Certain term element to a leases problem question Flashcards
What is the second essential element of a leasehold estate?
A certain term.
Indeed, Lord Templeman, in Street v Mountford (1985), included ‘term’ as part of the definition of a tenancy, what was his definition of a tenancy?
Lord Templeman, “my Lords, there is no doubt that the traditional distinction between a tenancy and a licence of land lay in the grant of land for a term at a rent with exclusive possession”.
The second essential ingredient for a valid lease established by Lord Templeman in Street v Mountford is certain term, what is understood by certain term?
In essence, certain term means that a lease msut grant exclusive possession over land for a defined, limited, certain period of time.
What does this therefore require?
This means not only that the lease must start at a clearly defined moment, but also that the length of the term granted must be certain: for example, one year, one month, one week, one hour.
At the commencement of the lease, what must be possible?
At the commencement of the lease, it must be possible to define exactly the maximum duration of the lease, even if it is possible to end the lease at some time before this.
In the absence of this certainty, what will occur?
In the absense of a certain term, the grant of a lease will fail.
What did Professor Bright state in ‘The uncertainty of certainty in leases’ (2012)?
In leases; that in order to be a “term certain”, the beginning, the duration and the end-date of the lease must be ascertainable as at the commencement of the lease.
This requirement of certain term has a lengthy history, in which 1881 authority was certain term highlighted?
Marshall v Berridge 1881.
What was stated and by who in Marshall v Berridge regarding certain term?
Lord Justice Lush in Marshall v Berridge 1881 noted, “there must be a certain beginning and certain ending otherwise it is not a perfect lease”.
There are, in effect, two key aspects of certainty of term, what are they?
- Certainty of commencement of the lease;
- Certainty of maximum duration of the lease.
In regard to certainty of commencement of the lease, which auhtority provides that where there is no defines and certain date for commencement, no valid lease will exist?
Harvey v Pratt 1965.
In regard to certainty of maximum duration of the lease, which early authority provides that it must be possible to define the start date and the time at which the lease will come to an end?
Say v Smith 1563
Why does the requirement for certain term exist?
The requirement for certain term exists to guarantee that leases do not endure indefinately, which would plainly be inconsistent with the fee simple estate out of which the leasehold is carved.
Thus, when does dificulty arise in regard to certain term?
Difficulty arises where the length of the lease is demarcated by the occurance of an event rather than to a specific time period.
Which key authority provides that a lease will fail where the period of a lease is demarcated by the occurance of an event rather than to a specific time period?
Lace v Chantler [1944].
What occured and what was held in Lace v Chantler [1944]
In Lace v Chantler, Chantler let the house for “the duration of the war”.
It was held that Chantler had not created a lease. This was because ‘duration of the war’ is not determinable. It is not certain in terms of a length of time.
So all that was extant was a revocable licence.
What did Lord Greene MR note in Lace v Chantler [1944]?
“A term created by a leasehold tenancy agreement must be expressed either with certainty or by reference to something which can, at the time when the lease takes effect, be looked to as a certain ascertainment of what the term is meant to be, in this case, it was impossible to say how long the tenancy would last”.
This traditional approach of certain term was restored in which later authority?
Prudential Assurance Co Ltd v London Residuary Body [1992].
What occured and what was held in Prudential Assurance Co Ltd v London Residuary Body [1992]?
- London county council let Mr Nathan a strip of land for a market stall,
- They said in agreement it would last until the road his market was placed was widened.
- The council planned to widen the road in the near future, they never did.
- This left him with the land for 60 years with low revenue.
- The council sold the land and the purchaser wished to revoke his tenancy; they were able to do so.
- Because the initial agreement was not for a certain term, he did not have the protection of a lease, no certainty.
There is a peculiar exception to the certain term rule, what is this?
Law of Property Act 1925, S149(6).
What does the Law of Property Act 1925, S149(6) provide?
This is an exception – if you set up a lease to last for a life of someone, because of this subsection, the law does not allow the lease to fail.
Instead, it imports the idea the lease will last for 90 years.
This is surprising because we think a lease for the life of someone would be uncertain.
In which authority was S149(6) seen to be applied in order to rescue an uncertain term?
Skipton Building Society v. Clayton (1993)
What occured and what was held in Skipton Building Society v. Clayton (1993)?
- A couple sold their home subject to agreement that they may live in it for free for the rest of their lives.
- They had a lease for 90 years in application of this subsection.
- Lease for life is uncertain, but lease for 90 years is allowed.
In which later authority was S149(6) seen to be applied in order to rescue an uncertain term?
Berrisford v Mexfield Housing Co-op [2011] UKSC.
What occcured and what was held in Berrisford v Mexfield Housing Co-op [2011] UKSC?
- Mrs Beresford owned property in north London originally had freehold.
- Difficulty paying her mortgage, sold it to Maxfield.
- Attempt to remove her years later from the property.
