Leases & Licenses

Property in land fluctuate inconsistently between 3 different perspectives (by Gray & Gray):

Property as right, as fact, as responsibility

Property as a right

* a complex calculus of carefully calibrated estates and interests in land; not necessarily visible or material; property can be understood as an abstract right.

Property as a fact

* property is an absolute dominion, the propriety of property, emotional security & sovereignty; ‘the externally verifiable modalities of possessory control’ = you can look at the way people behave on the land and that would tell you how their relationship to the land possessed.

Property as a responsibility

* they assert this understanding economically in terms of the utility that characterises a relationship with the land; the elements of utility required to be held in balance and mediated by state; state insists that we behave responsibly to contribute to collective land exploitation; less a right, more a restraint.

License is

a personal permission, is temporary, does not bind 3rd parties, and posses no threat to those who might acquire an interest in land, and is conditional

Lord Templeman in *Street v Mountford* (1985) 1 ac 809 defined a lease as

\-       A grant of land

\-       For a term (specified)

\-       At a rent – although this may no longer be required.

\-       With exclusive possession of the land (tenant can exclude anyone but the landlord)

Lease is

property interest

4 ‘unity’ requirements of joint tenancy

1. **Unity of possession**: each joint tenant must be entitled to possession of *every part* of the co-owned land.
2. **Unity of interest**: each joint tenant’s interest in the estate must be the same in extent, nature, and duration.
3. **Unity of title**: each joint tenant must derive their title to the estate from the same act (e.g. adverse possession) or the same document.
4. **Unity of time**: the interest of each joint tenant must normally vest at the same time.

Unity of possession is

each joint tenant must be entitled to possession of *every part* of the co-owned land.

Unity of interest is

each joint tenant’s interest in the estate must be the same in extent, nature, and duration.

Unity of title is

each joint tenant must derive their title to the estate from the same act (e.g. adverse possession) or the same document.

Unity of time is

the interest of each joint tenant must normally vest at the same time.

To determine whether joint occupants of accommodation with separate accommodation agreements have a joint tenancy (giving them exclusive possession together), we can ask:

1. Do the agreements require the signatories to become joint tenants with others?
2. What would happen if one of the tenants died? If the answer is that the landlord would move someone else in, and the other tenants would have no power to prevent this, then they cannot have a joint tenancy (because joint tenants enjoy exclusive possession).
3. Are the four unities present?

The Housing Act 1988

* No new Rent Act tenancies from 15th January 1989
* New tenancies are either assured or assured shorthold tenancies
* Market as opposed to fair rents
* Limited succession rights
* Stronger rights for possession particularly when there are rent arrears
* Assured shorthold tenancies (which are now the default form of tenancy) enable possession to be granted with 2 months notice
* Serious reduction in incentives to grant licences
* Greater insecurity for tenants

The Housing Act 1988: Increasing re-regulation for tenants:

1.  Extension of obligations under s.11 of the Landlord and Tenant Act 1985
2. Homes must be fit for human habitation
3. Tenant deposits are protected

The Housing Act 1988: Increasing re-regulation for residential occupiers:

1. Housing Health and Safety Rating System – Housing Act 2004
2. Licensing of certain properties including HMOs
3. Financial penalties and Rent Repayment Orders

Who are Property Guardians

* A property guardian company finds residents (“property guardians”) for $**unused premises**$ that they normally don’t own, for the purpose of **securing** and **safeguarding** the property.
* Often commercial or industrial buildings that are generally not intended or have not been significantly adapted to be used as residential accommodation. They can range from old factories and offices to schools and pubs.

Downsides of property guardianship

* **Not adapted for residential living**
* **Can pose health and safety risks**
* **Generally living in these properties costs less**
* **Insecure**
* **Government ambiguity about status**
* **Non-standard living conditions**

***Porter v Commissioner of Police for the Metropolis [1999] AII ER (D) 1129 (CA):*** **Facts**

* Miss Porter had a dispute with her electricity supplier, they claimed they’d connect electricity to her flat but never did
* She went to the electricity showroom and said she’s staying there and not leaving until the electricity is sorted out.
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***Porter v Commissioner of Police for the Metropolis [1999] AII ER (D) 1129 (CA):*** **Relation to licenses**

* Once the employee asked miss Porter to leave and she refused, she became a trespasser, so changed her status in an unlawful one, so police had right to remove her.

