Landlords and property guardians – where do you stand?

It might seem like the perfect solution in an overcrowded housing market - you let people live in your empty property and in return, they provide protection from squatters and vandalism until you're ready to start your renovation work at which point they leave.

In recent years, the use of 'property guardians' by landlords with large portfolios has been seen by many as a practical, cost effective way to manage and secure vacant property - everything from schools and offices to nursing homes and fire stations - and preferable to boarding buildings up or paying for security.

But a recent court case could change this and now both landlords and property guardian companies are being urged to check and review their arrangements.

How does the system work?

The landlord enters into a contractual agreement with a property guardian company which in turn is given the right to put individual 'guardians' into the property and charge them to live there.

Crucially, the property guardian industry is based on the premise that individual guardians are licencees and not tenants, important because the latter have considerably more rights and protections.

And this is where things fell apart for one company, Camelot Property Guardians, which had, in effect, created a 'tenancy by mistake'.

It ended up losing a landmark housing law ruling in Bristol, a city where it manages empty buildings with more than a hundred people living in them, in a decision which could pave the way for thousands of property guardians across the country to be legally regarded as short-hold, official, private tenants.

The case of Camelot v Greg Roynon

Bristol City Council engaged Camelot to provide guardians for a former nursing home when it closed down.

At one point, there were around 30 people living there and most moved out when Camelot asked them to about a year ago because the council wanted to demolish the building and ultimately build 12 council homes on the site.

But one occupant, Greg Roynon, challenged the eviction notice he'd been given by Camelot and a judge agreed he was right to do so, ruling he was a de facto tenant and the 'licence' he'd signed to live in the nursing home three years earlier, actually amounted to a legal tenancy.

Vital to the success of his case, was the fact Mr Roynon had been allowed exclusive access to two lockable rooms for which he had keys and which no other guardians could enter without his permission.

Implications

For landlords with guardian schemes in place: these arrangements should be reviewed to make sure they are still suitable and urgently, if the landlord has a need to sell, let or redevelop the premises in the near future to ensure the process of obtaining vacant possession is started early enough.

For property guardian companies: the case could have huge consequences for the property guardian model, which developed in the Netherlands in the 1990s and has seen steady growth since.

Property guardian companies now need to be very careful about only granting licences to individuals they place in empty properties and be aware that granting occupation of a specific space or room leaves open the risk of a finding of a tenancy

• Another hearing to take the case to the next stage is scheduled for June when the court will hear the counter-claim Roynon has served Camelot. This is based on three complaints: unlawful eviction, failure to protect his deposit in one of the deposit protection schemes and Camelot not adhering to landlord obligations of keeping a property in a reasonable state of repair.

For further help, please contact Wards Solicitors' building disputes specialist James Murray