It ain’t what you do, but the way that you do it – property guardians & ‘licences’

(1) Camelot Property Management Ltd, (2) Camelot Guardian Management Ltd v Greg Roynon. County Court at Bristol, 24 February 2017 (copy of Judgment)

We’ve noted the issues bubbling away between Camelot and property guardians in Bristol (here, and here), and now we have a judgment – on a preliminary issue, but a judgment nonetheless – by HHJ Ambrose. And it contains a hefty dose of ‘look, I told you so’.

Mr Roynon was and is the occupant of two rooms in a former Bristol City Council elderly persons home in Bristol, under an agreement with Camelot Guardian Management Ltd (CGM). He had shared use of kitchen, washing and living areas with other occupants who also had agreements with CGM.  Bristol City Council had entered an agreement with  Camelot Property Management Ltd (CPM) to allow guardians to be placed in the property.

CGM and CPM brought possession proceedings on the basis that Mr R was a licensee and that his licence had been ended by notice to quit.

There was a trial of two preliminary issues. i) Was Mr R a licensee or, as he asserted, an assured shorthold tenant? ii) Who were the parties to the licence/tenancy agreement?

On the licence/tenancy issue.

It was agreed that Mr R’s occupation was for a period and for a rent. That satisfied two of the criteria for a tenancy in Street v Mountford (1985) 1 AC 809. What was at issue was the third – exclusive possession.

(For non-housing lawyer readers, Street v Mountford was the defining case on whether the wording of a licence agreement was definitive, or whether the actual facts of occupation meant that a tenancy had been created. Street held that the facts of the nature of occupation could overrule the express terms of a written agreement as to the nature of tenure – licence or tenancy. The written agreement could be, in effect, a sham).

Mr R had been given keys for two rooms – both lockable. He had remained in these rooms from the outset.

The terms of the signed agreement clearly purported to create a licence, instead referring to ‘permission to share living space’.

There was no reliable evidence from either side as to the wording of the advertisement to which Mr R had responded.

It was accepted that when Mr R was shown the property by a Camelot person, he was asked to choose his rooms and did so. Further, he was told by Camelot’s representative that these would be his rooms and the remaining facilities would be shared.

After signing the agreement, Mr R was issued with keys to the property and also to the two rooms. Camelot emailed the other guardians in the property to tell them which rooms Mr R would be occupying. The rooms were lockable and no other guardian had keys to those two rooms.

Camelot’s own officer’s evidence was that if a guardian wanted to move rooms, they approached Camelot, who would arrange for this, with no involvement from other guardians in the property.

The court’s finding was that from initial inspection through to occupation, the discussion between Camelot and the ‘guardian’ was which room they wished to occupy and having chosen, they were told this would be their room to occupy. The other guardians were not involved in this decision but were later told by Camelot which room(s) the person would be occupying.

If they later wished to change rooms, this was between the individual occupant and Camelot, not the other guardians in the property.

The reality was therefore very different to the licence agreement, which simply provided that the guardian would have a shared right to occupy the building and all other arrangements were between licensees.

On exclusive occupation, no other guardian could access Mr R’s rooms, as Camelot had given him alone keys. Then the issue was the clauses in the ‘licence agreement’ by which Camelot sought to limit the use of the room. These clauses did impose limits, such as no more than 2 guests at one time, but did not entitle Camelot to move a guardian from room to room. Restrictions on the use of a room are a common feature of tenancies.

Camelot’s licence agreement did not have any express provision for access to the property by Camelot for inspection or repair. Camelot argued this meant it was a licence as an express provision would be consonant with a tenancy. The court was not impressed: “I do not accept that the reverse is true, namely that it follows from the absence of an express reservation that a licence has been created”.

On actual inspections, Camelot have reserved a right to inspect at any time without notice. On the evidence inspection had mostly been on 24 hours notice, but there had been ‘without notice’ inspections where someone had stood in the doorway and viewed the room- Camelot having keys.

