Persons right in relation to land

“Following Street v Mountford, it appeared that the legal test to determine whether a residential occupier is a licensee or a tenant is exclusive possession. However, Westminster v Clarke showed that the real test is the nature of the accommodation.”

Discuss with references to relevant legal sources…

To begin with I will cover the issues of whether a legal test is used to determine if an occupier is a licensee,,,,

Persons right in relation to land:

Licensee is the permission to be there, having a clear right! You may not exclude others. There are 2 types of licensee's 1.Bare licensee - example of this is either a friend, member of family or a cohabitant. 2 Contractual licensee is someone who is by arrangement paying fixed sum of money for the right of occupation.

In street v mount ford the case concerned the difference between a lease and a license and the rent act 1977. It was held that to be a tenant, if somebody occupied a tenancy you must have exclusive possession. There are 2 elements 1. Sole owner occupant 2…

The basic test in street v Mountford is you must have a term, rent and a possession thus all make up a tenancy.

In this case an agreement provided for exclusive residential occupation of furnished premises for rent. The interest given under the agreement was however described as a personal licence - not a lease. The question for the court was whether or not the agreement was a tenancy.

Exclusive occupation was conceded in the case and it was held that the agreement did create a tenancy.

Lord Templeman: "In the case of residential accommodation there is no difficulty in deciding whether the grant confers exclusive possession. An occupier of residential accommodation at a rent for a term is either a lodger or a tenant. The occupier is a lodger if the landlord provides attendance or services which require the landlord or his servants to exercise unrestricted access to and use of the premises. A lodger is entitled to live in the premises but cannot call the place his own. If on the other hand residential accommodation is granted for a term at a rent with exclusive possession, the landlord providing neither attendance nor services, the grant is a tenancy."

He continued: "The decision in the case is sustainable on the grounds that the occupier was a lodger and did not enjoy exclusive possession... in order to ascertain the nature and quality of the occupancy and to see whether the occupier has or has not a stake in the room or only permission for himself personally to occupy, the court must decide whether on its true construction the agreement confers on the occupier exclusive possession. If exclusive possession at a rent for a term does not constitute a tenancy then the distinction between a contractual tenancy and a contractual licence of land becomes wholly unidentifiable."

A lease or tenancy will be granted where there is a fixed or periodic term, with exclusive possession, in consideration rent. Such an agreement generally will create a relationship of landlord and tenant.

Street v Mountford concerned the case of where Mrs Mountford entered into an agreement described as a license by which Mr. Street granted her the right to occupy furnished rooms in a house for £37 a week. This was held in a clause whereby ‘this license maybe terminated by 14 days written notice.

The argument was based on whether she was granted to an exclusive possession, thus it was held that Mrs Mountford was granted exclusive possession this is where…

Exclusive possession: It is essential to the nature of a lease that exclusive possession is granted. Exclusive possession means first that the tenant has the right to exclude others, including the landlord, from the property - the tenant in effect is exercising the right as if he were absolute owner of the property. The right to enter, view and repair is often reserved, but this is not inconsistent with exclusive possession thus can be seen in the case of (Street v Mountford (1985) Ac 809 at 816C; and Lewis v Bell (1985) 1 NSWLR 731 at 734F-G).

The House of Lords reversed the decision of court of appeal holding that Mrs Mountford had a tenancy rather than a license as the agreement dictated.

Lord Templeman stated: it was emphasized that merely calling something a licensee does not necessarily make it one. Instead the reality of what had been agreed had to be discerned. What distinguishing a tenancy from a licensee was that in reality a tenant enjoyed exclusive possession of the property occupied (right to exclude others) whereas licensee does not.

To be a tenant there needs to be an exclusive possession but an occupier who enjoyed exclusive possession is not necessarily a tenant. However could be an owner in fee simple, trespasser, mortgage in possession, object of charity, or a service occupier.

In the case of Westminster City Council v Clarke [1992] 1 All ER 695where the local authority served a notice terminating Clarke's license Clarke argued that he was a tenant. The question to ask was a resident of a temporary hostel for homeless people a tenant or licensee. Whereupon it was decided that the appeal would therefore be allowed and possession order restored. The reason for this was there was nor a secure tenant. The council needed to retain possession of all the rooms in the hostel in order to supervise and control the activities of the occupiers.

Hostels are designed for homeless people. People who have suffered domestic abuse those who are basically vulnerable for example refugees or young people.. They should all be given first priority. And agreement to prove this is important it shows whether something is a licensee or a tenancy.

Lord Templeman held in this case: An occupant of a hostel for homeless and vulnerable single men had only a licence to occupy the room, and was not a tenant. There was a resident warden and a team of support workers. The intention was that residents should use the hostel as a temporary base as part of their rehabilitation. Held: An agreement which gives a right to exclusive possession is prima facie a tenancy.

The accommodation was however provided for a clear purpose, and that would require the ability to ask residents to swap rooms or to move on. "This is a very special case which depends on the peculiar nature of the hostel maintained by the Council, the use of the hostel by the Council, the totality immediacy and objectives of the powers exercisable by the Council and the restrictions imposed on Mr Clarke.

The decision in this case will not allow a landlord private or public to free himself from the Rent Acts or from the restrictions of a secure tenancy merely by adopting or adapting the language of the licence to occupy."

The decision in Street v Mountford has had an effect on a number of subsequent, important cases, which serve to illustrate the significant of the decision. One such case was Westminster City Council v Clarke. In this House of Lords case, it was held that Westminster City Council had not granted exclusive possession to the occupant of a room in a homeless hostel. This was a different outcome to the two previous cases, as the council had never intended exclusive possession for the occupant. There were genuine terms in the agreement which precluded exclusive possession, such as the right to change the accommodation without notice. It was also found to be inconsistent with the purpose of providing housing in the hostel to grant one occupant exclusive possession.

Lord Templeman also suggested that exclusive possession may be enjoyed by a licensee, and even a tolerated trespasser. A leaseholder, according to the case, has an uncontrollable discretion to exclude an unwanted stranger from his land.

Today, then, following Street v Mountford, the leasehold is no less a form of proprietary control over the estate that is a freehold. The effect of the case has been to extend the role of the leasehold as a medium of proprietary ownership through statutory extension of leasehold enfranchisement and council tenants' ‘right to buy' (in the Housing Act 1985). The case clarified the difference between a leasehold and a licence. A lease or tenancy confers upon occupier a proprietary estate to which is annexed a right of exclusive possession enforceable against the world (including the landlord). By contrast, a licence simply confers a personal permission to occupy. The case was also the first example of the courts stripping away ‘sham' terms in agreements in order to seek out the true nature of the agreement, so as to assess whether there was, in actuality, a leasehold agreement. This was significant as it closed a major loophole available to landlords who sought to avoid giving their tenants the statutory protection of the Rent Acts.