L2 - Leases (rev notes)

Question 1

defº : ‘term of years absolute’

Answer 1

s(1) LPA: ‘term of years absolute’ = lease = one of the 2 legal estates in land

≠ fee simple absolute in possession : limited nº of years BUT content of the right is the same: right to exclude others from the land for the duration of the lease (incl landlord & his successors in title)

Question 2

defº : ‘term’

Answer 2

= definite (fixed) period of time (as opposed to indefinite = freehold)

/!\ not only of limited duration (so would be life estate), duration must be fixed= Lace v Chatler (1944) => purported lease ‘for the duration of the war’ could not take effect as a legal estate bcs not a grant for a term (exact date of end unknown)

Question 3

s205(1)(xxvii) LPA 1925

Answer 3

lease dosnt have to be for a y or nº of years, can be for less, or for several periods separated from one another

=> eg 3 successive bank holidays in Smallwood v Sheppards (1895)
=> also time sharing in Cottage Holiday Associates Ltd v Custom and Excise Commissioners (1983)

Question 4

No requirements for leases to be in possession

Answer 4

leases can be granted to take effect (= allow T to take possession) in the future

=> a lease that doesn’t take effect immediately = a reversionary lease
- must be created by deed, even if short
- void if takes effect more than 21y after date of instrument creating it = s149(3) LPA 1925

Question 5

Lease, sublease and underlease

Answer 5

Freeholder (F) grants lease to tenant T => T has legal estate and right to exclude F

T can grant sublease to subtenant S (must be shorter than original lease = ‘headlease) => T is S’s landlord - S has right to exclude T and F

S can grant an underlease to undertenant U (for shorter period than sublease) => S is U’s landlord - U can exclude S, T and F

=> S, T and F are entitled to possession of the land - but can only take possession after tenant(s)’ right to possession expires else’s right to possession expires (S after U, T after S and F after T)

=> they have a reversion = right that possession will revert to them on the termination of estates carved out of their own

+ F has freehold reversion, T and S have leasehold reversion

Question 6

Leases as contracts (5)

Answer 6

Leases normally created by contract => ordinary principles of contract law apply (but also some special rules bcs special kind of contract)

• Possible for a lease to be frustrated = National Carriers Ltd v Panalpina (1981) (HL)
• Possible for a lease to end because of a repudiatory breach = Hussein v Mehlman (1992)
• Possible for 1JT alone to serve notice to terminate joint periodic tenancy = Hammersmith and Fulham LBC v Monk
• possible to gave a lease-like contractual relationship even though there is no proprietary interest in the land : a ‘Bruton tenancy’ = Bruton v London and Quadrant Housing Trust (2001) (HL)

Question 7

Leases as contracts - possible for 1JT alone to terminate joint periodic tenancy

Answer 7

= Hammersmith and Fulham LBC v Monk

=> What Lord BW calls ‘contractual approach’ to the pb :
- proprietary approach = not great that one JT can unilaterally deprive others of their proprietary rights in their home
- contractual approach = not great that JT who moves out when relationship breaks down might end up remaining bound by oblº under the lease until such time as other JT(s) consent(s) to determining it

Question 8

Different types of leases (6)

Answer 8

• fixed terms
• periodic tenancies
• leases for life
• tenancies at will
• joint tenancies
• Bruton tenancies

Question 9

Fixed terms

Answer 9

= for a defined nº of years (eg 99y lease)

Question 10

Periodic tenancies

Answer 10

= run periodically & renew automatically until one party terminates (omº to serve notice = implied ag to continue for another term)

Question 11

Leases for life

Answer 11

take effect as 90y lease under LPA 1925, s149(6)

determinable on specified event (eg death or marriage) if parties serve notice (not automatic)

/!\ only recognised by LPA if for value

Question 12

Tenancies at will

Answer 12

= where T occupies land w/ L’s permission on terms that the tenancy may be terminated by either party at any time

Can be granted expressly or arise by implication from the acts of the parties (eg T continues to live in property w/ L’s consent after expiration of lease, or O allowing family/friends to occupy under ag that doesn’t comply w/ formality requirements = Proctor v Proctor)

