Leasehold Flashcards
Analysis in Bruton v London Quadrant Housing Trust:
Lease: contractual relationship. Often leases are also legal leases that bind (term of years absolute), but only if grantor had legal estate out of which to grant it
Formalities for agreement to grant lease:
Lease 3+: must be valid land contract -> s 1(2) LP(MP)A 1989 compliant
Lease 3-: falls into exception under s 2(5)(a) LP(MP)A 1989: may arise orally
Must be capable of specific performance (Coatsworth v Johnson)
Consequence of valid agreement to grant legal lease (applies to all legal estates):
Equitable interest transferred to grantee (maxim: equity views as done that which ought to be done) so equitable lease created (Walsh v Lonsdale)
Equitable lease = type of estate contract
Formalities for grant of legal lease 3+:
Must be by deed (s 52 LPA 1925) so must comply with s 1(2) LP(MP)A 1989
Legal lease 7+: registered:
- over unreg land: s 4(1)(c) LRA 2002. Failure within 2 months means legal title reverts.
- over reg land: s 27(2)(b) LRA 2002. Failure means legal title never passes.
Formalities for grant of legal lease 3-:
No deed required as falls under exception in s 52(2)(d) and s 54(2) LPA 1925 provided:
- takes effect in possession (s 205(1)(xix): includes receipt of rent/profits)
- at best rent (market rent (Fitzkriston v Panayi))
Position in law when fail to meet appropriate formalities to create legal lease:
Intended legal lease is void.
Exception: implied periodic tenancy
At law, if fail to meet formalities for granting legal lease, may be legal lease if periodic tenancy implied:
Prudential Assurance v London Residuary Body: if tenant takes possession and starts paying rent by reference to a period, periodic tenancy may be implied.
Falls under s 52(2)(d) and s 54(2) LPA 1925 so no need for deed as takes effect in possession at best rent
Position in equity when fail to meet formalities required to grant legal lease:
May be viewed as agreement to create lease -> equitable lease if meets formalities required for agreement to grant a lease
Where conflict exists between law and equity:
Equity prevails (Walsh v Lonsdale)
General rule that can’t grant more than you have yourself is undermined by:
Bruton v London Quadrant Housing Trust: trust had licence from council of block of flats for providing short term accommodation to homeless. Trust granted licence to B in return for weekly licence fee. HL held B had exclusive possession for a term at a rent so was lease.
Inferior to freehold because:
Endures for smaller slice of time
Possessory rights more limited
3 essential characteristics of lease:
Lord Templeman in Street v Mountford:
Certainty of term
Exclusive possession
At a rent
Rent not really essential for lease
S 205(1)(xxvii) LPA 1925 Ashburn Anstalt v Arnold
Rent need not be in monetary form, provided is capable of being rendered certain
Bostock v Bryant: pay fluctuating utility bills not certain
Essentials for certainty of term:
Fixed and certain max duration: Lace v Chantler (duration of WWII not certain) (may be resolved by implied periodic tenancy: Prudential Assurance)
Start date (if not specified: assumed commences on tenant taking possession)
Period of term implied when periodic tenancy implied calculated on basis rent itself calculated, irrespective of how actually paid
Martin v Smith
EXCEPTION: where lease granted to individual: uncertain term is lease for life so 90 years (s 149(6) LPA 1925) (Mexfield Housing v Berrisford)
Finding of exclusive possession does not necessitate finding of lease:
Facchini exceptions (Facchini v Bryson)
Facchini exceptions (when exclusive possession does not mean lease)
- friendship/generosity: no intention to create legal relations (Marcroft Wagons v Smith)
- family relationships (David v LB Lewisham) (not automatic (Nunn v Dalrymple))
- services based on employment (Norris v Checkersfield)
- lodger: provision of regular services (Marchant v Charters) (not when smoke screen (Aslan v Murphy))
Why do landlords try disguising leases as licences and how?
To prevent tenants enjoying stat benefits
By purporting to exclude exclusive possession
Must go beyond form and look at substance (what rights and obligations were conferred) when determining whether lease or licence
Street v Mountford
Non-exhaustive list of considerations when determining whether lease or licence:
Stribling v Wickham:
- intended/actual mode of occupation
- nature and extent of accommodation provided
- relationship between prospective occupants
- course of negotiations
Courts eagerness to detect sham clauses purporting to exclude exclusive possession to avoid granting lease criticised:
Ignores parties’ subjective intentions: freedom of contract
Residential: less weight to argument when people desperate for accommodation (AG Securities v Vaughan)
Commercial: equal bargaining power: more likely to give effect to parties intentions (National Car Parks v Trinity Developments)
Antoniades v Villiers
Clause purporting to exclude exclusive possession was sham:
- occupants quasi matrimonial couple clearly intending to occupy as family home
- property too small
- max no of people who can be invited to share not specified
- clause never actually exercised
AG Securities v Vaughan
Clause excluding exclusive possession not sham:
- occupants strangers who arrived willing to share
- each signed separate agreement that 3 other people could be invited to share and was 4 bed house so realistic
- clause actually exercised
Identity of landlord used to be relevant in determining whether lease or licence:
Westminster CC v Basson: suggested certain public landlords can grant licence where other landlords only could grant lease if necessary to exclude exclusive possession to carry out public duties.
Bruton v London Quadrant Housing Trust said identity no longer relevant. May still be relevant in deciding whether was genuine response to exceptional circumstances
Individual leases with multiple occupation:
Each tenant entitled to exclusive possession of defined area, with licence to share common parts (eg potential lease over bedroom recognised obiter in AG Securities v Vaughan)
Joint tenancy:
Together seen as single entity with exclusive possession of whole.
Four unities must be present.
Four unities:
Possession: all entitled to possess whole
Title: all obtain interest from same doc (court will recognise when this is just smoke screen: Antionades v Villiers)
Time: all obtain interest at same time
Interest: all possess same rights and obligations for which jointly liable
Types of lease:
Fixed term tenancy
Periodic tenancy
Tenancy at will: personal relationship, can terminate at will
Tenancy at sufferance: tenant remains in possession after expiry of lease neither with nor without landlords consent
Estoppel tenancy
Termination of leases: 6 methods depending on nature of lease:
Expiry of term
Notice
Surrender: landlord and tenant agree tenant will give up lease
Merger: tenant obtains freehold
Repudiatory breach
Forfeiture: remedy terminating lease where tenant in breach of covenant
Terminating a lease by notice to quit:
Applies to periodic tenancy.
Notice period generally equates with period of lease BUT:
- yearly lease: 6 months notice
- dwelling house: at least 4 weeks notice (Protection From Eviction Act 1977)
Joint periodic tenancy: notice to quit served by 1 joint tenant is effective on all (Hammersmith and Fulham LBC v Monk)
Terminating a lease by accepting repudiatory breach:
Landlord breaches obligations and tenant accepts breach (Hussein v Mehlman)
Forfeiture generally only available where forfeiture clause. Exception:
Equitable leases: forfeiture clause implied
Landlord loses right to forfeit lease where:
Waived right:
- actual or inputed knowledge of breach, and
- unequivocal act recognising continuation of lease (eg accepting rent (Belgravia v Woolgar)
When must court order be obtained for forfeiting lease:
Residential property (or mixed use (Patel v Pirabakaran) (s 2 Protection From Eviction Act 1977)
No need if no one lawfully residing there
When deciding whether to issue possession order to landlord seeking to forfeit lease, must consider whether proportionate to evict tenant as interferes with art 8 right
Manchester CC v Pinnock
