Street v Mountford [1985] UKHL 4 is a House of Lords case establishing the principles to determine whether someone who occupied a property had a tenancy (i.e. a lease), or only a licence.
Street, the respondent, granted a licence to Mountford, the appellant, to occupy two rooms at a weekly rent subject to 14 days’ notice of termination. The written agreement was titled a ‘licence agreement’ and contained a declaration that it did not create a tenancy. The respondent sought a court declaration that Mountford only had a licence. Mountford appealed to the House of Lords.
Street argued that they had only intended to create a licence, not a lease, and the fact that the agreement was labelled a ‘licence’ meant that it should be treated as such. On the other hand, Mountford argued that what was important were the rights created, not simply the form of the agreement.
The House of Lords allowed the appeal holding that the defining feature of a lease was exclusive possession of the property for a fixed or periodic term at a rent. The exclusive nature of the rights is more important than the superficial labels created under the agreement. Therefore, the only intention was the intention to confer exclusive possession, so the agreement created a lease though it was labelled as a licence.
The difference between a lease and a licence is important for the purpose of statutory tenant rights to a reasonable rent. The wider significance is that a lease gives rise to a proprietary status that can bind third parties.
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