Difference between lease and a licence

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Normally if a person occupying another's land does not have exclusive possession she is not a tenant but only a lodger, or a licensee. Thus if Joyce does not have exclusive possession of first floor apartment of the house, she will be considered a licensee.

In determining the legal status of the occupation agreement between Raj and Joyce the decision of the House of Lords in the case Street v. Mountford will provide some assistance. Lord Templeman stated that the normal test of a tenancy is the factual question of 'exclusive possession' ; the intention of the parties is irrelevant. Thus if Joyce can established that she has been granted exclusive possession by Raj the court shall hold the “Occupation Agreement” to be a lease  irrelevant of Raj’s clear intention to create a Licensee.

In A. G. Securities v. Vaughan, Antoniades v. Villiers the House of Lords held, in the first of this pair of cases heard together, that a group of four people who shared a flat could not be tenants because they did not fulfill the requirements of a 'joint tenancy', the only way by which people can legally share land (see Chapter 12). They did not all arrive at the same time, and so they did not share 'unity of title': they were merely licensees. In the second case, however, a 'License Agreement' which seemed to give the owner the right to sleep in the tiny flat with a cohabiting couple was held to be a tenancy; the term looked as if it denied exclusive possession to the couple but it was a sham, inserted in the agreement merely in order to avoid giving Rent Act protection to the occupants, and it had no effect.

However in Westminster City Council v. Clarke [1992] Lord Templeman held that were  there was no exclusive possession here because of the purpose of this agreement: a term that the occupant could be moved at any time to another room was not a sham because the council needed it in order to fulfill its statutory duty to vulnerable people.

In Bruton v. London and Quadrant Housing Trust despite the very clear wording of the license agreement, the House of Lords found that Mr. Bruton had exclusive possession of his flat, was thus a tenant and not a licensee. Thus despite the wording of the “Occupation Agreement”  The Joyce may be considered a tenant and relay on s.ll Landlord and Tenant Act 1985 for breach of the implied repairing obligations, which Raj may well owe  to Joyce which Raj may have been able to avoid if the “Occupation Agreement” is considered a Lease.

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Lord Hoffmann stated:

The only rights which it reserved were for itself and the council to enter at certain times and for limited purposes.’

In Street v. Mountford, it was held that  such an express reservation 'only serves to emphasis the fact that the grantee is entitled to exclusive possession and is a tenant. Thus just because the “Occupation Agreement” states that Joyce must “ shall vacate the apartment, each and every Sunday morning between the hours of 9 am and 11 am” this does not necessary mean that the legal status  of the ...

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