Q&As

A registered charity operates a care home and wishes to grant a service ‘occupancy’ at a reduced rent level (less than half of the market rate) dependent on the employee's employment as Resident Warden/General Maintenance Person at the care home. The property may also be occupied by the employee's wife and daughter. The employee would have exclusive occupation. Would this be a service occupancy or a tenancy?

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Published on LexisPSL on 29/10/2020

The following Property Disputes Q&A provides comprehensive and up to date legal information covering:

  • A registered charity operates a care home and wishes to grant a service ‘occupancy’ at a reduced rent level (less than half of the market rate) dependent on the employee's employment as Resident Warden/General Maintenance Person at the care home. The property may also be occupied by the employee's wife and daughter. The employee would have exclusive occupation. Would this be a service occupancy or a tenancy?

A registered charity operates a care home and wishes to grant a service ‘occupancy’ at a reduced rent level (less than half of the market rate) dependent on the employee's employment as Resident Warden/General Maintenance Person at the care home. The property may also be occupied by the employee's wife and daughter. The employee would have exclusive occupation. Would this be a service occupancy or a tenancy?

In Street v Mountford, Lord Templeman observed that: 'There can be no tenancy unless the occupier enjoys exclusive possession; but an occupier who enjoys exclusive possession is not necessarily a tenant’. He then went on to identify several categories of person who cannot be a ‘tenant’, including a ‘service occupier’ (or ‘service occupant’). A service occupier is an employee who occupies their employer's premises in order to perform their duties as an employee. In those circumstances, the possession and occupation of the employee is treated as the possession and occupation of the employer and the relationship of landlord and tenant is not created (see Mayhew v Suttle (1854) 4 EI & BI 347 (not reported by LexisNexis®). A service occupier is therefore a type of licensee.

The legal test as to what is a service occupancy was most recently considered by the Court of Appeal in Norris v Checkfield. There, Lord Woolf accepted that ‘…an employee will be a licensee,

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