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Property guardians – assured shorthold!

Property guardians are residential occupiers sent into an empty commercial building to protect it from squatters and vandalism. Typically, a guardian will occupy under a licence agreement, and pay a relatively cheap rent.

However, Bristol County Court has recently held that such a guardian occupied as an assured shorthold tenant (and thus had statutory protection). This decision was based on straightforward ‘licence’ principles, as laid down by the HL in Street v Mountford [1985]. In essence, you look to see whether there is ‘exclusive possession’ and – most importantly – you look at the reality of the situation, rather than what the documentation says. On that basis, the Property guardians in the Bristol property were Ts (and had assured shortholds).

This is a decision that many commentators had been anticipating – we all know that if you put a residential occupier into premises then there is a strong likelihood of there being a tenancy (irrespective of what the documentation says). So, merely fine-tuning existing agreements is unlikely, in most instances, to create valid licences. But, the reality is that companies providing property guardians will now have to decide whether they want to stick with the ‘licence’ argument, or simply go ahead and grant ASTs. If they do the latter, then they will have to think about tenancy deposit schemes. Moreover, since there are procedural requirements that have to be met before an s21 notice (seeking possession) can be served, it may be better for those companies to simply accept that they are ASTs, and thus comply with all the procedural requirements, rather than argue the point and then find that they had been unable to recover possession because of the procedural breaches.

As a side issue, there is also the question of the liability of the company providing the property guardian to its customer (ie the landowner). There may potentially be a claim for damages if the company breached the terms of its contract by granting an assured shorthold, rather than a licence (as envisaged under the contract). The case is Camelot v Roynon [2017] (unreported, Bristol County Court). Source: www.practicallaw.com (subscription service).

 

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