Property Guardians seem to be a growth industry. If you haven’t come across these yet, you probably will at some point. The Guardian agency puts people into a vacant commercial or residential building to live as occupiers, effectively providing security to the owner of the building against burglary, squatting etc.. The schemes have largely received a fairly uncritical press, being held up as providing cheap accommodation for occupiers prepared to accept flexibility. I have no doubt that much of the time, that is indeed how it works.
The way in which many of these schemes seem to operate is that the agency takes a licence from the property owner, under which it is permitted to put occupiers in there to live and provide guardian services. There is little or no charge to the property owner for this. The agency vets occupiers, then puts them into a property to occupy it for a low-ish rent (maybe a few hundred a month), paid to the agency. There are sometimes other charges, for deposit, insurance and ‘fire safety packs’, and a number of conditions on occupation. The property can be required to be vacated at short notice and the owner is told that the occupier “cannot derive the right to remain in your property once you no longer require our services [source]”.
At this point, any housing lawyer’s eyebrows will be rising. But these Guardian Agency sites assure us that the arrangements have been cleared by lawyers (variously here, here, or here, for example). These are temporary licences, not tenancies, and various terms about non-exclusive occupation, rights for unannounced inspections and so on are mentioned. They are derived from a licence given to the agency by the property owner.
If we take this at face value, and put aside thoughts of Street v Mountford and Bruton v London & Quadrant Housing Trust [2000] 1 AC 406, then these may indeed be licences to occupy, rather than tenancies.
But what of the two week notice period to terminate the occupier’s licence asserted by many of these Property Guardian firms (for example here, here, here and here)?
This is a licence to occupy as a dwelling. So what of Protection From Eviction Act 1977? Do these licences escape the requirements of the PfEA 1977? Let’s have a look.
Section 1
Unlawful eviction and harassment of occupier.
(1)In this section “residential occupier”, in relation to any premises, means a person occupying the premises as a residence, whether under a contract or by virtue of any enactment or rule of law giving him the right to remain in occupation or restricting the right of any other person to recover possession of the premises.
[…]
So certainly applies to licences – occupying premises as a residence under a contract. Indeed the guardians are obliged under the terms of their licence to reside at the premises.
Section 3
Prohibition of eviction without due process of law.
(1)Where any premises have been let as a dwelling under a tenancy which is neither a statutorily protected tenancy nor an excluded tenancy and—
(a)the tenancy (in this section referred to as the former tenancy) has come to an end, but
(b)the occupier continues to reside in the premises or part of them,it shall not be lawful for the owner to enforce against the occupier, otherwise than by proceedings in the court, his right to recover possession of the premises.
(2)In this section “the occupier”, in relation to any premises, means any person lawfully residing in the premises or part of them at the termination of the former tenancy.
[…]
(2B)Subsections (1) and (2) above apply in relation to any premises occupied as a dwelling under a licence, other than an excluded licence, as they apply in relation to premises let as a dwelling under a tenancy, and in those subsections the expressions “let” and “tenancy” shall be construed accordingly.
So section 3 applies to licences to occupy as a dwelling unless excluded (under section 3A)
And then section 5
[…]
(1A)Subject to subsection (1B) below, no notice by a licensor or a licensee to determine a periodic licence to occupy premises as a dwelling (whether the licence was granted before or after the passing of this Act) shall be valid unless—
(a)it is in writing and contains such information as may be prescribed, and
(b)it is given not less than 4 weeks before the date on which it is to take effect.
(1B)Nothing in subsection (1) or subsection (1A) above applies to—
(a)premises let on an excluded tenancy which is entered into on or after the date on which the Housing Act 1988 came into force unless it is entered into pursuant to a contract made before that date; or
(b)premises occupied under an excluded licence.
[…]
The upshot appears to be that unless the licence to occupy as a dwelling is an excluded licence, the PfEA applies. Notice to determine the licence must give 4 weeks notice in writing with the prescribed information, and eviction can only be by way of court order – meaning by possession proceedings.
Can these Guardian licences fall into any of the categories of excluded licence? I can’t see how. No resident landlord or member of landlord’s family (or licensor or licensor’s family) during or indeed before the grant of licence. Licence not provided as a temporary expedient to a trespasser. Not a holiday let and not occupation coterminous with employment.
It appears that while the Guardian firms have taken some care to exclude the possibility of a tenancy (though this remains to tested in practice), the provisions of the PfEA 1977 have not received the same attention.
