This page is targeted at housing professionals. Our main site is at www.shelter.org.uk

Property guardians

This content applies to England

Information on property guardians and guardian agencies.

Property guardianship is a relatively new feature of the housing market in which vacant residential or commercial premises are let to individuals (ie the 'property guardians') at a below market rent.

The occupation agreements which the property guardians enter into, however, often contain terms that may be unenforceable when considered under principles of housing, landlord and tenant, and consumer law.

Guardians and guardians' agreements

A property guardian lives in vacant commercial/industrial or residential accommodation under an occupation agreement, often labelled as 'licence for non-exclusive shared occupation of premises', granted by an agency (ie the guardian agency) for a below market rent.

The agreement typically requires the property guardian to pay any or all of the following:

  • a periodical 'licence fee' (usually weekly)
  • a periodical gas/electricity/water 'utility fee' (usually weekly)
  • a 'damage security payment'
  • an 'administration fee'
  • a 'safety pack' fee
  • an amount towards council tax.

Who is the landlord?

The property owner grants a licence to the guardian agency, which contains permission to grant a sub-licence to the property guardian.

There is no relationship between the owner of the property and the guardian. The agency is the guardian's landlord and keeps the rent, plus all other sums paid by the guardian for her/his right to live in the property.

Security of tenure

It has long been established that the 'label' on an occupation agreement does not decide the real status of the occupiers.[1] As such, it is necessary to look at the agreement itself, whether or not it is termed a 'licence for non-exclusive shared occupation of premises', together with the practical arrangements surrounding the property guardian's occupation of the property.

The main indicators of a tenancy are that the occupier has exclusive possession of the premises for a term at a rent, and there is an intention to enter into legal relations. Exclusive possession is the right of the occupier to exclude all persons, including the landlord, from the premises. The term 'premises' does not mean the whole property/building but can refer to a single room within it. The fact that the landlord has reserved the right to enter in given circumstances, for example to carry out inspections, does not deprive the occupier of exclusive possession.

Although many property guardianship arrangements will be genuine licences[2], it is arguable that some will create a tenancy. This will be the case especially if, in practice, the guardian lives in the premises alone (ie s/he has exclusive occupation of any part or room in the property) for a considerable period of time (ie not just for a few nights) as in such cases it will be strongly arguable that s/he is occupying the premises as a 'dwelling'.

Each arrangement will have to be judged on its own facts. For example, in a non-binding case, the county court found that the guardian had exclusive possession of the premises and was therefore an assured shorthold tenant, rather than a licensee, where:[3]

  • the guardian was, at the start of the agreement, offered the choice of a room in the property by the property agency, without any involvement of the other guardians living in the property
  • he was given the key to that room, and the other guardians in the property did not have access to it
  • he had remained in occupation of the same premises for over three years, and he had never been asked to move to alternative rooms.

See What is a tenancy? and What is a licence? for information on the distinction between a tenancy and a licence.

Eviction and notice periods

Usually, a property guardian's agreement will provide that the agency can require the guardian to vacate the property at very short notice, usually two weeks, and without a court order. However, it is strongly arguable that such notice is invalid.

A property guardian occupies the premises as her/his home so s/he would qualify as a 'residential occupier' for the purposes of the Protection from Eviction Act 1977, particularly when s/he occupies residential premises. If the property guardian occupies commercial or industrial premises, the landlord/guardian agency may try to argue that the guardian is not a 'residential occupier' because the planning use of the premises will be for business purposes and not for residential occupation.

However, it has been held that the 1977 Act applies when premises are let for mixed residential and business purposes. See Protection from eviction Act 1977 for more on the Act.[4]

A residential occupier is defined as a person who occupies premises as a residence.[5] As such, regardless of whether the property guardian is a licensee or a tenant, s/he might be entitled to a minimum of four weeks' notice to quit and have the right to remain until the guardian agency obtains a court order. The only exception would be if the property guardian was an excluded occupier, which would be unlikely. See  Who is an excluded occupier for more on this.

When the occupation agreement is, in effect, an assured shorthold tenancy all the requirements for termination of such tenancies will apply. See Ending an assured shorthold tenancy for more on this.

Housing standards

If the landlord/guardian agency lets premises which contain a hazard under the Housing Health and Safety Rating System (HHSRS), it may be required by the local authority to remedy the defect.

See Housing Health and Safety Rating System for more on this.

HMO licencing requirements

If the property guardian's occupation of the property is shared with at other occupiers, who are not husbands, wives, partners or relatives, the property might be subject to mandatory or selective licensing requirements for houses in multiple occupation (HMOs).

For more information, see Houses in multiple occupation and Selective licensing.

Consumer protection

Arguably, property guardians are consumers dealing with a business, as such consumer protection legislation will apply to their dealings with the guardian agency.

Under consumer law, guardian agencies should use an appropriate set of standard terms and other contractual documentation in their dealings with property guardians. A failure to do so could result in unfair contractual terms being unenforceable and not binding on the property guardian.

Unfair Contract Terms Act 1977

The Unfair Contract Terms Act 1977 applies to agreements between a consumer and a business, especially when the business uses written standard agreements where the consumer does not negotiate individual terms. The main relevant provision prevents a business from relying on a term which unreasonably either:[6]

  • excludes or restricts its liability for breach of contract
  • provides substantially different performance to that reasonably expected, or
  • provides no performance at all.

The reasonableness of a term is to be assessed by reference to the circumstances and knowledge of the parties when the agreement was made.[7]

Consumer Rights Act 2015

With effect from 1 October 2015, the Consumer Rights Act 2015 repealed and replaced the Unfair Terms in Consumer Contracts Regulations 1999 SI 1999/2083.

Chapter 4 of Part 1 of the Consumer Rights Act 2015 applies to consumer contracts for the provisions of services - that is contracts where a trader/business supplies a service to a consumer. Part 2 of the Act contains rules about unfair terms, and Schedule 2 to the Act contains an indicative and non-exhaustive list of terms which may be unfair. Many could be relevant to guardians' agreement, for example

  • requiring a property guardian who fails to fulfil his obligation to pay rent on a certain date to pay a disproportionately high sum in compensation
  • enabling the guardian agency to terminate a property guardian's periodical occupation agreement without reasonable notice
  • enabling the property agency to alter the terms of the guardian's occupation agreement unilaterally, without a valid reason specified in the agreement.

It is for the courts to determine if a term is unfair.

Guidance on unfair terms

Guidance on unfair contract terms analyses how to apply the test of fairness and why some standard contract terms may be considered unfair.

See also Unfair terms and implied conditions in the section Assured shorthold tenancies for more on unfair contract terms.

[1] Street v Mountford (1984) 16 HLR 27; Bruton v London & Quadrant Housing Trust (1999) 31 HLR 902.

[2] Camelot Guardian Management Ltd v Khoo [2018] EWHC 2296 (QB).

[3] (1) Camelot Property Management Ltd (2) Camelot Guardian Management Ltd v Greg Roynon, Bristol County Court, 24 February 2017 (as reported on Nearly Legal on 25/2/2017).

[4] Patel v Pirabakaran [2006] EWCA Civ 685.

[5] s.1 Protection from Eviction Act 1977.

[6] s.3 Unfair Contract Terms Act 1977.

[7] s.11 Unfair Contract Terms Act 1977.

Back to top