Almshouse occupants: tenants or beneficiaries?
Just before Christmas the Court of Appeal handed down judgment which provides clarification on the status of almshouse occupants. Almshouses provide accommodation for the elderly and/or poor and are almost always operated by almshouse charities. The case of Watts v Stewart & Others considered whether the occupant of an almshouse was a licensee or a tenant. If a tenant, it would be more challenging for an almshouse charity to recover possession.
Ms Watts’s occupation had many of the hallmarks of a tenancy. She enjoyed exclusive occupation, paid money for that occupation (which was described in a written agreement as rent) and the written agreement under which she occupied referred to itself as a tenancy. However, the County Court and the Court of Appeal both confirmed she was not a tenant but a licensee. The Court of Appeal dealt with the reference to a tenancy and rent swiftly. The trustees were lay people and as such should not be criticised for using these terms without appreciating their precise legal meaning. No weight was therefore placed on the use of these terms in determining her status.
As to exclusive occupation, the Court of Appeal drew a distinction between a legal right to exclusive possession, meaning the legal right to exclude any third party from the property including the owners, and a personal right to enjoy exclusive occupation while the personal permission continued. The former would be a hallmark of a tenancy. However, the latter would necessarily be, and it was the latter which Ms Watts enjoyed. The way in which almshouses work is that a person given shelter becomes a beneficiary under the trusts of the charity. As a beneficiary, that person enjoys the privilege of exclusive occupation for so long as the charity allows. The charity sets down the terms on which that occupation is enjoyed and if those terms are not met (for example the occupant ceases to be of need), then the permission will cease. It would be contrary to the charitable objects of an almshouse charity if the occupation provided to beneficiaries ran beyond the point at which those conditions ceased. Therefore, the Court of Appeal concluded an almshouse charity could not give to a beneficiary a legal right to exclusive possession and therefore could not grant a tenancy. That position should be contrasted with that of a registered social landlord. While such entities may have charitable status, their objects include the grant of tenancies and so the findings of the court in this case should not be seen as being of application to RSLs but it does provide reassurance to those involved in the provision of almshouse accommodation.
The decision in Watts followed a previous Court of Appeal decision concerning the rights of occupants of almshouses. That earlier decision pre-dated the coming into force of the Human Rights Act and the incorporation of the ECHR into our law. The Court of Appeal confirmed that the ECHR made no difference to their decision on status. Convention rights were not infringed by her classification as a licensee.