Formalities for Leases

Question 1

What are the 3 possible formalities for a lease?

Answer 1

1. Legal leases arising by express grant (deed)
2. Legal leases arising by operation of law (periodic tenancies)
3. Equitable leases arising by virtue of a contract or an informal grant

Question 2

What does s.52(1) LPA 1925 state?

Answer 2

If you wish to create a legal lease, you need a deed. Creation and transfer of a lease is subject to the same searches and enquiries as with freeholds.

Question 3

To create a valid legal lease you need a deed subject to s.52(1) LPA 1925, if a lease by deed for a period more than 7 years is to take effect what must you do?

Answer 3

Register it. It must be registered s.4(1)(c)(i) and s.27(1)-(2)(b) Land Registration Act 2002.

Question 4

What are the exceptions to s.54 LPA 1925 in terms of needing a deed?

Answer 4

The lease is for a period not longer than 3 years, includes periodic tenancies.
Lease is at best rent reasonably obtainable. There must be rent.
No premium fine is charged for the grant of the lease.
Lease takes effect immediately, visible to a third party purchaser.

Question 5

What does best rent reasonably obtainable mean and what case states this?

Answer 5

Fitzkriston LLP v Panayi- means the market rent

Question 6

If possession is not granted immediately do you need a deed? case?

Answer 6

Yes.
Long v Tower- deed not required if immediate possession takes place, without immediate possession there is no legal tenancy.

Question 7

What does s.4(1)(d) Land Registration Act 2002 state?

Answer 7

Leasehold estate takes possession after 3 months is an overriding interest.

Question 8

How does a Equitable Lease arise?

Answer 8

Arises where two parties contract to make a lease but then don’t formalise that lease by a deed. A deed formalises the contractual relationship and transfers the legal estate. The contract and deed would be identical. The contract shows the intentions of the parties

Question 9

What is the doctrine of Walsh v Lonsdale?

Answer 9

The doctrine says than agreement for a lease is as good as a lease. E.g. a lease which has been agreed in writing but has not been transferred by deed which is the formalised stage. The court will enforce the contractual provisions.

Question 10

What are the differences between Legal and Equitable leases?

Answer 10

1. A person’s right to treat an agreement as a equitable lease depends on them being able to obtain specific performance.
   Bell St Investments Ltd v Wood- no equitable lease because the tenant must have clean hands. In order for the lease to be enforceable. In this case the tenant had gone into possession and paid rent so periodic tenancy. Legal leases bind the world. Equitable lease require protection or remedy. He had a legal lease, not an equitable lease.
2. Where the reversion is unregistered title, the equitable lease can be registered as a land charge s.2(4) Land Charge Act 1972.
   Lloyds Bank v Carrick- Equitable lease that he wanted to enforce against the bank as property was sold, claimed they knew he lived there. HELD: equitable lease void for non-registration against a purchaser for value. So performance was also irrelevant, no doctrine of notice no longer survives.
3. Where there is a reversion e.g. the landlords title, is registered title an equitable lease not protected by notice cannot be an overriding interest, Schedule 3 para 1 LRA 2002 as there is no deed. not legal. If you have actual occupation then it falls under schedule 3 para 2, leases of less than 7 years can be overriding. Equitable lease can be protected by registering it under s.32 LRA 2002.

Question 11

Do equitable interests after 1925 exist?

Answer 11

No other than notice. The notice requires registration irrespective of whether the land is registered or unregistered. So there is a requirement that equitable leases are registered.