The upshot is that I can’t see how a two week notice period can be valid and it appears that the Guardian Agencies that rely on a two week notice period are at risk of unlawful eviction claims (and committing a criminal offence) if they rely on that two week notice period. It also means that the assurances that the Guardian agencies give to the property owners – of vacant possession of their property in a little over two weeks – may be more than a bit shaky. What if the occupier didn’t leave on two weeks notice?
There are a number of other possible issues on the residential occupation of commercial property, including the application of fire regulations, and to occupation of both residential and commercial property, the potential application of HMO regulations (which apply to premises occupied by licencees as well as tenants, as I understand it). Perhaps more on this another time, or, if anyone feels knowledgable enough, in the comments.
These Guardian Agencies have become a significant business sector. The rents and fees charged to the occupiers are not insignificant. It is about time that their operation received some scrutiny as providers of accommodation.
And, yes, there is an obvious reason for my interest in this topic. But it is one I can’t talk about…
Radio 4 programme today featured Camelot who act as guardians and are now campaigning for the extension of the new residential squatting law to be extended to commercial property. In Newcastle some years ago Camelot were challenged on their purported licences and backed off on validity of NTQ, rent increases and deposits.
ATRO (Association of Tenancy Relations Officers) have an interest in this development of the sector and officers in one area recently challenged validity of notices again. It is also concerned that some of these properties ought to be considered as liable to HMO licensing to ensure minimum safety standards
These “antisquat” property guardians are a real menace. They are big in the Netherlands, where legal challenges are starting to be mounted, pretty much on the grounds related above. A good film which interviews some clients of Camelot and the big boss is “Carefree Vacant Property,” which can be viewed for free online at vimeo.
Blurb below:
7 Dutch people of the 2 largest anti-squat agencies Camelot property management and Ad Hoc property management are followed to investigate what are the consequences of not having renters rights.
Who are using the services of anti-squat agencies? and how do politicians, housing experts, lawyers and others involved judge this rising phenomenon.
Temporary tenants/guardians, who are often unable to find a home on the housing market, are placed in empty buildings to prevent squatting and disrepair. By becoming guardians, tenants find themselves in a position where they have almost no rights. For instance, the special type of ‘’licence agreement’’ stipulated can be ended without any reason at two weeks notice, the domestic peace is not respected,
people may not throw parties and may not talk to the press without prior permission. More than 30 rules violate the European Convention of Human Rights.
The documentary makes visible this hidden reality and tries to stir up the debate around what are better ways of dealing with empty properties.
In The Netherlands the documentary has stirred a big public debate in parliament and in the media.
Anti-squat agencies are rapidly spreading in Europe and are already active in The Netherlands, England, Belgium, France, Germany and Ireland.
On the issue of HMO regs and other issues dealt with by the local council, Camelot explained at a seminar held by them that they present their ‘guardian’ arrangements as unusual and temporary situations, which council officers seem to see as within their discretion to exclude from their remit.
The seminar I attended was a couple of years ago, when even the question of Street v Mountford had not been properly addressed – the contracts then relied predominantly on their self-description as license agreements – the exclusivity or otherwise of occupation was an arguable point (This has since been beefed up by more regular and intrusive inspections). Camelot’s legal approach then was that, like local councils, judges in possession claims “generally” came round to see it their way (it was also stated that they had not lost a case, though Colin Lunt’s mention of the Newcastle case suggests to me that some amount of judicious backing-off may account for the less-than-definite language used to describe their successes).
Anyhow, the impression given was that judges were persuaded, apparently by the purported unusual and temporary nature of these arrangements, to look at cases in less than formal terms. Probably the fact that only a minority of licensees attended court and none appealed were more persuasive factors.
Presumably, neither judges nor council officers could envision the prospect of any challenge to a decision to bend the rules in Camelot’s favour. Might be something of a conflict of interest now that most London councils are relying on the property guardians’ services.
As for the question of invalid notice – wouldn’t termination by a headlicensor frustrate the residential license without need for any notice at all? If so, I’m sure any damages due the residential licensee would be minimal to zero :(
I think you are slightly missing the point. If they are licences, rather than tenancies, then possession via the courts would be straight forward once the licence was determined. No-one is suggesting that there is any great security of tenure here.
