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  1 AC 406, then these may indeed be licences to occupy, rather than tenancies.
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.
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.
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…