FORMAL REQUIREMENTS FOR CREATION OF LEASE Flashcards
What is the difference between a short and long term lease?
A short term lease is for 3 years.
What are the relevant sections of the PLA?
- s10 PLA
- s11 PLA
- s59 PLA
What are the requirements for a long Term lease?
- s11(1)(a) it must be in writing and signed by the person making it.
- s59, for it to be enforceable, it must be in writing and signed by all parties who have obligations
What are the consequences of failing to comply with formal requirements?
- No LEGAL lease passes.
- If s59 is satisfied, then the contract is valid, but it is a contract FOR a lease.
- The document may be an equitable lease
What are the requirements of an equitable lease?
- Specific Performance must be available; and
- Pursuant to s11(1)(c)
If these are fulfilled, the principle in Walsh v Lonsdale applies.
What happens if the equitable lease is not written as pursuant so s11(1)(c)?
- If sufficient acts of Part Performance can be proven, then it can be classified to be an equitable lease.
Note: equity rules prevail over s129.
What is the effect of s129?
Where the tenant is in possession and paying rent, the common law will imply a yearly tenancy.
What s129 does is: converts this to a tenancy at will determinable by 1 month’s notice.
What is the relevance of Leitz’s case?
The parties signed a lease for 6 years but they never registered it.
The tenant goes into possession and pays rent for a number of years. The T gives 1 months notice to quit and is given pursuant to NSW s1229 equivalent.
The landlord is unhappy as the term of the lease is for 6 years and so claims breach of contract and wants rent for due balance of the fixed term.
Held:
- There was no passing of legal lesehold.
- But entry into possession and paying rent, the common law did imply a tenancy, which s129 converts into a tenancy at will determinable upon 1 month’s notice.
- The 1 month’s notice did terminate the tenancy at will, however did not terminate the whole relationship.
- The lease operated as a contractual agreement and this was separate from the tenancy at will implied at law.
What happens if there is a short term lease created orally?
S12(2) covers this. The lease need not be in writing, but:
- The it must be “taking effect in possession” which means the Tenant must be in possession of the land
- The agreement must be capable of Specific performance (fulfil the requirements see before).
- There must be consideration.
This section allows the oral agreement to take effect as a legal lease.
Is possession relevant at all to a formal legal lease?
S102(2) - no, it does not matter when entry into possession occurs.
What happens where the lease has been created orally, but is a long term lease and falls out of s12(2)?
Prove Acts of Part Performance!!
What is a lease?
A leasehold interest is generally an interest in land for a fixed period of certain duration granted in consideration for the rent reserved.
What are the requirements for a lease?
- Exclusive possession of the land
- Certainty of duration with a certain commencement and ending date
- Proper Creation
What does Exclusive possession mean?
This means the Tenant has a right to exclude the whole world including the landlord (unless there is a specific clause).
What is the test for exclusive possession?
The test is one of substance of the agreement and not of form
Radaich v Smith
It matters not what the agreement is called.
Smith had a written agreement with Radaich giving her exclusive right and license to lock up shop. The agreement was for 5 years and she had various responsibilities such as:
1.Locking up shop
2. Securing premises
3. Clause said R had to give up possession at one point (why have this if she does not have legal exclusive possession?)
The agreement was called a “License”.
Courts held:
- This was a lease, even though it was called a license.
- Exclusive possession was given, and the terms of the agreement contained that right.
What is certainty of duration?
The lease must have a certain date of commencement and a certain date of ending. Without either, the lease is void.
What are examples of certainty of duration?
- Prudential Assurance v London Residuary Body
2. Greco v Swineburne
What is the relevance of Prudential Assurance v London Residuary Body?
In this case, the land was for until it was required by the council for road widening purposes.
This was held not to be sufficiently certain and was void
What is the relevance of Greco v Swineburne?
A period for a life, or lives is NOT VOID for uncertainty.
What is required for property creation?
FORMAL REQUIREMENTS FOR LEASES. GO BACK
What are the types of Leases?
- Fixed Term Lease
- Periodic Tenancy Lease
- Yearly Tenancy
- Tenancy at will
- Tenancy at sufferance
- Tenancy by estoppel
What is a fixed term lease?
A fixed term lease is for a DEFINED period of time.
What is a periodic Tenancy
Periodic tenancies are defined by the period of the tenancy and is repeated on a cyclic basis without the need for any new, fresh agreement.
The tenancy is valid until a notice to terminate has been given.
When can a periodic Tenancy be created?
- By express agreement either written or oral
2. By legal implication: a periodic tenancy can be implied from terms agreed and surrounding circumstances.