No Bull Real Estate

Find out what differentiates tenants from occupants, boarders, lodgers and squatters in this legal overview. To understand the difference between tenants, occupants, boarders, lodgers and squatters, it is necessary to review some basic concepts of contract law.

Hierarchy of interests in land

There is a hierarchy of interests in land recognised by common law. At the top is the government, which possesses the ultimate or ‘radical title’ to all land. This means the Crown can make laws that affect the ownership and use of land. The next interest beneath
the Crown is commonly referred to as ownership. It gives the owner the right to control who occupies the land, who goes upon the land, the use of the land and the transmission of the land. Below the owner is the tenant, who derives their interest under a contract, or lease.

Tenant rights

Under a lease, the owner transfers to the tenant the sole right to possession of the land; i.e. the right to occupy the land and to decide who goes upon the land in return for consideration – usually rent. Therefore, for the duration of the lease, the tenant may exercise this right against the world at large, including the owner.

Contractual licenses
 
The next interest down in the hierarchy is a contractual license – a contract between the person with the right to possession (which may be the owner, but if a tenancy exists over the land then it is the tenant) and an occupant. The owner/tenant gives permission to the occupant to go upon the land or to occupy the land on agreed terms but does not transfer the sole right to possession to the occupant. An example is a person living in commercial residential premises such as university colleges or long-term motel accommodation. The important difference between a tenancy and a contractual license is that under a contractual license the owner/tenant could enter the land or premises.

Boarders and lodgers

A boarder or lodger agreement is generally a revocable contractual license. Boarders and lodgers don’t have the right to exclusive use of their room or common facilities and the owner/tenant may enter the boarder’s or lodger’s bedroom in accordance with their contractual agreement. The distinction between boarders and lodgers is largely historical and not that relevant today. A lodger is a person who occupies a room in the house of the owner/tenant on a fee-paying basis, usually under a set of house rules, but otherwise provides for themselves. A boarder is a lodger who is also provided meals, cleaning, linen and other domestic services.

Bare licenses

A non-contractual license, sometimes called a bare license, is the next interest down in the hierarchy. It is permission from the owner/tenant for a person to go upon the land for as long as the owner/tenant is prepared to tolerate it and to leave when asked to. An example is an invitation to be taken in for the night as a guest.

Squatters

At the bottom of the hierarchy is the squatter who is a person who has no right to be upon the land and is therefore a trespasser. The only right a squatter has is for reasonable force only to be used in their eviction. Trespass is a crime and so it is a matter for the police to evict squatters.

When a dispute arises
 
Disputes arising from tenancies are resolved by different bodies depending on the nature of the tenancy:

Residential tenancies are within the jurisdiction of the Consumer Trader and Tenancy Tribunal (CTT). Purely monetary disputes arising from residential tenancies can be taken to the Local Court but will generally be sent back to the CTTT.

Retail and commercial tenancies up to a prescribed monetary limit are within the jurisdiction of the Administrative Decision Tribunal (ADT). Again, purely monetary disputes can be taken to the Local Court, District Court or Supreme Court, but generally the courts will return the matter to the ADT.

Agricultural tenancies are dealt with by the Director General of the Department of Agriculture, who may refer the matter to a relevant court.

Disputes between owners/tenants and occupants (including boarders and lodgers) are contractual based and fall within the scope of the Consumer Claims Act 1998. They would therefore come within the jurisdiction of the General Division of the CTTT. While disputes between tenants or between occupants have to the taken to the Local Court. Squatting, on the other hand, is a crime and is therefore a matter for the police.

* The Residential Tenancies Act 1987 (NSW) does create a form of statutory tenant which differs in some respects from tenancies at common law.

by: Allan Anforth

via REINSW Journal May 2010