Serviced guest house owner faces £10,000 loss?

Hello, I run a small, serviced guest house in the London Borough of Barnet and would be interested to hear whether other accommodation providers have faced a similar situation.

An occupier took a room under a signed serviced-accommodation licence in mid-2025. The agreement states that no tenancy is granted or intended and that facilities are shared.

He paid for around six months but stopped paying in January 2026. I served written notice terminating the licence and requiring him to leave by 11 February, but he has remained in the room.

The unpaid accommodation and use-and-occupation charges I am claiming now exceed £10,000 and are increasing by £60 a day.

There have also been incidents that have caused disruption and concern among other guests. These were reported to the police, and one resulted in an arrest, although no charge followed. One elderly guest now avoids the shared areas because she says she feels unsafe.

I took specialist legal advice through the panel solicitors appointed by my legal-expenses insurer. I was advised that, because I accept payment but do not live at the premises, the resident-landlord and excluded-occupier exceptions do not apply.

The solicitors’ advice was that a possession order is required and that I must not attempt to remove the occupier myself. Although the written agreement describes the arrangement as a licence, I understand that the court will ultimately determine its proper legal status.

I filed a possession claim using forms N5 and N119 in February 2026. I am still waiting for the claim to be listed and for a hearing date.

Meanwhile, Barnet Homes, which manages housing services on behalf of the London Borough of Barnet, has explained its position through complaint correspondence rather than a formal homelessness decision.

My understanding is that the council does not currently consider that it owes the occupier a homelessness duty.

I am challenging that position and there is now a live complaint with the Local Government and Social Care Ombudsman. One of the issues I have raised is whether someone whose licence has ended may be regarded as homeless even though they remain physically in the accommodation.

From my perspective, I am caught in an impossible position. I cannot lawfully recover the room without completing the court process, but the occupier is not paying and the council does not currently appear willing to accommodate him.

My legal-expenses insurer has also declined to fund debt-recovery proceedings after its solicitors assessed the prospects of recovering the money at below 50%, apparently because of the occupier’s financial circumstances.

I therefore face the possibility of obtaining possession eventually but recovering little or none of the growing debt.

The main assured-tenancy reforms introduced under the Renters’ Rights Act do not appear to offer a straightforward solution to this type of disputed licence arrangement.

Has anyone running serviced accommodation, a guest house or a B&B experienced something similar? Is there any effective route I may have overlooked, and does the interaction between licence agreements, possession proceedings and homelessness duties deserve wider policy attention?

Alexander