Were beach huts chattels and did the occupiers have a tenancy of the plots on which they stood?

PRACTICE POINT: It’s not often that a case takes in as many diverse and basic points of law as those that arose in Gilpin v Legg [2017] EWHC 3220 (Ch). The question that the court had to decide, in relation to arrangements that went back decades and where there was very little to show what terms the parties had agreed, was whether the occupiers of five beach huts at Portland Bill had tenancies or licences, and whether the beach huts were chattels or formed part of the realty. There was no question of the beach huts constituting dwellings. But were they part of the realty? The huts were not annexed to the land – or only very slightly in order to protect against movement by the wind – and the evidence indicated that they could be dismantled. One, but only one, of the huts was likely to suffer serious damage as a result. But, in that case, the evidence indicated that it could have been moved without damage when it was first installed – and the fact that materials deteriorate over time, so that moving something without damage becomes more difficult, should not affect the status of the item. Was there a tenancy of the land itself? The judge reminded the parties that a “lease” or “tenancy” is a contractually binding agreement, not referable to any other relationship between the parties, by which one person gives another the right to exclusive occupation of land for a fixed or renewable period or periods of time, usually in return for a periodic payment in money: Street v Mountford [1985] AC 809. The lack of a right of re-entry was unsurprising, especially as there were no written documents evidencing the rights granted. But that did not mean that the occupiers did not have a periodic tenancy. Whether the huts were chattels or not, they occupied the land on which they sat and no one else could use the area in question. In the judge’s view, this meant that the occupiers had, in effect, a right to exclusive possession of the plots on which the beach huts stood. Furthermore, it was clear that the right to install the beach huts was originally granted from year to year – and not for five-yearly periods. The rent was payable annually and a periodic five-year tenancy would have had to have been created by deed: Law of Property Act 1925, section 52(1). A periodic tenancy, even though created orally within the short leases exception in section 52(2) of the Law of Property Act 1925, can be assigned at law only by means of a deed: Law of Property Act 1925, section 52(1): Crago v Julian [1992] 1 WLR 372. However, the landowner had accepted new hut owners in place of previous ones, usually in return for a payment on each sale. Whether that constituted an assignment in equity (which was good at least between the new hut owner and the then current landowner, even though it might not bind a good faith purchaser from the landowner), or a surrender and regrant, was not important. The landowner had served two different notices to quit on the occupiers. The first notices, of less than half a year in length, were too short to be effective. But the second notices had been effective and, as a result, the occupiers were no longer entitled to station their huts on the landowner’s land. Allyson Colby, property law consultant