Gilpin v Legg  EWHC 3220 (Ch)
In a case highlighting the benefit of clearly documenting arrangements between owners and users of land, the High Court has determined the basis on which five beach huts were used and occupied by their owners (the claimants).
The defendant land owner initially alleged that the claimants occupied his land as licensees and served notice in December 2014 to that effect. The claimants disputed the validity of that notice.
There was very limited documentation and in recent years the land owner had sought to use language more commonly associated with licences than leases in his communications with the claimants. The court looked past the land owner's attempt to dress the arrangement up as a licence, however, and held that the claimants occupied on a periodic tenancy from year to year.
Ultimately, the court was guided by the fact that:
- whilst ultimately not important when considering the question itself and notwithstanding the finding that the beach huts were chattels (meaning that they did not belong to the landowner and the claimants were entitled to remove them), the claimants were, for all practical purposes, in exclusive occupation of the land on which the beach huts were located; and
- the rent was payable, and paid, per annum.
Fortunately for the land owner, however, a second notice had been served, without prejudice to the validity of the first notice, shortly after proceedings were commenced (in September 2015) to terminate any periodic tenancy that the claimants may have in March 2016. The court held this notice to be valid, terminating the claimants right to occupy on the date specified within it.
- Whilst it may seem easier and/or cheaper at the time, allowing third parties access to premises without clearly documenting the basis on which they do so beforehand will only expose you to trouble in the future. This is particularly relevant when future tenants are allowed into premises prior to lease completion.
- The court will not be guided by the language used by the parties and will look to understand what the true nature of their relationship is (landlord/tenant or licensor/licensee).
- If you want to grant a licence, rather than a lease, you should consider taking practical, real world steps to show that the occupiers do not have exclusive possession of the land they occupy (by requiring them intermittently to move location).
- When there is ambiguity as to the basis on which occupiers occupy land, consider protecting your position by serving more than one notice (without prejudice to any other notices served) to terminate any likely interests they may have.