Court of Appeal confirms legal status of residents of almshouses as licensees not tenants

The Court of Appeal has confirmed that residents of almshouses occupy as licensees only and not as tenants with security of tenure.

In a decision (Watts v Stewart and others [2016] EWCA Civ 1247) which will surely be a relief to almshouse charities, the Court of Appeal has confirmed that residents of almshouses occupy as licensees only and not as tenants with security of tenure.

There are approximately 35,000 residents of almshouses in the UK and it would clearly be difficult for almshouse charities to fulfil their charitable objectives if residents were construed as tenants with full rights of protection from eviction.

Mrs Watts was a resident of an almshouse provided by the Ashtead United Charity (the charity).

The charity’s main object was the provision of accommodation for its beneficiaries in its 14 residential flats.

Mrs Watts signed a letter of appointment which described her as a ‘beneficiary’ of the charity but the letter also included various terms which were referred to as the ‘Conditions of Tenancy’. 

In 2014 the charity trustees served notice to quit on Mrs Watts citing anti-social behaviour in breach of the letter of appointment terms and they then sought an order for possession.

Mrs Watts claimed that her lack of protection against eviction when compared to a tenant in social housing constituted an unlawful interference with her human rights.

The County Court held that Mrs Watts was an appointee and therefore had a licence to occupy the flat as a beneficiary of the charity; she did not have a lease.

Mrs Watts appealed that decision on the basis that she was a periodic tenant. She further claimed that occupiers of almshouses were entitled to security of tenure by virtue of Articles 8 and 14 of the European Convention on Human Rights (protection from discrimination and the right to private life, family and home).

The Court of Appeal upheld the County Court’s decision and, in a move which shows the potential significance of this case for almshouse charities, the Charity Commission and the National Association of Almshouses were permitted to intervene in the appeal. The Court of Appeal held (amongst other things) that Mrs Watts was not a tenant because she was not entitled to exclusive possession of the flat; she only held a personal licence on the terms of the letter of appointment.

The court referred to the leading case on the lease/license distinction: Street v Mountford and reiterated that whether or not a person’s occupation is a tenancy or a licence is not determined by the label applied to it by the parties but instead by the intentions of the parties. In this case the charity trustees could only properly fulfil the objects of the charity by granting a personal licence which could be revoked once the person ceased to fulfil the criteria for need (for example if a resident suddenly became wealthy and no longer in need).

For further advice on charity property issues please contact Louisa Saunders or another member of our specialist Charities Team.