Pb = for uncertain duration – is it really an estate ? Megarry & Wade suggest that T’s right against 3Ps comes from possession rather than estate granted by L

Question 13

Joint tenancies

Answer 13

= where 2 or more people hold leasehold together (must be 4 unities – see eg AG Securities v Vaughan)

Possible for 1 JT alone to serve notice to terminate joint periodic tenancy = Hammersmith and Fulham LBC v Monk

Question 14

Bruton tenancies

Answer 14

= granted by mere licensee out of his licence => no proprietary right but still a landlord-tenant relationship, at lease for purpose of s11 Landlord an Tenant Act 1985 (statutory duty of L to repair)

Authority = Bruton v London and Quadrant Housing Trust (2000)

Question 15

Lease ≠licence (3)

Answer 15

Lease is proprietary : estate in land => gives right to (exclusive) possession for duration of term, binding ag 3P incl L (and successors in title)
≠
Licence is a mere permission, which can be revoked => licensor may be under oblºnot to revoke (contract) but binding only on him, usually unenforceable against a successor

+ security of tenure (T has a lot more statutory protection than licensee)

+ statutory duties of landlord ≠licensors (eg duty to repair premises under s11 Landlord and Tenant Act 1985)

Question 16

2 essential elements of a lease

Answer 16

• exclusive possession
• determinate (certain) term, less than that of grantor

Doesn’t matter that parties intended to create / call it a licence, if ag meets requirements of a lease then it is a lease = HL in Street v Mountford

Question 17

Rent not necessary for there to be a lease

Answer 17

= LPA 1925, s205(1) : term of years absolute = “a term of years […] whether or not for a rent” + confirmed in Ashburn Anstalt v Arnold

/!\ Ashburn has been overruled by HL on other grounds, but CA has reaffirmed principle it is possible to have a lease without rent in Skipton Building Society v Clayton (1993)

Question 18

Exclusive possession - defº

Answer 18

= a right to exclude all others from the premises, including the landlord

/!\ an occupier who enjoys exclusive possession is not necessarily a tenant – needs to be granted exclusive possession for a fixed (or periodic) term at a rent

Question 19

Exclusive possession - Street v Mountford : tenant ≠lodger

Answer 19

Lodger : where landlord provides attendance / svc which require L / his servants to exercise unrestricted access to and use of the premises => “A lodger is entitled to live in the premises but cannot call the place his own”
≠
Tenant: has exclusive possession = rights of an O of land, ‘albeit temporarily and subject to certain restrictions’ => express reservation by L of limited rights to enter (to view state of premises / repair and maintain them) not a pb (as long as limited)

Question 20

Exclusive possession - Watt v Stewarts

Answer 20

CA drawing sharp distinction between legal exclusive possession on the one hand (= what T has: right to exclude all 3Ps incl L) and a merely personal right of exclusive occupation on the other hand (eg hotel guest : not expected to share the room but depends on hotel O to exclude the world)

Question 21

Possible to have a lease even though some written terms seem inconsistent with exclusive possession (3)

Answer 21

• Sir Terrence Etherton MR in Watts v Stewart (2018) : “whether an occupier is a licensee or a tenant is not necessarily determined by the labels or language used by the parties. It turns on the intention of the parties having regard to all the admissible evidence.”
• Landlords will often try to get around statutory protection of tenants => court must “have regard to the true rather than the apparent bargain made by the parties” = Aslan v Murphy; Duke v Wynne
• eg Street v Mountford : ag entitled ‘licence agreement’ + including declaration signed by M that she understood ag didn’t give her tenancy, court still found a lease bcs right to exclusive occ granted in exchange for weekly rent, determinable on 2w notice

Question 22

Eg of agreements resembling leases which effectively took effect as licences

Answer 22

• AG Securities v Vaughan : licence bcs no exclusive possession (shared w/ other Ts) and no JT bcs 4 unities lacking
• Camelot Guardian Management v Khoo : licence bcs no exclusive possession of ag (providing guardians in O’s absence) essential that possession could be returned to O at short notice)

