AG Securities v Vaughan

Facts

AG Securities possessed a long lease of a four bedroom property which was rented to Vaughan and three other individuals. Each tenant signed individual agreements on four separate occasions to lease the property. AG Securities later terminated all of the agreements in 1985. The tenants claimed that they had joint ownership of the lease of the property and were therefore afforded statutory protection. The landlord claimed that the tenants had separate licence agreements. The Court of Appeal heard the case and decided that the tenants held a joint lease. This decision was appealed.

Issue

The issue was whether these individuals could rely on a collective lease to the property which would afford them protection under the relevant landlord/tenant legislation, which at the time was the Rent Act 1977. It was important for the court to consider the nature of the agreements that were struck between the landlord and the licensees.

Held

It was held by the House of Lords that Vaughan and the other people in the property were licensees and could not, therefore, rely on the rights within the Rent Act 1977. The court arrived at this decision on the basis that none of the licensees were provided with exclusive possession, but merely had the right to share the flat with one another and therefore this prevented their rights from being combined. Moreover, when considering the construction of the agreements, it was clear that the rights had been created as numerous, distinct agreements and could not be construed as the licensees possessing joint tenancy.

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