tenant, whatever the agreement calls them. However, the law recognised that there are situations where exclusive possession does not create a tenancy because the occupation is referable to some other legal relationship. A buyer occupying pending completion of their purchase is one of the recognised examples: they are there because of the contract for sale, not because the seller has agreed to become their landlord.

This distinction matters a great deal. Since 1 May 2026, under the Renters' Rights Act 2025, most residential tenancies are periodic assured tenancies that can only be ended on specific statutory grounds. If an arrangement were found to be a tenancy, the seller could be left with an occupier with long term security. Keeping the arrangement clearly within the licence pending completion category is the seller's main protection.

The risk increases if the arrangement drifts away from the sale. Warning signs include allowing occupation before contracts have been exchanged, open ended arrangements with no link to completion, regular payments that look like rent, and letting occupation continue after the sale has fallen through.

The legal protections for the seller

The Standard Conditions of Sale, used in most residential transactions, already contain provisions for a buyer who occupies before completion. In broad terms they provide that the buyer occupies as a licensee and not a tenant, cannot transfer the licence, must pay the outgoings, must pay the seller a fee for the period of occupation, must keep the property in as good repair as when they moved in, and must leave when the licence ends. The licence ends on the earliest of completion, the contract being rescinded, or either party giving five working days' notice. A buyer who stays on after that is liable to the seller.

These standard terms are a useful starting point, but sellers should not rely on them alone. We would normally recommend:

• Only allowing occupation after exchange of contracts, so the buyer is legally committed and their deposit is held.
• A written licence agreement tailored to the situation, stating clearly that occupation is in contemplation of completion and ends on completion or termination of the contract.
• A defined end date or notice period, and a requirement to leave immediately if the contract is ended.
• A licence fee, often calculated as interest on the outstanding purchase price, so the seller is not out of pocket for any delay.
• Clear rules on who may live there, and a prohibition on works or alterations before completion.
• Responsibility for utilities, council tax and outgoings, with meter readings taken on the day keys are handed over.
• Insurance arrangements agreed in advance, and the seller's insurer told about the occupation.
• Consent from the seller's mortgage lender. Most mortgages prohibit allowing anyone into occupation without consent.

What if the sale does not complete?

This is the scenario every seller should think about before handing over the keys. If the buyer cannot complete, the seller can end the licence and, where appropriate, serve notice to complete and ultimately keep the deposit. But if the buyer refuses to leave, the seller may still need a court order to recover possession of a home. A well drafted licence makes that process far more straightforward and recovers the seller's costs and losses, but it cannot remove the risk entirely. That is why early occupation should be limited to cases where completion is genuinely imminent and the reason for the delay is understood.

Advice for buyers

Moving in early does not make you the owner. You will not be able to make changes to the property, and if your purchase fails you will have to leave. You should also check that your own lender and insurer are content with the arrangement.

Handled carefully, a licence pending completion can be the difference between a chain completing and a chain collapsing. Take advice before agreeing to it, not after the keys have changed hands.

If you would like advice on any of the points in this article, speak to our Property team on 020 3146 6300 or email enquiries@lauruslaw.co.uk.