Do actions speak louder than words?

Ben Gant examines a recent case where a city council arranged for a company to place 'guardians' in a former care home it owned.

Guardian schemes are an increasingly popular way for property owners to protect vacant premises against squatters and vandalism. Management companies arrange for individuals to live in such properties as licensees. However, the recent case of Camelot Property Management Limited and Camelot Guardian Management Limited v Roynon [2017] is a reminder that when it comes to determining the basis of someone’s occupation of property, the situation ‘on the ground’ is just as important as what the agreement between the parties actually says.

Background

Bristol City Council own a disused former care home. They engaged the services of Camelot Property Management Limited, who placed ‘guardians’ in the property in order to secure it. One such guardian, Mr Roynon, occupied two specific rooms to which only he had access. He also had use of other facilities such as a communal kitchen and bathroom. Mr Roynon entered into a written agreement in January 2014 which stated that it created a licence and not a tenancy. However, when the management company served notice to quit upon Mr Roynon in May 2016, he refused to leave the property.

Law

When determining whether an agreement is a tenancy or a licence, a Court will look beyond whatever label the parties have put on a document and take into account the reality of the occupation. As outlined in our Practical Property Guide blog, a tenancy grants “exclusive possession” of a property for a specified period of time (being a right to use a property to the exclusion of others), whilst a licence is simply a permission to do something on someone else’s property.

Decision

The Court found that the provisions of the agreement did not reflect the reality of Mr Roynon’s occupation ‘on the ground’. Whilst the agreement provided that the guardians would not be given designated rooms, Mr Roynon had exclusive possession of two rooms to which the other guardians at the property did not have access and would not enter without his permission.

The agreement also prohibited overnight guests, limited the number of guests to two at any one time (and provided that they must not be left unsupervised) and stated that any guests must be escorted off the property at the end of each visit. The Court felt that whilst these restrictions were onerous, they only restricted the way in which Mr Roynon could use his rooms. Such restrictions are a common feature of tenancies and so do not by themselves prevent exclusive possession. The absence of any power to move Mr Roynon between rooms as and when the council required, was considered to be a significant factor in indicating that there was a tenancy and not a licence. The Court found that these specific facts were sufficient to give Mr Roynon exclusive possession and that he had an Assured Shorthold Tenancy (AST).

Consequences

This case is a reminder that it is not simply enough to label a document a licence if the reality of the situation is something different. The consequences for failing to recognise when an agreement is a tenancy can result in a landlord having to terminate such agreement in accordance with the relevant statutory procedures.

Guardian providers may need to embrace the likelihood that their existing arrangements constitute ASTs and adapt their procedures accordingly. Landowners should be sure that documents are carefully drafted and arrangements put into place to ensure that any attempts to keep trespassers out do not result in letting unwanted tenants in.

So don’t be caught off guard by letting your guard down…

Ben Gant is a solicitor in the Real Estate Group at Freeths. He can be reachedThis email address is being protected from spambots. You need JavaScript enabled to view it..