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Case law: Court clarifies when right to use land for very short period can create a tenancy not a mere licence

Landlords granting a right to occupy land for even short periods should ensure that the process for applying for the right, and its terms and any conditions attached, do not amount to conduct indicating the grant of a tenancy rather than a mere licence.

Legal Alert

This update was published in Legal Alert - January 2017

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

A local authority granted a licence to a fairground operator for several years, allowing her to use two pitches at a fairground for a couple of days. Each year, the council required her to send an application form defining the site and setting out which attractions would be installed there, and to pay a fee. It then issued a written authority giving her permission to use the site and setting out the conditions of use.

One year, the council’s permission covered smaller pitches than usual following allegations that the fairground operator had encroached on a neighbouring pitch. This meant she was unable to fit a new ride into the allotted space.

She claimed that she actually occupied the pitches each year under an annual periodic tenancy, rather than a mere licence. If she was a tenant it meant she could claim compensation on grounds the reduction in the size of the pitches breached her implied right to quiet enjoyment of the land. If she was a mere licensee, she could not do so.

The High Court had to consider whether both parties’ conduct showed they intended the fairground operator to have exclusive possession of the pitches during the period she occupied it each year, and for the arrangement to create an annual periodic occupancy.

The fairground operator lost her case. The Court decided that the fact the council did not reserve a right of entry or access to the site — even though it had a responsibility to exercise control over the site to ensure the safety of visitors to the site — meant that it had clearly considered the arrangement to be a licence. A licence gave it a right of access in any event (which meant no express provision was required) rather than a periodic tenancy — under which it would have had to expressly reserve that right.

However, significantly, the Court said that there was nothing in principle to stop a periodic tenancy arising in similar cases where the grantor of the rights did not have any such special responsibilities. Particularly, a tenancy could arise where an application had to be made each year, as this meant there was a new arrangement each year, any of which could amount to a periodic tenancy rather than a licence.

Operative date

  • Now

Recommendations

  • Landlords granting a right to occupy land, for however short a period, should ensure that the process for applying for the right, and its terms and any conditions attached, do not amount to conduct indicating the grant of a tenancy rather than a mere licence

Case ref: Holland v Oxford City Council [2016] EWHC 2545

Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.