For many people, letting out a property, whether a house or commercial premises, represents a good income and use of the property. However another recent case reminds us of the potential liability that people take on when they allow others to live in their property.
It is a well established principle that if a landlord lets out a property at a rent and the occupier is given 'exclusive possession', then that occupier has a tenancy of the property. This means that they have a right to stay in the property and can exclude everyone in most cases, even the landlord.
A lesser form of occupation is a 'licence'. This is an arrangement that is not deemed to be a tenancy and is merely a right that is personal to the occupier. The significance of a licence is that the landlord can gain possession of the property more easily if the occupier only has a licence rather than a tenancy. The person letting out the property is called the 'licensor' and the occupier the 'licensee'.
In a recent case, a mother owned a property which she did not live in. The property was occupied by her daughter on a licence. The daughter was described by the court as 'unreliable' and the constant barking of her dog caused a nuisance. Those affected by the nuisance sued the mother on the basis that she was an 'occupier' and could therefore be held responsible for the nuisance caused by the dog.
The Court of Appeal upheld the claim against the mother on the basis that as the licensor they were prepared to treat her as the occupier and she was liable for the nuisance caused.
The Court made it clear that the facts of the case were quite specific. This means that they do not expect a so called 'floodgate' of applications in this area. However the case is an important reminder that a person who allows someone to reside in their property potentially has an obligation to neighbouring property owners.
This is why a property owner should carefully consider whether to allow someone to occupy a property as a licensee as opposed to granting a formal tenancy. In any event the property owner should check their prospective tenants or occupiers carefully and take up references to try to ensure that the person is suitable. It is fair to say that in the case in question, the mother should have known what sort of occupier her daughter would be!
If you would like to discuss this or any other tenancy related issue, contact us.