The question is the notice required to determine the licence. 2 weeks, as touted by all these agencies, is not valid if the licence falls under PEA 1977, which I think it does. Any firm relying on two weeks notice opens itself up to an unlawful eviction claim (and possible injunction for re-entry). If Camelot had any of those cases (I don’t know) they would have settled them to avoid court, where they would very likely have lost and blown their business model at the same time.
Damages for unlawful eviction run until alternative settled accommodation is found, so not minimal at all.
Termination by head licensor would end the sub licences, but leave the head licensor having to take possession proceedings to get the occupiers out, which is not what they want! It would leave the agency open to claims by both the head licensor and the occupiers for breach of contract at least.
As for HMO regs, etc. many councils have started taking a rather sterner approach to enforcement in the last year or two. I suspect Newcastle aren’t alone. I have heard a story from Manchester about another agency being rejected by the Council…
I hope this reads OK as the “Leave a Reply” section in the new-style site is a little difficult to work. Anyway…
Are you correct in interpreting the excluded tenancies and licences to be dependent on “resident” landlords or licensors? The relevant bit refers to whether or not “the occupier shares any accommodation with the landlord or licensor”. That sharing of accommodation wording is different to the the wording in the next requirement that before the tenancy or licence was granted the landlord or licensor occupied the premises “as his only or principal home”. My question would be, therefore, whether there is no need for residential sharing of accommodation during the term of the tenancy/licence and whether it would be enough that there was residential occupation by the landlord (as a principal home) before the tenancy/licence and some kind of non-residential accommodation sharing once the tenancy/licence began (say some office space in the property used by the Guardian company). I realise this may well not be made out on the facts but is it, I wonder, a correct explanation of the law?
JAC, your interpretation is right. I meant to put ‘No resident landlord/licensor during or before the licence’. I have no idea why I didn’t actually write that and will amend accordingly.
But the nature of these agencies is such that there can be no residential occupation by the licensor at all, so does not affect my analysis.
As to the Licensor no doubt that would be correct but it could hypothetically, I suppose, be the case that the occupant has a licence from the owner who occupied the property before the licence and that the Guardian organisation then (under some kind of separate licence) share the accommodation with the resident licensee. All very unlikely to be the facts in any case I suppose but, perhaps, legally accurate.
ps – the “Leave a Reply” might need looking at as it is quite difficult to read the first line of any proposed response as it is being typed.
JAC I see what you mean about the comment box. I’ll try to fix it, but this may not be easy…
On your hypothetical, the occupant wouldn’t then have a licence from the Guardian Agency, so the whole situation would be different and outside what is being discussed.
I can’t see how a Limited Company can be ‘residing’ anyway. In which case it can’t be resident or formerly reasident licensor in any situation.
Comment form thing hopefully sorted…
Not a lawyer here, so I may well be commiting a schoolboy error, but couldn’t section 5 be circumvented by making the contract for a fixed term and putting in a break clause specifying a shorter length of notice? It’s nitpicking because section 3 would still apply regardless but I figured I’d ask out loud for future reference.
You can’t contract out of the PEA by ‘agreeing’ a shorter period of notice in the licence.
I can’t really see much that would make occupiers excluded unless there are firms that don’t charge rent. Even then, could acting as a guardian be seen as a service in lieu of rent?
In terms of the argument between tenancy and license, I saw one of these agreements and there was a term on exclusive possession and the right to move occupants around rooms in the property should the need arise, similar to what can happen in some hostels.
Yes, the licence agreements are carefully written to try to exclude a tenancy, so stating ‘not given a specific room’, can put other people into the ‘shared’ property, inspections without notice etc.. All intended to defeat exclusive occupation. However, this is not tested as far as I know and it would largely depend on the actual facts of the occupation….
Could this type of occupancy be considered tied accommodation, where the occupant is classed as a service occupier? In this case s.3 PEA would not apply and a court order would be required if they remained after the notice?
Only if the ‘Guardian’ occupiers were employed by the Agencies. In the kind of set up being discussed here, they are not, as I noted in the post – not occupation coterminous with employment.
As I saw their signs popping up around the place, I assumed that they were paying their guardians, rather the other way round – for the reasons you give. The owners of empty properties should realise they can’t get something for nothing.
The agencies, on the other hand, seem to have found a way to get just that.
That is exactly how it should be in a perfect world.. But in reality the rent they are charging has reached more or less the same rates as private rent these days. What I find the most ridiculous is that couples sharing 1 unit (room) have to pay double licence fee – per head, not per unit. And in that case the rent comes up to even higher rate than average private rent of a room in shared property.
