The death throes of short-life

The story of short-life tenancies in Lambeth and other London boroughs may have reached its denouement with a Court of Appeal decision handed down on 20 July.

You may recall the House of Lords case London & Quadrant v Bruton (2000) in which Gary Bruton successfully claimed to be a tenant of London & Quadrant Housing Trust despite the fact that he held a short-life licence agreement and L&Q only held a head licence (an overriding one from which sub licences are given) from Lambeth council.

In that case, the House of Lords, while finding that Bruton was a tenant of L&Q’s, reserved judgment on the question of Lambeth’s right as freeholder to obtain possession. That issue has now been resolved in Lambeth LBC v Kay & Others – subject, of course, to an appeal to the House of Lords if permission is given.

The latest chapter of the short-life story begins after the decision in Bruton, when Lambeth took steps to terminate L&Q’s licence of the short-life properties it held in the borough. The council argued that termination of L&Q’s interest automatically terminated the occupants’ interests in the properties, thereby giving Lambeth a direct right to possession – the Lords had intimated as much in Bruton.

After the notice to terminate served on L&Q expired, Lambeth began possession proceedings against the occupants, making offers of alternative accommodation to all.

Some 60 of them defended against the proceedings on these main grounds:

• that L&Q was not a licensee but an agent of the council and had been managing the short-life properties on its behalf. This would make Lambeth the occupants’ landlord and they would have been secure tenants with the right to buy – a strange concept, seeing as the point of short-life tenancies was to make available, on a temporary basis, local authority homes that were due for demolition or redevelopment
• that the licence between Lambeth and L&Q was a sham, disguising the real relationship between them and the occupants. The true relationship, it was argued, was one of landlord and tenants
• that termination of L&Q’s interest by Lambeth had the effect of making the occupants tenants of Lambeth in a manner akin to the statutory rights of assured sub-tenants and Rent Act sub-tenants where the head tenancy is terminated
• that the termination of the licence agreement between Lambeth and L&Q and its replacement with a head lease arrangement in 1995 had the effect of making the occupants tenants of Lambeth at the point of termination and re-grant.

Human rights

The court said a defence using the Human Rights Act’s right to peaceful enjoyment was ‘ingenious but flawed’

Judge Cooke found in favour of Lambeth at Central London County Court on 13 December 2002; the occupants appealed. They invoked the Human Rights Act, claiming that even if Lambeth and Judge Cooke were right, to allow the council to take possession would be in breach of article 8 – the right to respect for private, family and home life – and article 1 of the First Protocol, the right to peaceful enjoyment of possessions.

The Court of Appeal refused to interfere with the findings of fact made by Judge Cooke in relation to the agency argument. He had found that the relationship between Lambeth and L&Q was one of licenser and licensee, so the occupants were tenants of L&Q.

On the termination point, the Court of Appeal upheld Judge Cooke’s decision that the short-life residents’ rights to occupy would end automatically on termination of L&Q’s interest by Lambeth. The court did not accept that Lambeth and L&Q should be treated as landlords for the purposes of the 1985 Housing Act, giving the occupants secure tenancies, or that the occupants became secure tenants of Lambeth when the original head licence was replaced.

On surrender of the licence by L&Q to Lambeth, the Court of Appeal said, the occupants would not gain any estate in land binding on Lambeth and, insofar as they had continuing rights of occupation, those rights continued as against L&Q under the new head lease.

Finally, on the human rights issues, the Court of Appeal concluded that the occupants’ case under article 8 was unsustainable and their argument under article 1 of the First Protocol was “ingenious” but “fundamentally flawed”. The article does not confer any right of property that is not already in existence.

Since the occupants’ tenancies, albeit constituting “possessions”, were not binding on Lambeth in domestic law, they could not be made binding by the application of article 1. To do so would create substantive rights, which was not the intention of article 1.

It’s been a very complex case but one that will remain of considerable interest as councils continue to seek hand-back of their remaining short-life properties. The use of short-life properties to house occupants over a period of decades was always bound to lead to conflict when those properties were required back: some short-life occupants have been in those properties for the bulk of their adult lives – but, one also has to recognise, at vastly subsidised rents.