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Published: Fri, 12 Oct 2018

Street v Mountford [1985] AC 809

Whether exclusive possession creates a tenancy.

Facts:

The respondent, Street, granted a licence to the appellant, Mountford, to occupy two rooms at a weekly rent subject to 14 days’ notice of termination. The written agreement was titled a ‘licence agreement’ and contained a declaration that it did not create a tenancy. The respondent sought a court declaration that Mountford only had a licence. Mountford appealed to the House of Lords.

Issues:

If the agreement was merely a licence and not a tenancy then Mountford could not claim the right to a fair rent under the Rent Acts. The respondent argued that the parties had only intended to create a licence, not a lease, and the fact that the agreement was labelled a ‘licence’ meant that it should be treated as such if the other terms of the agreement were not conclusive. The appellant argued that what was important were the rights created, not simply the form of the agreement.

Held:

The appeal was allowed. A lease must grant exclusive possession of the property for a fixed or periodic term at a rent. It is the nature of the rights created which are important. Superficial labels are irrelevant. The only intention that was relevant was the intention to confer exclusive possession. An occupier of residential accommodation at a rent for a term is either a tenant or a lodger. They are a lodger if the landlord provides services or attendance which require him to have unrestricted access to the premises. Here, the landlord did not provide any services or attendance. Therefore, the agreement created a lease even though it was called a ‘licence’.


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