I am currently living as a property guardian and the reality is pretty awful. In all the blogs / articles I have found so far people are only focusing on owners rights and eviction process but doubt many of those who live through this scheme will risk having lawyers & the lot on their backs by not vacating the property. Sadly the main reason for being a property guardian and giving up your rights is not being able to afford anything else. And for one not vacating the premises when asked will only lead to not getting a chance to relocate within the company, loosing the deposit and ending up staying on the streets. So the guardians are pretty tied up to all the humiliating rules of these companies with no rights and no watchdog controlling what happens in this industry. Some of the properties (or rather most of them) I have viewed in the last 3 years haven’t had either hot water, heating or had mold 2 inch thick hanging from the ceiling – and they all have been passed as inhabitable by property guardian companies. In exchange guardians will pay roughly £350 per head + bills & council tax for rotten, moldy, leaky rooms with no rights and no guaranties. Ex-squats that have been left for decay by their owners for 3 decades are now filled up with people occupying every single room (even living rooms) squeezing out every penny they can get. I know of course there are some real bargains out there where you can get a steal from that money and live in fancy castles but mostly shocking for me is what people are ready to put up with just because of how crippled London’s housing situation is. The shortage of actual space in London and never ending demand allows the property guardian companies not only charge the ridiculous amount of money from the guardians but also doesn’t oblige them to comply to any standards, and hey – no one is there to control them.
During my 3 years as a guardian I have had to put up with mushrooms the size of my fist growing in a room opposite the hallway because of a water leak and yes, my windows wouldn’t open so can imagine the stench. Landlord cared a bit? Nah. And faulty electricity in bathroom leaving me with a choice – to risk burning down the place or shower in darkness for over 6 months. Landlord sent someone to fix it? Nah. And sharing a 4 bedroom flat that has 2 installed power sockets altogether – all electrical appliances running on extensions. Fire hazard? Nah, not according to them. But ‘Health & Safety’ is being preached every time there is a breach in the holy ‘Licence agreement’ such as having a pet (goldfish in my neighbors case), having your partner/friend in the premises when you’re not present, having to get WRITTEN permission to be absent for longer than 24 hours, etc. Is it supposed to be your home or Nazi camp? I understand the need to protect the property but all common sense and providing a decent service to fellow human beings has been replaced by greed and a whip just because they can get away with it.
Long gone are the times when you would put up with ‘some’ inconveniences for the sake of paying less than a half the private market rent. Now it has come to a point where you have to obey the rules, mostly live without at least one of – no heating/ hot water/ kitchen/ light/ washing machine/ internet (know these two are luxuries), etc etc AND pay nearly private rent rates.
The main reason I’m writing all this is the lack of information around of who has the guardians back, clearly not the company? How come in this all developed country they have missed out having any legislation or control mechanism for property guardianship sector?
Regards,
L.
Hi L- I’m working on a piece on property guardianship and was wondering if you’d be willing to speak to me about these experiences (anonymously, if you prefer.) If you’d be willing to chat, I’m on barbaranancyspeed [at] gmail.com.
Probably this thread is too old to be bumped/responded to, but I am curious – why is there a stronghold on property guardians by the guardianship companies? Couldn’t the property owner cut out the middleman and arrange a licence of their own?
Much harder, due to direct relationship looking more like landlord and tenant, but not impossible. But for property owners, it is easier to hand off to others, particularly now as owners don’t pay anything/get a cut of the profits.
I was thinking that it’d be interesting to use the market of the guardianship schemes (landlords believing they need to pay for this service), to provide free housing for homeless people, and to create temporary community centres etc.
Then I realised that’s exactly what short-life housing co-operatives do. The difference is that they don’t advertise themselves to landlords as antisquatting service providers… and they don’t ask the occupants to pay rent.
Do you think there could be a way to learn from guardianship schemes in order to bring back short life co-ops (plus maybe integrate some of the community building innitiatives of the likes of Dot dot dot properties).
I realise this would not fix the precarity of the license form, nor resolve any long term housing problems, but it would at least be a way of subverting the scams that are guardianship schemes towards more urgent necessities.
Short life co-ops do ask for rent. And given that landlords now ask for a cut from Guardian companies, the landlord is till making an income from the property.
In addition, the legal position on short life housing co-ops is much more complicated, in particular regaining possession of the property.
For these reasons, though I agree in principle, I am doubtful that it will happen in practice.