Essential Requirements Of A Lease Flashcards
What is a lease?
A lease is created when a landlord grants the temporary right to a tenant to use and enjoy land exclusively for a specified duration.
How does a lease differ from a licence?
A lease confers exclusive rights to occupy land, while a licence grants personal permission to be on someone’s land.
What are the key characteristics of a lease?
For a lease to exist, there must be certainty of term and exclusive possession.
What is certainty of term?
Certainty of term means the tenancy must be granted for a specific duration, making it clear when the arrangement will end.
What is exclusive possession?
Exclusive possession means the right to exclude all others from the property, including the landlord.
What case established that substance matters over labels in lease agreements?
Street v Mountford [1985] AC 809 established that courts will look at the substance of an agreement rather than its label.
What are the two types of terms that can demonstrate certainty of term?
Certainty of term can be shown through a fixed term or a periodic term.
What is a fixed term lease?
A fixed term lease has a maximum duration known from the outset, such as a lease for 5 years.
What is a periodic tenancy?
A periodic tenancy is a lease that continues indefinitely until either party gives notice to terminate, typically on a weekly, monthly, or yearly basis.
What must formalities in a lease include?
Formalities are the rules that must be followed to create a legal estate, requiring a high degree of adherence.
What factors may indicate a lack of exclusive possession?
Factors include the landlord retaining a key, providing services, or having a sharing clause.
What is the significance of the landlord providing services
In Marchant v Charters [1977] 1 WLR 1181, it was held that if a landlord provides services, there is a licence, not a tenancy.
What is the concept of joint tenancy?
In a joint tenancy, all co-owners are deemed to constitute one single entity and must hold the four unities: possession, interest, time, and title.
What are the four unities required for a joint tenancy?
The four unities are unity of possession, unity of interest, unity of time, and unity of title.
What can defeat a lease despite its characteristics?
A lack of intention to create legal relations or a service occupancy can defeat a lease.
What is a service occupancy?
Service occupancy arises in employer/employee relationships where the occupier must live on the premises for job performance.
What case illustrates the concept of service occupancy?
In Norris v Checksfield [1991] 1 WLR 1241, the court held there was no lease due to service occupancy as the driver needed the premises for job performance.
What was the case focus of Norris v Checksfield?
A lorry driver claimed a lease of the premises he was occupying as part of his job.
What was the court’s holding in Norris v Checksfield?
The court held there was no lease and it was a service occupancy because he required the premises for the better performance of his job.
What was the case focus of Royal Philanthropic v County?
A teacher claimed he had a lease for a house near the school where he taught.
What was the court’s holding in Royal Philanthropic v County?
The court held he had a lease because the occupation did not enable him to better perform his duties as a teacher.
What is the key question to determine service occupancy?
Whether the employee is in occupation for the better performance of their job role.
What is the general rule for creating a legal lease?
A deed must be used (LPA 1925, s 52).
What is required for leases over 7 years?
The lease must be registered (LRA 2002, s 27(2)(b)(i)).
What happens if a lease over 7 years is not registered?
A legal leasehold estate will not have been created (LRA 2002, s 27(1)).
What is the requirement for leases of 7 years or less?
They do not need to be registered and will be binding on a new freehold estate owner as an overriding interest (LRA 2002, sch 3 para 1).
What are the conditions for the short lease exception under LPA 1925, s 54 (2)?
The lease must take effect in possession, be granted at best rent, and not be subject to a fine or premium.
What types of arrangements fall within the short lease exception?
Short fixed term leases, express periodic tenancies, and implied periodic tenancies.
What is an equitable lease?
An equitable lease may be created if parties enter into a contract for lease or fail to create a valid deed.
What must be present for a tenant to have an equitable interest?
There must be a document that complies with LP(MP)A 1989, s 2 and the remedy of specific performance must be available.
What prevails in case of conflict between common law and equity?
Equity will prevail.
What are the requirements for a lease term over 7 years?
Deed + registration.
What are the requirements for a lease term of 7 years or less?
Deed; the lease will be binding as an overriding interest.
What are the requirements for a lease term of 3 years or less?
No formalities required if it takes effect in possession, is granted at market rent, and no premium is payable.
What happens if parties try to grant a legal lease but fail?
The tenant will have an equitable lease if the agreement is in writing, contains all terms, and is signed by both parties.