***Aldrington Garages Ltf v Fielder 1987 WLUK:*** **Facts**

Where the parties **succeed in producing an agreement** which is in fact a __***license***__ and NOT a tenancy they should not be prevented from that course by the courts

**The Rent Act 1977: provided tenants with…**

* Provided rights for tennants


* Rent regulation (didn’t have to pay more than a fair price)
* Security of tenure (always at the discretion of court, landlord

has to show strong evidence if they wanted to evict you)
* Strong succession rights
* Licensees excluded from protections

**The Rent Act 1977:** **Council housing (very dominant tenure then)**

* The Right to Buy Housing Act 1980


* Secure Tenancies
* Limited building
* Beginning to decline but still a dominant form of tenure, Thatcher restricted the amount of council houses being built

***Street v Mountford (1985)*** = the definition of lease: Facts

* Mrs Mountford and her husband lived on top floor of a house divided into ‘flatlets’, owned by Mr Street (solicitor)
* an agreement was signed in 1983: a payment of £37 per week by Mrs
* a ban on anyone other than Mrs occupying the rooms without prior permission
* a right of the owner’s part to enter the rooms to inspect them, read meters, carry out maintenance, etc
* a requirement to keep rooms clean and tidy
* agreement terminable on 14 days’ notice
* the tenancy was not protected under the Rent Act 1977.

***Street v Mountford (1985)*** = the definition of lease: Legal issue

* Mrs decided to register a fair rent under the Rent Act
* Mr Street argued that the intentions of the parties are evidenced in the terms of the agreement.
* If the agreement was merely a **licence** and **not a tenancy (lease)** then Mountford **could not claim the right to a fair rent under the Rent Act**. The respondent argued that the parties had $only intended to create a licence, not a lease$, and the fact that the agreement was labelled a $‘licence’$ meant that it should be treated as such if the other terms of the agreement were not conclusive.
* The appellant argued that what was important were the rights created, not simply the form of the agreement.

Difference between lease and licence:

Licence **does not confer exclusive possession** of the land; where there is **exclusive possession of the land** then the agreement is a **lease** *unless it falls within an exception*.

Templeman’s definition of a tenancy

A tenancy \[is\] an estate in land; A tenant armed with exclusive possession can keep out strangers and keep out the landlord unless the landlord is exercising limited rights reserved to him by the tenancy agreement to enter and view and repair.

Templeman’s definition of a licensee

A licensee **lacks exclusive possession** can in **no sense call the land his own** and cannot be said to **own** any estate in the land. The licence **does not create an estate in the land to which it relates** but only makes an act lawful which would otherwise be unlawful. 

Templeman’s definition of a residential accommodation

**Occupiers are lodger**; if landlord provides attendance or services which require the landlord or their staff to exercise unrestricted use of the previses. **Lodger is entitled to live at a premises but cannot call it his own**; **not a tenant because they require the landlord to constantly require the access.**    

***Antoniades v Villiers (1990)*** = sharing residence: **Facts**

* **Mr Villiers and Miss Bridger occupied an attic flat in Mr Antoniades’ house, they were a couple but not married.**
* **On their request, Mr Antoniades supplied a double bed.**
* ***Separate, largely identical agreements*** **were signed with Mr Villiers and Miss Bridger, in which they each agreed:**


1. **to pay £87 per month,**
2. ***to share the rooms with the licensor*** **and others whom the**

**licensor might from time-to-time permit to use the rooms,**
3. **not to obstruct such use,**
4. **not to use the rooms in any illegal or immoral way,**
5. **not to allow others of their choosing to use the rooms,**
6. **to vacate the flat if they should marry, and**
7. **to use the rooms together with the licensee and permit others to**

**do so**


* **later on, they signed another agreement creating a license saying that no one would have any exclusive possession of the flat**
* **this agreement did not come under the Rent Act**

***Antoniades v Villiers (1990)*** = sharing residence: **How to treat the agreement**

* the court must consider surrounding circumstances, including any relationship between the prospective occupiers, the course of negotiations and the nature and extent of the accommodation and the intended and actual mode of occupation of the accommodation


* clear that Mr Antoniades did not have any real intention of sharing his accommodation with Villiers and Bridger, and that he wasn’t actually going to allow other people to use it
* The written agreement was only a disguise to contract out of the Rent Act by designating the lessees effectively as license holders and not tenants.
* Separate agreements can be interdependent (in particular where they contain identical terms)
* Examine the surrounding circumstances (e.g. did the occupants apply for the accommodation jointly, and did they seek joint and exclusive possession of the premises?).
* Specific terms in an accommodation agreement can be a pretence (or sham) and therefore take no effect: **A LEASE.**

***AG Securities v Vaughan (1990)*** **- sharing residence: Facts**

* 4 young men shared a flat in London, subject to an agreement with AG Securities. Each young man signed a separate agreement and if one of them left, this person would be replaced. If current residents would know someone, the landlord could interview and assess them, and decide.
* Agreements: share the flat with up to 3 other people, not to impede the use of the flat by others, to meet with other prospective occupants to agree terms of sharing costs, not to assign the agreement to anyone else, the agreements made no provision for allocation of individual rooms to individuals residence by AGS.

