Does “Management” Count as Landlord Occupation? Lessons from Star Pubs v Gunmakers Arms

The Central London County Court has handed down judgment on a pub management agreement model known as “Just Add Talent” (JAT) and whether it amounted to landlord occupation under the Landlord and Tenant 1954 Act.

The judgment of Star Pubs Trading Ltd v Gunmakers Arms (Essex) LLP offers important clarification on opposing a lease renewal where the landlord intends to operate the premises via a management services agreement (MSA) rather than direct, physical occupation.

This article looks at what landlords and tenants need to know about management agreements and security of tenure under the 1954 Act, and under what grounds a landlord may evict a tenant even when they do not intend to physically occupy the premises.

Background to the Case

The Gunmakers Arms pub was tenant of premises owned by the landlord Star Pubs Trading. The landlord intended to possess the premises at the end of the lease, but via their “Just Add Talent” (JAT) business model, a method of management services agreement (MSA).

Crucially, this would mean that the landlord would not physically occupy the premises and directly manage the premises’ operations.

• The tenant had the benefit of security of tenure under the 1954 Act, which was not “contracted out” of the lease.
• The landlord served a section 25 notice, opposing statutory renewal protections, based on introducing its third-party operator JAT model.

The tenant disagreed, arguing this did not amount to the landlord’s “own occupation”, because:

• The third-party operator would run the business day-to-day.
• The landlord would have no direct or physical on-site presence.

The legal issue: What counts as “own occupation”?

Under section 30(1)(g) of the 1954 Act a landlord can refuse lease renewal if it:

“intends to occupy the holding for the purposes, or partly for the purposes, of a business”

The landlord in this case must demonstrate:

• A fixed and settled intention to occupy
• A realistic prospect of occupying

The key question was thus whether a landlord’s “own occupation” could include a third-party operator via MSA model.

Count Court Judgment

The Central London County Court disagreed with the tenant’s defence and ordered termination of the tenancy without renewal.

The Court held that:

• Star intended that the premises would be run using its well-established JAT model. This was well-documented by Star.
• There was no obstacle to Star carrying out such as desire.
• Despite providing no staff and having no on-site presence, the MSA would give Star a “striking level of control over the business”.

The decisive factor is therefore control. The control was demonstrated by Star via:

• Ownership of the business and assets – Star retained this
• Control over contracts – Star itself entered into supply, marketing and operational contracts, not the third-party operator
• Pricing – Star set prices, not the operator
• Operational manual – Star provided stock, marketing, rota, and other process details in its manual
• Financial risk – Star retained this, including key revenue streams
• No rent payable – the third-party operator was not required to pay rent, differentiating the arrangement from a tenancy.

Key Takeaway for Landlords

The ruling offers landlords greater flexibility in recovering possession when a MSA model is used.

1.      MSA models can support ground (g) to oppose renewal

Landlords can successfully oppose lease renewal even where a third-party operator runs the site, provided the arrangement is structured correctly.

2.      Control is key

To rely on ground (g), landlords should ensure:

• Business ownership is retained by the landlord, not transferred to the operator
• Pricing, supply, and operational decisions are retained by the landlord
• The operator acts strictly as manager or agent
• There is no rent or exclusive possession

3.      Evidence of intention must be robust

Landlords must demonstrate a genuine, settled intention backed by:

• Internal approvals
• Strategy documents
• Consistent commercial planning

Key Takeaways for Tenants

The ruling highlights for tenants that security of tenure is not absolute.

1.      Challenging ground (g) is harder where MSAs are used

This case shows tenants cannot rely on physical occupation arguments alone.

Tenants may lose renewal rights, even if

• The landlord has no staff on site
• A third party employs all personnel

2.      Focus challenges on substance—not labels

Tenants should instead scrutinise:

• Whether the operator really has autonomy
• Whether the landlord’s “control” is genuine or superficial
• Whether the arrangement could be a disguised tenancy

3.      Early strategy is essential

Once a landlord commits to a structured model like this, it becomes difficult to defeat ground (g) without strong evidence.

Final Thought

The ruling of Star Pubs v Gunmakers Arms sends a clear message:

A landlord does not need to physically occupy premises to successfully oppose the security of tenure of a commercial lease renewal under ground (g) of the 1954 Act—but you must control the business carried on there.

For landlords, that opens the door to more flexible operational models.

For tenants, it means a more sophisticated and evidence-based defence is essential.

Seeking Legal Support

This case underscores the importance of getting both structure and strategy right in commercial property disputes, and ensuring that you approach your commercial leases and ongoing operations in the right way.

At Napthens, our Commercial Property Litigation team can support you with:

• Opposed lease renewals under the 1954 Act
• Advising on ground (g) strategies (for landlords and tenants)
• Challenging or defending “own occupation” claims

Our Commercial Property team is on hand to support your wider property strategy and protect you from disputes, with work including:

• Ensuring your wishes are reflected in a commercial lease
• Drafting and reviewing management services agreements
• Strategic asset repositioning within property portfolios

Get in touch today to speak with an expert.

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