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Beach hut owners ruled as tenants by High Court

In the recent case of Gilpin v Legg [2017], the High Court had to consider whether the owners of beach huts who had sited their huts on plots of land in Dorset were occupying the land as licensees or as tenants.

In this case, three legal issues were considered: (1) Were the agreements between the landowner and occupiers licenses to use the land or tenancies? (2) If deemed to be tenancies, what kind of tenancy would it be? (3) Were the huts part of the land, or were they only objects (chattels) owned by the occupiers?

On the first question, it was held that the agreements between the landowner and occupiers were tenancies because they fulfilled the long-established elements of a tenancy, being the grant of exclusive possession of land for a term at a rent. Whether or not the huts were chattels (as discussed below) was irrelevant because the huts occupied the same extent of land for the entire time that they were in use. This occupation prevented the occupier from being able to use or occupy that land. Where a landowner grants a right to site a hut or chalet of this kind, moveable in practice on termination of the right to site only, the landowner is, in effect, granting a right to exclusive possession.

Although there were no formal written tenancies in place, the judge held that it was clear, on the basis of evidence of annual rent paid by the occupiers to the landowner, that the right to site the huts on the land was originally granted to each occupier on a year-by-year basis. The occupiers, therefore, enjoyed annual periodic tenancies, which could only be terminated by serving six months’ notice to quit.

In determining the third question, the judge had to consider whether the claimants would be obliged, at their own cost, to remove the huts at the end of their tenancy. Deciding upon whether the item is a fixture (and therefore part of the land) or a chattel merely placed on the land is decided on a variety of issues, including the extent to which the item has been affixed to the land. The judge was clear that the huts were merely chattels because they were largely insecure and temporary structures capable of being easily moved without risk of substantial damage. Had the huts been securely fixed to the land in order to increase the quality or value of the land, this creates a degree of permanence and would be more likely to be classed as a fixture.

This case should act as a reminder to landowners that any type of real estate can result in legal disputes between landowners and occupiers and that it is important to consider the nature of the agreement between the parties at the outset to try to avoid any future disagreements.

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To find out more about this story, please contact Lauren Pearson in Lodders’ Real Estate team on 01789 206126 or via email.