***AG Securities v Vaughan (1990)*** **- sharing residence: Legal issue**

* whether these individuals could ***rely on a collective lease to the property which would afford them protection under the relevant landlord/tenant legislation, which was The Rent Act 1977***; it was important for the court to consider the nature of the agreements that were struck between the landlord and the licensees.

***AG Securities v Vaughan (1990)*** **- sharing residence: Outcome**

1\.     AGS was under **no compulsion to give each occupant an agreement containing the same terms** or to require any payment.

2\.     The **agreements signed** did not compel any occupant to become a j**oint tenant of the whole flat** with someone who moved into the flat later on

3\.     **No one had agreed to become a joint tenant**.

4\.     The company had the right under the agreement to **move a new occupant into the flat when a room became available**.

5\.     The company had the right under the agreement to move a new occupant into the flat when a room became available. Thus, **no tenant was assigned a room** and had **no exclusive possession** of any part of the house – this means it was A $**LICENCE**$.

The 4 residents could thus **not be tenants**; they had to be $**licensees**$.

***Westminster City Council v Clarke (1992)*** **= exceptional case (deals with housing people under statutory homelessness): FACTS**

* Mr Clarke had been homeless
* Westminster City Council, as a local housing authority under statutory duty, accommodated him.
* Council-owned accommodation was a terrace of houses comprising of 31 single rooms, each with a bed and limited cooking facilities. Accommodation had a warden supported by a resettlement team of social works who required constant access to the house.
* Was described as $**license**$.
* Clarke was troubled and caused a nuisance, and they sought to terminate the agreement. As a result, Clarke **smashed up the room he was occupying and claimed to be a secure tenant**.
* A secure tenant could not be evicted without: WWC serving notice, court finding Mr Clarke had breached a ground conduct constituting an annoyance to neighbours, and the court deciding eviction reasonable.
* a sham

***Westminster City Council v Clarke (1992)*** **= exceptional case (deals with housing people under statutory homelessness): DECISION**

\-       License

\-       No exclusive permission – ‘highly understandable for the council to grant to any occupier of a room exclusive possession which obstructed the use by the council of all rooms of the hostel is in the interests of every occupier’.

\-       Clarke was not entitled to occupy any particular room (share)

\-       Workers could enter the room any time.

\-       When determining whether a term is a pretence or not, the court can look into the purpose of the inclusion of the term.

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***Bruton v London Quadrant Housing (1999*****) = exceptional case: FACTS**

* L&Q held a property on a license from the London Borough of Lambeth. L&Q had obligations to host the **homeless people** in fulfilment of Lambeth’s statutory duties
* Lambeth and L&Q wanted to **avoid granting tenancies (lease)**; their position was that if L&Q **only had a license** then it could not grant anything more than a license.
* If L&Q had a license, they could not provide anything more than a license to others: *Nemo dat quod non habet (*you cannot give what you don’t have).
* Mr Bruton claimed repair rights under s.11 of the Landlord and Tenant Act 1985, these rights only available to tenants with tenancies less than 7 years.

***Bruton v London Quadrant Housing (1999*****) = exceptional case: DECISION**

House of Lords decided:

* Considered themselves bound by *Street v Mountford*.
* That all the elements required to demonstrate a tenancy were present
* Special circumstance of the agreement was insufficient to counter the fact of exclusive possession.
* Despite the fact that L&Q had a license on property, it appeared to grant a tenancy.

***Bruton v London Quadrant Housing (1999*****) = exceptional case:** How could L&W grant a lease when it only had a license?

1\.     Possibly a tenancy by estoppel: you cannot deny there is a lease when you behave as if you have granted one, BUT the Law Lords specifically rejected this approach.

2\.     The House of Lords said this was a __non-proprietary lease__: you have access to rights under section 11, but that does not create a property interest. Peculiar hybridity between lease and license, tenancy and license.

What is a sham agreement? 

A sham agreement is a contract that claims to give the parties different rights from the ones they have in law.

Examples in cases: ***Westminster City Council v Clarke***, ***Antoniades v Villiers***

***Camelot Guardian Management Ltd v Khoo [2018] EWCH 2296:*** FACTS and DECISION.

\-       The premises were former local authority offices of central London.

\-       Property guardians were to protect premises from trespassers (14 of them including Khoo occupied around 11 rooms).

\-       Khoo had signed an agreement described as license. It stated: no exclusive possession, space shared with other guardians, he was to vacate as soon as the agreement terminated.

\-       Local authority wanted the property back for redevelopment.

\-       Khoo contended he occupied property as a tenant and refused to vacate.

\-       Decision: license, not a lease.