ARE ALL GUARDIANS ANGELS?

15 / 03 / 2022

Properties can be empty for a number of reasons but an empty property is at risk from squatters, vandalism and theft. Property guardians have often been the solution. A property is occupied, usually by a working professional, under a non-exclusive licence agreement to deter squatting, vandalism, antisocial behaviour, theft of materials and so on and the whole process is managed by a property guardian company. We seek to highlight some points you might want to think about when using guardians following some recent cases.

Beware a change of use for planning purposes

A recent decision dated 3 February 2022 by the Planning Inspectorate (Appeal Ref: APP/U5360/C/20/3265866 concerning William IV, 7 Shepherdess Walk, London, N1 7QE) confirmed that the use of property guardians in a pub was a material change of use to residential use. This was found to be the case even though the guardians:

  1. were only present and in occupation for the purposes of security and safeguarding (in return for a below market rent); and
  2. were subject to restrictions on carrying out any works.

The Planning Inspectorate upheld an enforcement notice issued by the London Borough of Hackney on the basis that the use of the ground floor and basement of the pub for residential purposes was materially different from the use as a public house. As to its temporary nature, there was no guarantee of how long the residential use would continue because, if it proved difficult to rent out the public house then, it was possible the guardians could remain in occupation for some time.  If that residential use continued for four years, a certificate of lawfulness for a material change of use could be applied for.

We suspect more will follow on this case as the use of guardians in a commercial property with no residential element is a very helpful security measure for property owners who may have no intention to alter the permitted use of a property – particularly if the guardians are only present until a development can start or a tenant is waiting to occupy.

Could the building become an HMO?

In a decision dated 25 February 2022 the Upper Lands Tribunal has decided in the case of Global 100 Limited v Carlos Jimenez, Ruben Sanchez, Alejandro Morales that a licence under the House in Multiple Occupation (HMO) regime was needed.

This case involved the former Addison Lee Office Building at 35-37 William Road, Euston, London which was occupied by guardians with a communal bathroom. It was held that the presence of the guardians meant that the use of the property was for living accommodation. The performance of their duties did not amount to use of the property for something other than its residential use. The building required an HMO licence.

This decision was also made in the context of the purpose of the HMO regime. The tribunal were clear that “[t]he purpose of the statute is to provide protection to the residents of converted buildings with shared facilities by bringing them within a scheme of local authority oversight of their housing conditions.” So whilst a person might be there to deter others causing some mischief, it is still a home and, as such, needs to meet the rules. This comes with drawbacks for the property owner and the guardian services provider. It means that there will be financial consequences in the context of licensing fees, regulatory requirements, criminal liability for failures to comply and potentially, a repayment of (highly discounted) rents paid by the guardians. Property owners are unlikely to want these burdens so it will depend on whether the guardian services companies will comply in exchange for their service fees.

Key points

  • Property guardians are used to protect vacant properties but the use of a property for residential purposes comes with consequences.
  • If the vacant property has a commercial use, there could be a change of use for planning purposes to residential use.
  • A residential use might bring the building within the Houses of Multiple Occupation regime which comes with regulatory obligations.