- Lord Neuberger was then able to make use of s.149(6) LPA1925. This was because he thought that the agreement would give rise to a tenancy for life (prior to 1926). The effect of the section was that the agreement would be treated as a tenancy for a term of 90 years, determinable on Mrs. Berrisford’s death or in accordance with the agreement
In Mexfield Housing Co-op [2011], the courts expressed their frustrations with the decision in Prudential Assurance, what did Lady Hale argue?
“The certainty rules have an Alice in Wonderland quality which makes it unsurprising that distinguished judges have sometimes had difficulty with them”.
In Mexfield Housing Co-op [2011], the courts expressed their frustrations with the decision in Prudential Assurance, what did Lord Neuberger argue?
“The law is not in a satisfactory state, there is no apparent practical justification for holding that an agreement of a term of uncertain duration cannot give rise to a tenancy”.
Whilst for Lord Neuberger, there was much to merit changing the law, what did the court refuse to do and why?
The court refused to jettison a rule that had been regarded as fundamental for ‘many centuries’.
What did S Bridge in ‘Periodic tenancies and the problem of certainty of term’ 2010 argue in regard to criticising certain term?
“If the parties know where they stand, int he sense that the contract between them is sufficiently certain, then that should be enough”.
Summasire these last few slides,
Leases must be for a fixed term determinable at the
outset. That is, you must know when the lease begins
and ends and how long it will last.
Law of Property Act 1925, s.149(6) provides an exception, turning ‘leases for life’ (which are not for a
fixed term) into 90 year leases.
Mexfield Housing Co-op [2011] was revisited in which later authority?
Southward Housing Co-operative Ltd v Walker and others [2015].
What occured in Southward Housing Co-operative Ltd v Walker and others [2015]?
- The facts are relatively straightforward. The claimant, Southward Housing Co-operative Ltd was a housing association. It granted Vicky Walker (and David Hay), who was the defendant, a tenancy.
- There was an agreement for the occupation of 8 Kimber Road, Wandsworth.
- This document stated that the agreement was for a weekly tenancy.
- It also provided that the claimant would only end the tenancy with a notice to quit on one of the grounds that was set out in the agreement.
- One of these grounds was the non-payment of rent.
- The usual happened, that is to say the defendant Vicky Walker got into financial difficulties and in consequence into arrears with her rent. As a result the claimant, the housing association served notice to quit.
- In due course they started proceedings for possession of the property.
- The defendant sought to defend herself. She argued, inter alia, that the agreement was one of uncertain term which at common law was treated as a tenancy for life, and therefore, pursuant to s.149(6) LPA1925 took effect as a 90 year lease.
What was held in Southward Housing Co-operative Ltd v Walker and others [2015]?
- Hildyard J held that in the instant case although there was an agreement that could not take effect as a tenancy, the general rule was that such an agreement was a lease for life which s.149(6) LPA1925 converted into a 90-year term.
- However, this outcome yielded to the plain contrary intention of the parties. Hildyard, J held that it had not been the intention of the parties that the defendant should be legally entitled to enjoy the premises for life.
- Accordingly the judge held that the agreement constituted a contractual licence taking effect between the two parties.
What did Justice Hildyard state in his judgement in Southward Housing Co-operative?
Hildyard, J notes, “…it was not the intention of the parties that they should be legally entitled to enjoy the premises for life”.
What is another major exception to the fixed
term rule?
Periodic terms.
Why are periodic terms and exception to certainty of term?
A major exception to the fixed term rule because periodic terms can just roll on indefinitely.
Tenancy ‘month to month’ or ‘week to week’.
Which authority provides that periodic tenancies may still be deemed certain and be considered?
Javad v Aqil [1991]
What occured in Javad v Aqil [1991]?
- Sekander Javad was the landlord.
- Mohammed Aqil was the tenant.
Javad as landlord was seeking possession of the property, 188 Brick Lane, London, SE1 - Aqil had lost his place of business and had nowhere to manufacture leather goods.
- A landlord took pity on him, so the case presents.
- Aqil paid the landlord £2500 and the landlord gave him the keys to a property on Brick Lane, London.
- This was in anticipation that they would be able to agree the terms of a lease in due course.
- They never could agree on a formal lease to last a long period, but Aqil did agree to pay some rent quarterly.
- That is, every three months.
- In the end it turned out that the landlord did not get on with Aqil and he tried to get him to leave the property.
- They disagreed over the quality of the property and the fact that there were workmen there.
- Aqil argued that he had a periodic lease and that he would pay rent every three months.
What was held in Javad v Aqil [1991]?
- The Court of Appeal agreed that a lease could arise in such circumstance and that there is such a thing as a periodic lease.
- However, the court had to look at the intention of the parties in order to find out if one has been created.
- The court went on to hold that is was clear in the case of Aqil that he had not got on well with the landlord, and so there was no intention to create a periodic lease. In essence the parties were still negotiating about the actual lease.
This case does two things, what does it tell us?
(1) It reminds us that we can have periodic tenancies, three month to three month - three month to three month, etc.
(2) It demonstrates that there will be no lease at all unless the parties intend to create a lease.
