Granting a licence is a useful method of avoiding granting an interest in a property and providing greater control to the landowner to deal with their land. This is particularly useful to public authorities who are often restricted from disposing of their landholdings.

However, the implications of this arrangement may be upon the landowner if its licensee causes a nuisance or creates an environmental liability is often underappreciated.

The recent court of appeal case of Cocking v Waring [2016] EWCA Civ 140 held a landowner liable in nuisance to its neighbour where the nuisance emanated from her daughter who resided at the property under a pure licence.

The landowner was held liable for the period in which she knew of the nuisance, but did nothing to abate it within a reasonable time, despite the fact that as a licensor, she was in complete control of the property, albeit not residing there.

Landlords are only liable for a tenant’s nuisance where they directly participate in or authorise the nuisance.  This is on the basis that once a lease is granted they have neither control nor possession of the property. In contrast a licensor is deemed to be in control of the property, notwithstanding the existence of a licence.

It is, however, worth noting that Arden LJ found that a different  set of facts could lead to a different result. Arden LJ gave the example of a landlord who has agreed to inspect and clean the drains on the demised property and a nuisance is caused by a combination of the tenant’s use of the drains and the landlord’s failure to perform its covenant. In those circumstances the landlord may be liable for the tenant’s nuisance.

The key issue in the Cocking case was the knowledge of the licensor of the nuisance and her failure to act. It is not clear what the outcome would have been if the Licensor had no knowledge of the nuisance.

The Cocking case is a timely reminder that the flexibility and advantages of a licence come at a cost of potential liability on the part of the licensor. The licence should in certain circumstances contain an obligation on the Licensee to maintain environmental insurance and the Licensor should carry out regular inspections of the property and activities on the site.

While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.