Question 23

License resembling a lease - test for term (making ag a licence) to be disregarded

Answer 23

= ‘neither party genuinely intends the term to be enforceable’ (A) – mere lack of enforcement in fact is not enough = Camelot Guardian Management v Khoo

Question 24

Multiple ppl in occupation - 2 solutions

Answer 24

• joint lease granted to occupiers as joint tenants : single right of exclusive possession held by all JTs jointly, enforceable against the rest of the world (but not ag themselves) – each have access to whole of let premises
• each occupier gets indiv right to exclude others from a defined part of the shared premises (eg their room) => indiv leases btw L and each occupier + rights to share the common parts belonging to L

Question 25

Joint tenancies - the four unities

Answer 25

Ag Securities v Vaughan (1990) : joint lease only if all Os = joint tenants

=> four unities:
- possession : all JTs entitled to possession of the whole
- time : all JTs interests must start at the same time
- title : all JTs interests must be derived from the same transaction
- interest : all JTs interests must be of identical nature and duration

Question 26

Joint tenancies - liability

Answer 26

joint rights and obligations : each is jointly and severally (= individually) liable for the whole – see Mikeover Ltd v Brady (1989)

Question 27

Exclusive possession alone not enough to create a tenancy

Answer 27

“to constitute a tenancy the occupier must be granted exclusive possession for a fixed or periodic term certain in consideration of a premium or periodical payments” (Lord Templeman in Street v Mountford)

+ where no intention to create legal relations, may not be a lease
=> eg Errington v Errington : young married couple occupying house belonging to father (under ag it would become theirs if repaid mortgage)

Question 28

Certainty of term - duration must be fixed

Answer 28

= Lace v Chatler (1944): purported lease ‘for the duration of the war’ could not take effect as a legal estate bcs not a grant for a term, since exact date of end unknown

Question 29

Certainty of term - lease must take effect

Answer 29

21y after date of instrument purporting to create it, or else will be void (at law) = s149(3) LPA 1925

Question 30

Certainty of term - perpetual renewal

Answer 30

grant of a lease (or sublease) w/ a covenant or obligation for perpetual renewal tales effect as a ‘demise’ for a term of 2000y, or in the case of a sublease for a term of a duration of 1d less than the term of out of which it is granted = §5 sch15 LPA 1922

Question 31

Certainty of term - lease purportedly created for an uncertain term is …

Answer 31

… void = Prudential Assurance Co v Panalpina

=> takes effect as an implied tenancy based on the tenant’s possession and payment of rent

Question 32

Certainty of term - tenancy failing for uncertainty of her bcs L can’t serve notice unless circumstances arise, which would’ve been

Answer 32

a tenancy for life before 1926 can take effect as a 90y lease under s149 LPA 1925 = Berrisford v Mexfield Housing

/!\ except if contrary to the intention of the parties that T should enjoy the premises for life = Southward Housing Co-operative Ltd v Walker [2016]

Question 33

Term must be less than that of the grantor

Answer 33

if leaseholder tried to grant lease as long as his own, grant operates as assignment of his leasehold (doesn’t retain reversion)

Question 34

Possible to grant concurrent leases (to 2 ppl which overlap in time)

Answer 34

2nd lease to be granted will be a leasehold reversion : if F grants 21y lease to T1, then 99y lease to T2, T2’s lease cannot take immediate effect in possession -> takes effect out of F’s reversion = T2 entitled to rent and profits from T1’s lease, and to take possession when it ends

Question 35

Express grant of a legal lease : formalities

Answer 35

leases for 3y or less which satisfy s54(2) LPA 1925 : no formality
=> s54(2) : lease must (i) be for a term of 3y or less, (ii) take effect in possession, (iii) be at mk rent, (iv) not require payment of premium / fine

leases that do not satisfy these requirements and that have a term of less than 7y : deed only
= s52 LPA 1925, no registration

leases for a term of more than 7y : deed + registeration
= s52 LPA 1925 (conveyance of legal estate in land) + s27 LRA 2002 if RL (disposition required to be completed by registration) or s4 LRA 2002 if URL (disposition triggering requirement of first registration)

