225: Is a property guardian a licensee or a tenant?

A property guardian occupied NHS premises in Hammersmith as a licensee, rather than a tenant, and could not be said to have ‘exclusive possession’ of the premises.

The facts of Global 100 Ltd v Laleva [2021] EWCA Civ 1835 were that the owner, the NHS, entered into an agreement with a property guardian company for some vacant premises. The arrangement allowed working individuals to occupy their own designated, lockable space at the Stamford Brook Centre, Hammersmith under weekly licences.

Ms Laleva entered into a temporary licence agreement as a property guardian. The licence stated that no tenancy was created and that, upon termination of the weekly licences, the guardian was to vacate.

The agreement gave the property guardian company (as licensor) the right to alter the extent and location of the space, required amicable sharing of the whole with the other property guardians and referred to ‘non-exclusive occupation’ of the whole premises.

On termination of the agreement, Ms Laleva argued that she was entitled to an assured shorthold tenancy due to the fact that she had been granted exclusive occupation of a lockable room which she had occupied since April 2020 at a weekly rent. She claimed that the agreement with the licensor was a tenancy and / or that the licence arrangement was a sham.

The Court of Appeal accepted that if an agreement grants an occupier the right to exclusive possession, for a term at a rent, then it is likely that a tenancy has been created.

However, the Court confirmed that exclusive possession of a designated space is not necessarily conclusive in determining whether a tenancy has been created. It found that the terms of the agreement were inconsistent with the grant of exclusive possession, particularly as the licensor could alter the location and extent of the living space.

The key point determined was that sole use of a space is not the same as exclusive possession, and that the reasons why the occupier has been allowed into occupation must be carefully considered when determining the legal nature of the arrangement.