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Licence to occupy or tenancy?

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Summary: Licences to occupy are a popular tool in asset management. When used correctly they can be useful. But there is always the risk that what you create is a tenancy not a licence, in which case other issues arise (occupiers acquiring 1954 Act rights, for example).

Facts

Oxford City Council runs the St Giles fair over two days every September. 

One occupier was Mrs Holland, a member of the Showmen’s Guild (a trade association for the travelling fairground community).  A dispute arose between the Council and Mrs Holland over the lot sizes she occupied.  That, and difficulties with a neighbouring lot, eventually led to her claiming an annual periodic tenancy of the lots she occupied for a few days each year for the fair.

The Council made Mrs Holland and others follow an application process each year (which the court found meant a new contract arose discharging the previous year’s).

The licences then issued each year by the Council referred to Conditions of Letting (which varied over time).  These did not reserve a right of entry to the Council (a typical feature of a tenancy).  They also contained a number of other matters suggestive of a relatively high level of control by the Council over the lots, implicit in which was the Council’s right to come on site at will.  That lack of exclusive possession by Mrs Holland outweighed, on balance, language more suggestive of a tenancy.

So Mrs Holland’s claim was unsuccessful.

Conclusion

In this kind of case, what is relevant are the terms of any agreement, not the labels the parties give it. 

The facts here may be unusual but the decision serves as a reminder that there are risks in using a licence to occupy.  Even if, as here, to occupy an area only for a few days a year since that can potentially give rise to an annual periodic tenancy.

Case: Holland v Oxford City Council [2016] EWHC 2545 (Ch)

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