Property guardianship schemes have become a popular way for landlords to protect their empty properties from squatters and vandalism. For the property guardians, the schemes typically offer plentiful living space at low cost in otherwise expensive cities. The price the guardians pay for this is that they are granted short term licences only, and have few rights compared to assured shorthold tenants. In particular, they can usually be moved on at very short notice, unlike assured shorthold tenants where landlords are obliged to give tenants at least two months’ notice and obtain a possession order, if the tenants do not leave voluntarily.
However, the County Court has found in a recent case that property guardians may in fact be assured shorthold tenants after all. This is concerning for landlords as it may impede their ability to move the guardians on quickly when they require a building back for redevelopment.
In Camelot Property Management Ltd and another v Roynon, Mr Roynon was a property guardian who had a licence of two rooms in a disused old people’s home in Bristol, and shared use of communal kitchens and bathrooms with other guardians. His agreement with the landlord, Camelot, stated that it was a licence and not a tenancy, and that Mr Roynon did not have exclusive possession of any part of the property. The concept of “exclusive possession” – the ability to exclude all others, including the landlord, from the property – is the hallmark of a tenancy, and what differentiates it from a licence agreement.
The Court found that, despite what the agreement said, in reality Mr Roynon did have exclusive possession of his two rooms. He was able to lock the doors to his rooms, as were the other guardians, and they did not have keys to each other’s rooms. Although Camelot retained keys and carried out regular inspections, the licence agreement did not allow them to move Mr Roynon to different rooms or to restrict the class of people who were permitted in his rooms.
Because Mr Roynon had exclusive possession of his two rooms, by law his agreement was an assured shorthold tenancy and not a licence.
Although this was a decision of the County Court and does not therefore set a binding precedent, property owners who use guardianship schemes should revisit their licence agreements and consider whether or not they are in reality a genuine licence arrangement. Assured shorthold tenancies are heavily regulated and if property owners determine it is likely that their agreements do grant exclusive possession to the guardian, they will need to ensure that they comply with all the statutory requirements applicable to ASTs in relation to the documents to be provided, protection of deposits and notice periods.