A recent judgement has highlighted the importance of ensuring that the legal requirements for property guardian programmes are fully met, applying the highest standards of compliance for the benefit of both the guardians and the property owners. Doug Edwards, Managing Director of VPS Property Guardians, discusses the value of property guardians in today’s housing market.
The current rates hike controversy has bought increasing attention to property guardians’ schemes as being an alternative, albeit temporary, solution to finding affordable accommodation. Home seekers also have to contend with the rise of the cost of rent or ownership. There are some 50,000 homeless households in England alone, and the soaring costs of rent, and the high 5 to 6 figure deposits required to buy a property, has impacted hugely on people seeking accommodation.
Guardians occupy properties based on licence agreements that have a different set of legal rights to a lease or tenancy, to ensure vacant properties are protected and secure through being occupied on a temporary basis. If a property then becomes ready for redevelopment, vacant possession could be required, and the property guardian company would give a certain period of notice. Equally, guardians can give similar notice if they wish to leave the programme. For guardians, the temporary nature of such programmes is balanced by the benefit they receive from paying for the licence agreement at a rate often half of the market value for similar accommodation in that area.
Property guardians help to protect a property just by being occupied, but in addition it can also help mitigate business rates. What is important though is that such schemes are run efficiently and ethically, so that they are sustainable and meet the objectives of both the property owner and of the people living there.
It is essential that the agreement between the company managing the guardianship programme and the guardian clearly states that the guardian is a licensee and not a tenant. If this is unclear, it could result in a legal battle in which the guardian makes claims that they are a tenant with exclusive possession of the property. Property guardians must be managed as if they were a licensee. The basic principle of property guardians – securing vacant properties temporarily in return for low-cost accommodation - remains firmly based on sound legal grounds as licensees, provided programmes are managed efficiently.
Property guardians schemes are not a permanent answer to the housing shortage, but they do provide a temporary, effective, low-cost solution for some people seeking affordable accommodation. It’s not appropriate for some, such as families, and it must be managed properly and ethically, paying attention to regulations, and health and safety standards. When that happens, it is a win-win for all the stakeholders.