Housing
Property guardians: an outline of the phenomenon
This introduction to the property guardians' phenomenon looks at, among other things, the extent and geographical reach, property standards and security of occupation.
About the author
Professor Caroline Hunter and Dr Jed Meers, York Law School, University of York.
Many readers may not have encountered property guardianship before. Those that have are likely to have stumbled across a building – perhaps a former care home, an office block or council-owned flats – with a sign proclaiming that this ‘property is protected by live-in guardians’. Passers-by may note that many of these premises, such as gyms, working men’s clubs or schools, may not look particularly suitable for habitation, or may wonder on what terms these guardians ‘protect’ them: are they guarding or are they renting?
The basic proposition of the sector is win-win: cheap(er) accommodation for those occupying the property, and a sizeable reduction in the costs of securing otherwise empty premises for the building owner. Research by the authors undertaken for the London assembly, however, suggests that some problems are widespread.¹ By drawing on data we collected in the course of this study, including a survey with over 200 guardians living in the capital, this article aims to provide an introduction to the phenomenon with a focus on four key issues: extent and geographical reach; property standards; the protection of deposits; and security of occupation.
Although many of the largest operators in the sector, such as Camelot, have been in operation elsewhere since the 1990s, property guardianship in its current form is fairly recent in the UK, with the bulk of companies being established from 2001 onwards. The exact number of property guardians living in the UK is not known. Estimates range from the London assembly’s figure of 5,000–7,000 guardians across the UK to Property Guardian UK’s estimate of up to 10,000.² It does appear to be the case, however, that the number of property guardians across the UK is growing.
Although much of the high-pro file activity in the sector has been confined to London and Bristol, it is important to underscore that the phenomenon is far from restricted to these areas. Our own analysis of property guardian advertisements indicates that companies are operating across England, with clusters of activity not just in London and the south west, but also in Birmingham, north-west England and west of Manchester.
In our research, the standard of accommodation varied sizably. Guardians were, in general, reliant on portable electric heaters or oil- filled portable heaters to heat their property, with nearly half having purchased their own form of heating to assist in keeping the property warm. Sixtytwo per cent felt able to keep bedroom space comfortably warm over the winter months, though this fell sharply to 45% when asked about other living space within the property. Perhaps connected to these problems, there was a very high prevalence of mould and condensation reported within the sample, with 37% of participants stating this was an issue compared with just 10% in the private rented sector more generally.
In terms of their overall satisfaction with repairs and maintenance, guardians were as dissatisfied as those living in the social rented sector, with 22% expressing disapproval. Of those guardians who were dissatisfied, this was generally because they felt that the property guardian company only did the bare minimum with respect to repairs and maintenance, or that the company was too slow in getting issues rectified.
As guardians often occupy on licence, the protections afforded to deposits under Housing Act (HA) 2004 section 212 do not apply. Notwithstanding this, relative to their licence fee payments, property guardians in the sample generally paid as high deposits as those elsewhere in the private rented sector, often outstripping their monthly fee by some margin, with most paying in the region of £700. A significant proportion of respondents highlighted problems with the recovery of deposits at the end of their occupation, with many participants requesting explicitly that deposits be lodged into a deposit protection scheme.
Although much has been written about the inherent lack of security for those living on familiar assured-shorthold tenancy agreements under HA 1988, the requirements of property guardianship are such that even this limited security is too great. In order to ensure that the property owner can take back the property without complications, guardian companies have sought to use licences for their greater flexibility.
The importance of this is shown on the Camelot website, which boasts:
The main condition for guaranteeing the flexibility of the Property Guardian concept is to make sure that the legal agreement between the client, Camelot and the Guardian is watertight. The proxies and license are updated continuously by lawyers specialising in property law.³
Indeed, all the guardians in our sample had licence agreements. The majority of guardians’ licence agreements were silent on how long they were occupying the property for (45.6%), with a further 8.8% unsure of whether or not they had been notified. Of those who did know their current period of occupation, there was a vast range in this time period stretching from one month to six years.
Significantly, a large proportion of guardians described their agreement as periodic, ie, rolling from one period to another (31.20%). This was almost always on a month-to-month basis, with one guardian detailing a weekly rolling agreement and another an annual rolling period. This form of contract lead to uncertainty. As one respondent said:
Informally, it has been mentioned that because the area itself is in a process of regeneration it is likely to be a longer term process. Not being able to realistically view how long you are likely to be staying makes it very difficult to judge how much, if any, money is wisely spent on basic repairs, decorating or costs of other activities that you can't take with you when you leave (para 11.7).
The nature of the terms in these licences – and the demands of avoiding granting exclusive occupation – have implications for the guardian’s control over the space in the property. The use of a licence allows for greater organisational control over the property, and occupier, than would be the case if a tenancy was offered. Most guardian firms impose additional limitations about conduct, and can be far more intrusive in terms of monitoring behaviour.
The experience of our respondents completely mirrored this. A number commented on the rules and the lack of privacy.
Lots of rules to follow: - no children allowed in the flat - no more than two guests at a time - guest cannot stay more than 3 nights without permission - guests cannot be left alone in the flat - no use of candles, incense or any naked flames - gas hobs not allowed and only small electric hobs allowed - they can enter the property without previous notice for inspections or repairs/checks (para 11.5).
The inherently insecure nature of occupying a property on a licence is a cause for concern, particularly for those guardians who are not fully aware of the implications of their status of occupation. Elsewhere in the private rented sector, the assured shorthold tenancy is hardly a bastion of secure occupation; however, a sector based on a model which abates even this standard is one which warrants scrutiny.
For more details on the study, please visit the property guardian page on the London assembly website.4 In an effort to clarify local authority enforcement powers, particularly with regards to the HA 2004, the authors have issued a Pocket guide to property guardians, which may be of interest to readers, especially those involved in enforcement action.5
1 Property Guardianship in London. A report produced on behalf of the London Assembly Housing Committee by: Professor Caroline Hunter and Jed Meers, available at: https://tinyurl.com/ya5xjnrv
2 Protecting London’s property guardians, available at: https://tinyurl.com/ybjelu3h
3 See https://uk.cameloteurope.com/property-guardians/reliable-legal-structure
4 Visit: www.london.gov.uk/about-us/london-assembly/london-assembly-publications/protecting-londons-property-guardians
5 Visit: www.propertyguardianresearch.co.uk Readers can request a free hard copy and sign up to our mailing list for future updates