Question 36

Equitable leases - created in 2 sitº

Answer 36

• where parties make ag (contract) but never proceed to formal grant
  /!\ contract must be in writing = comply w/ LPMPA 1989 and specifically enforceable)
• where parties make attempt to make formal grant but fail to comply w/ formalities for legal lease
  => equity can come to the rescue if defective grant was for value

Question 37

Equitable lease can prevail over implied legal lease

Answer 37

= Walsh v Lonsdale

L purported to grant lease of mill to T for 7y by written ag (which was not a deed), rent to vary acc to productivity of mill, T to pay annually (in advance if required by L) – T took possession and paid rent every 6m for 1,5y, then L demanded payment in advance for next year under terms of ag, T refused

positions:
- at law : T had implied legal lease arising from possession of the property and payment of rent – annual periodic tenancy – since rent paid and accepted in arrears, implied term that rent should be paid like that
- in equity: ag for 7y lease w/ rent payable in advance – if party seeking to enforce it (L) had done nothing wrong, would’ve been specifically enforced in equity, and T had equitable 7y lease

=> CA held in favour of L position in equity prevails (bcs Judiciature Acts 1873 and 1875)  T had equitable lease under written ag (specifically enforceable contract)

Question 38

Equitable lease almost as good as legal lease (5)

Answer 38

• normally, can be converted into legal lease by order for specific performance
• but equitable remedies are discretionary => not available if C has ‘dirty hands’
• legal estates bind the world, vs equitable lease vulnerable to BFPFVWN
• Equitable tenant is not a purchaser for value of a legal estate => no s29 LRA 2002 protection
• a contract is not a conveyance : LPA s62 = conveyance automatically carries certain rights enjoyed in connection with the land – grant of a legal lease within this section, but equitable lease by specifically enforceable contract does not, so doesn’t carry benefits = Borman v Griffith (1930)

Question 39

Implied grant of a legal lease

Answer 39

Leases which can be granted at law without formality (<3y complying w/ s54(2) LPA 1925) can be implied from conduct of parties

=> possible to have implied periodic tenancies and tenancies by sufferance

Question 40

Implied periodic tenancy

Answer 40

= where a person is in possession of land w/ O’s consent and rent accepted periodically
- CL used to presume existence of a periodic tenancy = Martin v Smith (1874)
- Now, a lot of statutory protection of tenants: no longer presumption, court must consider intention of the parties – which can be inferred from the circumstances of the case = Javad v Mohammed Aquil => payment of rent is only one of those circumstances, albeit an important one

general rule = type of periodic tenancy arising by implication will depend on period for which the rent is said to be due rather than frequency at which it is paid (eg rent stated as annual sum but paid in monthly instalments gives rise to yearly tenancy)

Question 41

Tenancies by sufferance

Answer 41

= where T originally had valid tenancy, and continued to occupy property after it expired – without L’s consent (would be tenancy as will) or protest (would be trespass)

at CL, T at sufferance was in v precarious position but now protected (L’s rights restricted) by s6 Criminal Law Act 1977 and s3 Protection from Eviction Act 1977 (for residential accom

Question 42

Tenancies by estoppel - 2 types of estoppel

Answer 42

• Estoppel by grant = where L has no legal estate at all in the land at the date of the purported grant – if L had lesser estate than what he purported to grant, whole estate passes to grantee
• Estoppel by representation = estops grantor who has made specific representation abt their title from denying they have the estate represented  fact that L has lesser estate does not prevent estoppel from operating so tenancy for the full period promised comes into existence

Question 43

Tenancies by estoppel (3)

Answer 43

General CL principle: a grantor is precluded from disputing the validity and effect of the grant = First National Bank v Thompson (1996) (mortgage case but laid down general principle)

unless a superior title intervenes, a tenancy by estoppel is generally as effective and binding as any other lease = Gouldsworth v Knights (1843)

Possible to ‘feed the estoppel’ : when L obtains legal title to the land during continuance of the lease by estoppel, LBE becomes a full legal lease = Rawlin’s Case (1587)