Land Law

The core objective of the present research is to provide the comprehensive answer to the question whether a Court is likely or unlikely to uphold the claim of each ‘licensee’ to be a tenant and why. In order to answer the above-captioned research question, each licensee’s case must be scrutinized. Before the licensees’ situations are analyzed in detail, the general facts of Hild’s case must be outlined as follows. First, Hild is the owner of a two-storey house with a basement underneath and a garage at the back (hereinafter referred to as property). Second, Hild’s property has been transformed into two self-contained flats, while the basement has been equipped with what is necessary for occasional accommodation for Hild’s necessities when she visits her property. Third, Hild has permitted other people to use her property under the provisions of so-called ‘License Agreements’. Fourth, Hild has allowed others to use her property usually in return for a weekly ‘License Fee’ which means that the use is commonly payable.

Taking into consideration the aforesaid facts, it is possible to arrive at several preliminary conclusions. First conclusion is that Hild has used her property for commercial purposes. This is proved by the facts that she has converted a unitary two-storey house into a couple of self-contained flats and has taken money for allowing others to use the flats and garage. Second conclusion is that the relationship between Hild and the users of her property are contractual. This conclusion stems from the fact that others have been permitted to use Hild’s property under so-called ‘License Agreements’ which should a priori be deemed as contracts. This notwithstanding, the nature and appropriateness of ‘License Agreements’ in terms of the actual relationships between Hild and other users of her property are still uncertain. It is expected that the scrutiny of each licensee’s case will help to ascertain the truth.

According to the available data, Urd is Hild’s daughter who was allowed by Hild to use the First Floor flat under the condition ‘until something comes up’. Also, it is important to mention that Urd paid Hild weekly both for the use of the First Floor flat and for Hild’s cleaning lady to clean the First Floor flat as well as Hild’s basement flat every week. The aforesaid facts, in conjunction with the general facts of Hild’s case mentioned earlier, should be taken into account by the Court while deciding on  validity or invalidity of Urd’s claim to be a tenant.

First and foremost, the Court needs to make insight into the nature of the ‘License Agreement’ between Hild and Urd if available. According to Thomas v Sorrell, licence is understood as a personal obligation which creates entitlements enforceable only between the individuals privy to the license.[1] Also, the case regulates that a licence is a dispensation or permission to use property without any interest in respect of it. The fact is that license as a legal permission can neither alter nor transfer property in any thing, ‘but only makes an action lawful, which without it had been unlawful’.[2] Hence, it follows that license is a legal permission to use certain property without having any interest in respect of it. Also, the prescriptions of the Law of Property Act 1925 regulates that license is always such a document which can be revoked by the owner any time. That means that the property licence does not transfer the right to property and can be ceased at the will of the owner of the property (licensor).

According to the Law of Property Act 1925, licence is different from lease. Analysis of the nature of license shows that it is a unilateral will of the property owner rather than a bilateral agreement. In order to ascertain that the court is either likely or unlikely to uphold Urd’s claim to be a tenant, it is necessary to examine whether Urd’s case can be qualified as the relationship of lease or license under the prescriptions of both the statutory and common law.

First and foremost, it is prudent to delineate the statutory requirements for lease. Thus, the Law of Property Act 1925 provides that leases are most usually established under a contract. Moreover, the contract of lease is valid only if it is concluded in written form and signed by the parties concerned.[3] Given this, the first prerequisite to the validity of Urd’s claim for tenancy is the existence of a written contract of lease. There is not any evidence whether ‘Licence Agreements’ between Hild and other users of her property have been concluded in a written form. Also, the case lacks of data concerning the existence and nature of the agreement between Hild and her daughter Urd.

If a ‘Licence Agreement’ between Hild and Urd has been concluded, then the court of justice needs to ascertain the nature of the agreement and its regulative power. Certainly, from Hild’s perspective a ‘Licence Agreement’ should be understood as a licence. However, Urd claims to be a tenant and, thus, must prove that a ‘Licence Agreement’ is the contract of lease under the prescriptions of the Law of Property Act 1925. In case of the existence of a written ‘Licence Agreement’ between Hild and Urd, there is a high probability that the court will consider the written ‘Licence Agreement’ a licence rather than a lease. This inference has been deduced from the provisions of the common law.

Also, Street v Mountford is a landmark case in English property law which establishes the fundamental principles that the court will eagerly deploy to make decision on either Urd’s occupation of Hild’s property is a lease (tenancy) or a licence. According to the judgment in the case, a licence in connection to property should be regarded as an entitlement to use the property for the purposes empowered by the licensor which does not create an estate.[4] Alternatively, Street v Mountford, in conjunction with the Law of Property Act 1925, regulates that tenancy is the exclusive possession at  rent whereby the tenant is liable to determination by notice or re-entry.[5] Hence, Street v Mountford accentuates on the exclusiveness of possession as the critical point for differentiation between licence and lease (tenancy). The case particularly takes into consideration the problem of residential occupancy. In view of the above mentioned, in case of residential accommodation there is not any complexity to determine whether the grant of property confers exclusive possession.

The case provides that an occupier of residential accommodation at rent for a specific term can be understood as either a tenant or a lodger.[6] The occupier is recognized as a lodger if the property owner provides the occupier with attendance and services and the owner or his servants has unrestricted access to the premises. On the other hand, the occupier will be recognized as a tenant only if the property owner provides neither attendance nor services and has limited access to the premises.[7] In other words, if the grantee is entitled to exclusive possession of the premise, he will be recognized as a tenant. John Rhys Morris acknowledges the reasoning of Lord Templeman in Street v Mountford and contends that there are three main preconditions for considering the occupier as a tenant rather than a licensee: a) exclusive possession of residential accommodation; b) fixed or periodic term of occupancy; c) a stated rent.[8]

Morris makes apparent that the exclusiveness of possession is not the decisive factor for differentiation between a licence and a tenancy. There are cases when the occupiers in exclusive possession have been held to be licensees. For instance, in Marcroft Vagons v Smith, a property owner permitted her daughter to remain in possession of property paying rent for six months.[9]

Applying the above-captioned principles of Street v Mountford to Urd’s case, it is possible to concede that Urd’s occupancy of Hild’s Flat is licence, or lodging, rather than tenancy. The facts show that Urd has not been provided with Hild’s flat for exclusive possession. Nor has Hild’s flat been granted to Urd for a fixed or periodic term. According to the facts of Urd’s case, Urd has been allowed by Hild to occupy the First Floor flat ‘until something comes up’. Also, Urd has both to pay for cleaning services and provide Hild’s cleaning lady with unrestricted access to the premises. All this evidence means that the court will be unlikely to uphold Urd’s claim to be a tenant.

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