Court of Appeal confirms Almhouse residents are licencees, not tenants

On 15 December 2016, the Court of Appeal handed down its judgment in the case of Watts v Stewart and Others (2016).  In a decision that will be welcomed by almhouse charities, the Court confirmed that almhouse residents occupy almhouse properties as licencees and not as tenants.

The Background to the Dispute

In Watts v Stewart, the principal object of the Almhouse Charity in question was the provision of accommodation for its beneficiaries within its 14 residential flats which were split across 3 properties.

In October 2004, Mrs Watts was notified that she had been allocated a property by the Charity by way of a Letter of Appointment. The Letter of Appointment confirmed that she had been appointed as a beneficiary of the Charity and also set out the Charity's regulations which were stated to be in place "to ensure the smooth running of the almhouses".  

Whilst the Letter of Appointment clearly referred to Mrs Watts as a beneficiary of the Charity, the Letter also referred to "rent" and a "tenancy", whilst the signature provision of the Letter of Appointment, which was signed by Mrs Watts, contained the wording "I understand the terms of Appointment explained in this letter and agree to abide by the Conditions of Tenancy". 

In August 2014 the Charity's Trustees served notice to quit on Mrs Watts on the grounds that she was in breach of the terms of the Letter of Appointment, citing in particular anti-social behaviour. The Charity subsequently issued county court proceedings against Mrs Watts and was successful in obtaining a possession order. Mrs Watts appealed, arguing, amongst other points, breach of human rights and that she was a periodic tenant.

The Court of Appeal's Decision

Acknowledging that the Letter of Appointment contained language which could give the impression that there was a tenancy, the Court of Appeal highlighted that it was well established law that whether an occupier was a licensee or a tenant was not determined by the labels or language used by the Parties, but upon the intention of the Parties having regard to all the admissible evidence.

In this instance, the references to a "tenancy" and "rent" in the Letter of Appointment were due to the Trustees being volunteers without an appreciation of the meaning of the language used, the balance of the Letter of Appointment, in the Court's view, "quite plainly" recording that there was no intention to grant a tenancy to Mrs Watts.

Dismissing Mrs Watts' assertion that she was a periodic tenant, the Court of Appeal held that Mrs Watts did not have exclusive possession of the property she occupied. She was, therefore, a licensee, holding a personal licence to occupy an almshouse property which was governed by the Terms of the Letter of Appointment.

That the Trustees were not empowered to grant tenancies and that the object of the Charity  - to provide housing to those most in need - could not have been properly fulfilled had residents of the Charity been tenants, were also relevant factors that influenced the Court's decision.

A final thought

As mentioned above, the Letter of Appointment signed by Mrs Watts identified her as a beneficiary of the Charity but also contained terminology that could evidence the existence of a tenancy suggested. In my experience, such contradictory language is not uncommon in almhouse documentation and only serves to create confusion. It is also not uncommon for almhouses charities to have minimal documentation in place, casting doubt on what the intentions of the parties were and increasing the risk that an occupant could be found to be a tenant.

Whilst the Court of Appeal has reiterated in Wattsv Stewart that it is intentions of the parties that is key when determining the status of an occupant of a property,  Almhouse Charities should nonetheless undertake a regular review of all documentation provided to prospective and current beneficiaries so as to ensure that the language contained within their Letters of Appointment and Rules & Regulations are consistent with the notion that residents are licencees, not tenants.

If you have any queries arising from this article, would like to suggest a topic for a future article or wish to discuss a contentious property issue, contact Chris Drinkall, Head of Rollits' Property Dispute Resolution Team on 01482 337367 or christopher.drinkall@rollits.com

Posted on: 30/12/2016

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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