Street v Mountford [1985] AC 809

Mr Street granted Mrs Mountford occupation of two rooms under a written document headed as a licence agreement. It provided for payment and termination on notice and included a statement that the arrangement was not intended to create a tenancy protected by the Rent Acts. Mrs Mountford and her husband nevertheless had exclusive possession of the rooms, and the arrangement did not involve attendance or services requiring the owner to retain possession. A dispute arose about whether the written label or the substantive rights determined her status. The House of Lords considered the case after differing decisions below.

Did the agreement create a tenancy because of the rights actually granted, despite its licence label and the occupier’s signed statement disclaiming tenancy protection?

The House of Lords held that Mrs Mountford was a tenant. Lord Templeman explained that the court must identify the rights conferred by the agreement on its true construction. A grant of exclusive possession for a term at a rent ordinarily created a tenancy in this setting, and the parties could not change that legal consequence by calling it a licence. Genuine arrangements such as lodging, where services require the owner to retain access and control, remain distinguishable. The court also recognised that some occupations arise in circumstances inconsistent with a tenancy. It therefore examined the substance of the transaction rather than treating every permission to occupy as a lease.

The legal character of occupation depends on the rights granted, not merely the label chosen. Exclusive possession for a term is central to a tenancy, subject to genuine exceptions and the surrounding legal relationship; calling the document a licence does not determine the outcome.

Street is the leading starting point for the lease/licence distinction and attempts to avoid statutory tenancy protection through drafting. Exclusive possession differs from merely being the only person present: it concerns the right to control occupation. Later cases, including Ashburn Anstalt v Arnold, explain that rent is not indispensable to every tenancy. A complete problem answer should also address term certainty, formalities and the relevant statutory scheme rather than relying on the document’s heading.