Street v Mountford (1985)

Case Summary:

Title: Street v Mountford [1985]

This case concerns the distinction between a lease and a licence and the Rent Act 1977

FACTS:  On March 7 1983, Mrs Mountford entered into an agreement described as a licence by which Mr Street granted her the right to occupy two furnished rooms in a house at Nos 5 & 6, St. Clements Gardens, Boscombe for £37 a week, subject to clause 10, 'This licence may be terminated by 14 days written notice ...'

t was conceded by Mr Street that exclusive possession of the two rooms had been granted to the tenant. (key issue)

The agreement contained ten 'rules' which were to be observed by Mrs Mountford.  No one apart from her was to sleep in the rooms.  The landlord, Mr Street, was entitled to enter the rooms to inspect their condition, to empty meters, to carry out repairs etc. Mr Street provided neither attendance nor services and only reserved the limited rights of inspection.  Mrs Mountford proceeded to register a fair rent and Mr Street applied to the County Court for a declaration that the occupancy was a licence.The Court at first instance declared she was a tenant, however, the Court of Appeal held she was a licensee.  Appeal referred to House of Lords.

HELD:  The House of Lords reversed the decision of Court of Appeal.  The House of Lords held that the agreement created a tenancy; the occupier was held to be a tenant and not a licencee as named on the lease. In the absence of special circumstances, if it is agreed that an occupant should have exclusive possession for a fixed or periodic term in return for paying rent, a tenancy is created, irrespective of how the arrangement is described by the parties.  The fact that the parties described the agreement as a 'licence' cannot turn a tenancy into a licence.

In future, courts should look to the tenancy, and its three requirements (not so much to the paper): 

- exclusive possession
- payment in the nature of a rent
- term

Case Citation: Street v Mountford [1985] AC 809