This mattered for the purpose of statutory tenant rights to a reasonable rent, and had a wider significance as a lease had "proprietary" status and would bind third parties.

On 7 March 1983, Roger Street, a Bournemouth solicitor, gave rooms 5 and 6 in No 5 St Clement’s Gardens, Boscombe to Mrs Wendy Mountford for a ‘licence fee’ of £37 a week, terminable on fourteen days’ notice.

[2] He also noted that it was conceded that Mrs Mountford was given exclusive possession, and then landlords will only have limited rights to enter, view and repair.

In Allan v Liverpool Overseers (1874) LR 9 QB 180, 191-2, Blackburn J said: ‘the landlord is there for the purpose of being able, as landlords commonly do in the case of lodings, to have his own servants to look after the house and the furniture, and has retained to himself the occupation, though he has agreed to give the exclusive enjoyment of the occupation to the lodger.’[...] He may be owner in fee simple, a trespasser, a mortgagee in possession, an object of a charity or a service occupier.

[...] It was submitted on behalf of Mr. Street that the court cannot in these circumstances decide that the agreement created a tenancy without interfering with the freedom of contract enjoyed by both parties.

In relation to residential properties, a line of cases have attempted to resolve the related issues of what amounts to exclusive possession and what amounts to a 'dwelling', as the legal effect of Street v Mountford, taken together with the Rent Act 1977 (as amended by the Housing Act 1988), is that a tenancy or lease exists only if exclusive possession is granted of 'a dwelling'.

In all these cases the courts have repeatedly stressed the need to look at the reality of the arrangement, and to disregard the artificial labels which are typically employed in the documents.

The House of Lords decided that as the flat was in reality too small to accommodate others, so that it was incapable of actually being shared, the wording was merely a pretence intended to evade the Rent Act, and that in law the arrangement accordingly amounted to a grant of exclusive possession.