UK: Property Guardians: Licensees Or Tenants?

Last Updated: 12 November 2018
Article by Emma Broad and Brian Kennedy

Camelot Garden Management Ltd v. Khoo is a case that considers the status of a property guardian and, more specifically, whether such guardians are genuinely licensees or alternatively whether they are tenants. The court concluded that, on the facts of the case, a property guardian was a mere licensee, a decision which will come as a relief to commercial property owners who use the services of property guardian companies.


Vacant commercial property is often at a high risk of squatters, vandals and trespassers who can cause significant damage and whose removal can be a timely and costly process. To mitigate, if not eliminate, this risk, owners of vacant commercial property sometimes enter into agreements with companies like Camelot Garden Management Ltd (Camelot) which provide a property guardianship service.

The arrangement is relatively straightforward: the property owner enters into an agreement with the likes of Camelot pursuant to which that company will arrange for individuals (the property guardians) to occupy the property as their home while it is not being put to any commercial use. The idea is that the presence of the property guardians will deter and/or prevent unauthorised parties from taking possession. For this arrangement to be successful, however, it is vital that companies such as Camelot ensure that their guardians are licensees who can be removed with the minimum of fuss on short notice.

This case concerned an office building in London that was vacant pending redevelopment. The owner entered into a property guardianship arrangement with Camelot and, in turn, Camelot entered into an arrangement with Mr Khoo for him to occupy as a property guardian. In August 2017 the owner of the property requested vacant possession from Camelot. In September 2017, Camelot served notice on Mr Khoo terminating his occupation. Mr Khoo refused to go. He claimed he had exclusive possession of one room and two storerooms in the property making him a tenant and rendering the termination notice ineffective.

The key issue was whether or not Mr Khoo was a tenant or a licensee. The defining feature of a tenancy is that the occupier has been granted exclusive possession.

At first instance the judge held that, while Mr Khoo did have exclusive possession, the arrangement was in fact a licence. Mr Khoo appealed.

The decision

The High Court's approach to the issue was as follows:

  • the starting point is to consider whether the relevant agreement confers a right to exclusive possession;
  • in the process of construing the agreement, the court will consider the words used in the agreement in its context by reference to its subject-matter and in light of other relevant circumstances known, or which may be presumed to be known, to both parties at the time of conclusion of the agreement, other than prior negotiations as to the terms of the agreement;
  • in the process of construction, there is no requirement that, before considering the background and context in which the agreement was entered into, there should be a finding of any ambiguity used in the words of the agreement;
  • the court should also consider whether the agreement is a sham and, for that purpose only, the court may have regard to both matters predating the conclusion of the agreement and also how the arrangements were operated in practice afterwards. A sham arrangement ordinarily involves a finding of dishonesty.

In this case the court considered the terms of the agreement with Mr Khoo. That agreement explicitly stated that Camelot was not granting exclusive possession. There were multiple guardians at the property and the language of the agreement required the guardians to agree amongst themselves how the space was to be used. The court considered that the agreement created one unitary right in respect of the whole of the property, rather than a right to exclusive possession of a particular room plus a separate but distinct right over the rest of the living space. The court concluded that any rights of possession in respect of the property as a whole were "plainly not exclusive" given the occupation of the other guardians.

When considering the background circumstances to the grant of the agreement, the court emphasised the nature of the property guardianship scheme with Mr Justice Butcher commenting "the operation of the scheme, its commercial purpose and indeed the continued existence of such scheme depends upon the terms of the contract meaning what they say and not creating a tenancy. Given that the commercial purpose of the transaction would be undermined if the terms of the agreement were given a strained or artificial meaning, then that supports the construction of those terms which accords with their natural meaning". In contrast, the court did not feel that the way in which the letting took place, with Mr Khoo being shown a particular room to occupy, provided any basis for construing that the agreement granted him exclusive possession.

The court also considered how the scheme had been operated after the agreement had been entered into. While it did not appear that the guardians had exercised the right to decide from time to time where each would be sleeping, the fact that the right had not been exercised did not mean that Camelot did not intend to honour that term. There was no air of "total unreality" about taking the agreement to mean what it said and there was no finding of any dishonesty to justify any conclusion that the agreement was a sham.

Accordingly, the High Court held that Mr Khoo did not have exclusive possession and was therefore a mere licensee.


This decision is interesting given the amount of weight that appears to have been placed not just on the textual construction of the agreement, but on the contextual construction of its terms and the intentions behind the property guardianship scheme – it is certainly an example of the court taking a highly purposive approach to contractual interpretation. Ordinarily the emphasis is on the substance of arrangements and how they are operated in practice. This decision should be contrasted with the non-binding decision in the Bristol County Court 2017 decision in Camelot Property Management Limited (1) and Camelot Guardian Management Limited (2) v. Greg Roynon (see our previous update) in which a property guardian was found to be a tenant largely on the basis of the conduct of the parties post agreement.

Here, the fact that there were multiple guardians at the property was a factor which the court took into account when concluding that the arrangement did not constitute exclusive possession. One unknown factor is whether the court would reach a similar finding on equivalent facts but where there is (in practice and as provided for in the document) a single property guardian.

Whilst the decision in Camelot Garden Management Ltd v. Khoo will be of comfort to commercial property owners using property guardians, the case did ultimately turn on its "factual matrix". Owners should continue to take sensible steps to mitigate any risks associated with these arrangements. For example, owners should ensure that agreements with companies sourcing property guardians contain appropriate indemnity provisions and do not exclude or restrict liability in a manner which is not commensurate with the loss that might be suffered if a property guardian were to be found to be a tenant rather than a mere licensee.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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