However, this did not amount to an incompatibility with exclusive possession. For example, the agreement in Street v Mountford provided that

The owner (or his agent) has the right at all times to enter the room to inspect its condition, read and collect money from meters, carry out maintenance works, install or replace furniture or for any other reasonable purpose.

Similar levels of access were found in Bruton v London & Quadrant Housing Trust (2000) 1 AC 406. Again, not held to be incompatible with exclusive possession.

Here, inspections were monthly and amounted to a view of the room from the doorway. As such, not incompatible with exclusive possession.

There was no staff on the premises, or statutory duty, unlike Westminster CC v Clarke (1992) 2AC 288. Unlike Huwyler v Ruddy (1995) 28 HLR 550  there was no service provision, changing bed-clothes or the like.

So, exclusive possession was found on the facts. Mr R had an assured shorthold tenancy of the two rooms.

On who was the claimant/party to the agreement, Mr R had entered an agreement with CGM. This was  a separate corporate entity to CPM. From the ‘licence’ agreement CGM were not acting as agents for CPM. So CPM were not parties to the agreement.

Solicitors for Mr R are Avon & Bristol Law Centre, Counsel Russell James of Magdalen Chambers

Comment

This is a judgment on the preliminary issues. I understand that there is also a counterclaim, on deposit protection, disrepair and unlawful eviction. At least part of this should clearly succeed, given the finding of an AST. There maybe a complication with the distinction between CPM and CGM, but, absent any clear evidence of the basis on which CGM was able to grant ‘licences’ (tenancies) out of CPM’s agreement with the council, I’d say CPM was stuck with the tenancy.

This finding is not a surprise – we have been warning guardian firms about Street v Mountford for years. That said, the finding on the inspection regime – inspection without notice – is somewhat beyond what I would have expected. But there was clearly plenty of evidence on room choice and management to make the case.

Property Guardian firms need to be very careful about only granting a licence, with Street v Mountford clearly in mind. The consequences for them if they don’t, as this case shows, can be very bad indeed.

That said, the special pleading that Camelot put in ahead of this judgment – local press – is nonsense. This is not the end of the guardian model. Property Guardians can indeed be licensees, depending on the facts. It is up to the guardian company not to be so stupid or lazy as to create a tenancy by accident.

There is a similar possession case on another property still underway in Bristol, I understand. I’d be surprised if it wasn’t wrapped up now. The broader lessons for property guardian firms should be clear – granting occupation of a specific space or room, even de facto, leaves open the risk of a finding of a tenancy.

And yes there has been free legal advice on this site for years to that effect….

 

 

About Giles Peaker

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London.
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Posted in Assured Shorthold tenancy, Housing law - All, Licences and occupiers, Possession and tagged .

11 Comments

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  2. If the “tenants” where given access to all of the property (no locks on internal doors), provided with lockers they could put their own padlock on, and where required to cooperate with each other on deciding where they put a bed….

    Do you think the outcome would have been the same?

    (I am assuming one agreement per tenant, rather then with a group, and the agreement limited number of other tenants that make be taken. E.g a limit of 20 if their is 20 bedrooms, but nothing say who got witch room etc.)

    • Probably would be more likely to be licences – though in those circumstances, would be key that different people put in at different times, not as a group.

      That is how the guardian model is supposed to work.

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  4. Can I have some information about room inspections. I live in a guardianship scheme and recently inspections have been done with no prior notice at all and often when guardians are out of the property. What is the legal standing? Do they need to give notice and do they need to leave any note to say they have been?
    Thanks

    • No, if it is a licence, they don’t need to give notice or for the Guardians to be there. No requirement to leave a note,m but polite.

  5. I live in a guardian property. We have been given notice to leave our property shortly. We have all paid £600 deposits which have not been put in a landlords deposit scheme. We have been told to leave the property empty but the property has been a guardian property for 8 years and there are pieces of furniture and white goods belonging to people who left years ago. There is a vague threat that we will all have some of our deposit deducted to clear these items out. Could you tell me where we stand on this? We too were allotted rooms and given keys to specific rooms by the property guardian company.

    Thanks
    M A

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