Kay v Lambeth London Borough Council [2004]; London Borough of Islington v Green [2005]

In both of these cases, the respective local authorities issued licences over properties that they owned to housing associations, in order to provide temporary accommodation. The housing association then granted assured tenancies, mainly to homeless people. The local authority later withdrew the housing association's licence, but the tenants of the housing association claimed that this caused them to become tenants of the local authority.
The judge agreed, in both cases, that the tenants were tenants of the local authority.

HELD: The Court of Appeal held in both cases that when the local authority withdrew the licence it had granted to the housing association, this did not cause the tenants of the housing association to become tenants of the local authority. The local authority, the licensor, was not giving the licensee housing association permission to create interests (such as the tenancies) which lasted longer than the licence did.

It is important to remember that a tenant, in the same way as a licensee, cannot grant or create a licence or subtenancy binding on a landlord beyond the interest held by the tenant.