Allowing people to occupy your property on the basis of a handshake is an invitation to misunderstandings and costly dispute. The point was proved by a case in which the trustee of an agricultural estate found himself in court after he informally permitted a family to live in a farmhouse at a low rent for 25 years.

The trustee orally agreed with the family that they could occupy the farmhouse for a rent of £155 per month – which never increased – on the basis that they would repair and maintain the property. When he sought possession of the property decades later, a son of the family who had started to live there when he was a teenager argued that it would be unconscionable to evict him.

In asserting a right to live in the farmhouse indefinitely, the son argued that he was more than a mere shorthold tenant and that the trustee had, by his conduct over the years, acquiesced in its occupation as a permanent family home. He estimated that the family had spent about £100,000 on maintaining and improving the property, which had at one point been used as a care home.

In ruling on the matter, the High Court accepted that the son had always viewed the property as his family home. He hoped and expected that the trustee would never ask him to leave. However, he had throughout understood that he was not the property’s owner and there was no real evidence that he reasonably believed he had a legal right to insist on staying there forever. Even if he had held such a belief, it had not been communicated to the trustee.

The Court noted that there had been gaps in the son’s occupation of the farmhouse. He had gone to university and had for a substantial period made a life for himself elsewhere. The family had enjoyed the full benefit of improvements made to the farmhouse and the cost of them was counterbalanced by the low rent that they paid. The son had not relied to his detriment on any assurance given by the trustee, and the trustee’s decision to seek possession was thus far from unconscionable.

In granting possession of the property to the trustee, the Court found that the son occupied it as an assured shorthold tenant and that that tenancy had been validly terminated. He was, by agreement, given three months to vacate the farmhouse. The trustee had no ability to contract out of his statutory repair obligations under the tenancy and, the farmhouse having fallen into a state of some disrepair, he was ordered to pay the son £5,000 in damages.

Source: Private Client Library Content