This advice will determine the legal status of Alfie, and of Rosie, Martin, and Isobel, in the houses they occupy. The central issue is whether they are tenants, who hold a proprietary interest in the land (a lease), or licensees, who merely have a personal permission to be there. The distinction is crucial as tenants have statutory protections, for instance under the Rent Act 1977 or the Housing Act 1988, which do not apply to licensees. The leading authority is the House of Lords decision in *Street v Mountford* [1985] AC 809, which established that for a tenancy to exist, there must be exclusive possession for a certain term at a rent.
Alfie
To determine if Alfie has a lease, we must apply the three criteria from *Street v Mountford*.
Firstly, Alfie pays rent of £300 per week, which satisfies this requirement.
Secondly, the arrangement must be for a certain term. Fraser granted the house to Alfie for ‘four years or as long as you are teaching at Abbey Grove’. A lease must have a certain beginning and a certain end. In *Lace v Chantler* [1944] KB 368, a lease ‘for the duration of the war’ was held to be void because the term was uncertain. Alfie’s term has a maximum duration of four years, but it may end earlier on an uncertain event (when he stops teaching). This renders the term uncertain, which would typically prevent the creation of a lease (*Prudential Assurance Co Ltd v London Residuary Body* [1992] 2 AC 386). While the Supreme Court in *Berrisford v Mexfield Housing Co-operative Ltd* [2011] UKSC 52 found that an uncertain term granted to an individual could be converted into a 90-year lease under section 149(6) of the Law of Property Act 1925, this is unlikely to apply here as the arrangement is clearly tied to Alfie’s employment, rather than being intended as a tenancy for life.
Thirdly, there must be exclusive possession, meaning the right to exclude all others, including the landlord, from the property. While Alfie lives alone, the circumstances of his occupation suggest he may be a service occupier. A service occupancy arises where an employee is required to live in the accommodation for the better performance of their duties (*Norris v Checksfield* [1991] 1 WLR 1241). Fraser’s reasons for Alfie living on-site were to deter vandalism and ensure punctuality. This indicates that Alfie’s residence on the premises benefits his employer and is linked to his work. If his occupation is for the better performance of his duties as a teacher, he will be a service occupier and therefore a licensee, irrespective of the other factors.
In conclusion, Alfie is almost certainly a licensee. The uncertain term is a significant obstacle to finding a lease, and more importantly, the connection between his housing and his employment strongly points towards a service occupancy, which negates exclusive possession.
Rosie, Martin, and Isobel
The arrangement for Rosie, Martin, and Isobel must also be assessed against the *Street v Mountford* criteria. They have a certain term of two years and they each pay a weekly ‘occupation fee’, which is clearly rent. The key issue is whether, as multiple occupiers, they have exclusive possession. For this, they must show they are joint tenants, which requires the presence of the ‘four unities’: possession, interest, title, and time (*AG Securities v Vaughan* [1990] 1 AC 417).
Here, they all signed the same deed (unity of title), which was for the same duration (unity of interest), and they presumably moved in together (unity of time). They share the house and so have unity of possession. The four unities appear to be present.
Fraser has, however, included clauses in the agreement designed to deny exclusive possession. The courts will disregard any clauses which are ‘shams’ or ‘pretences’ and do not reflect the reality of the situation (*Antoniades v Villiers* [1990] 1 AC 417). The heading ‘Licence Agreement’ and the term ‘occupation fee’ are not conclusive; as Lord Templeman stated in *Street*, the court is concerned with the substance of the agreement, not the label.
The clause allowing Fraser’s son, Leslie, to stay overnight seems intended to deny the occupiers exclusive possession. However, Fraser’s admission that Leslie was unlikely to visit ‘any time soon’ strongly suggests this clause was never intended to be exercised. As in *Antoniades*, where a similar clause was held to be a pretence in the context of a small flat occupied by a couple, this provision is likely a sham.
Finally, Fraser retaining a key does not automatically negate exclusive possession (*Aslan v Murphy* [1990] 1 WLR 766). The court will ask why the key is retained. If it is for providing services like cleaning, it may point to a licence. If it is for emergencies or pre-arranged repairs, it is consistent with a tenancy. As there is no mention of Fraser providing services, the retention of the key is unlikely to be fatal to a finding of a tenancy.
Therefore, it is highly likely that Rosie, Martin, and Isobel are joint tenants. They satisfy the requirements of a certain term and rent, and they have exclusive possession as joint tenants. The clauses in the agreement that point to a licence appear to be pretences.
References
* *AG Securities v Vaughan* [1990] 1 AC 417
* *Antoniades v Villiers* [1990] 1 AC 417
* *Aslan v Murphy* [1990] 1 WLR 766
* *Berrisford v Mexfield Housing Co-operative Ltd* [2011] UKSC 52
* *Lace v Chantler* [1944] KB 368
* *Norris v Checksfield* [1991] 1 WLR 1241
* *Prudential Assurance Co Ltd v London Residuary Body* [1992] 2 AC 386
* *Street v Mountford* [1985] AC 809
* Law of Property Act 1925
