Leasehold

Question 1

Analysis in Bruton v London Quadrant Housing Trust:

Answer 1

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

Question 2

Formalities for agreement to grant lease:

Answer 2

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)

Question 3

Consequence of valid agreement to grant legal lease (applies to all legal estates):

Answer 3

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

Question 4

Formalities for grant of legal lease 3+:

Answer 4

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.

Question 5

Formalities for grant of legal lease 3-:

Answer 5

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))

Question 6

Position in law when fail to meet appropriate formalities to create legal lease:

Answer 6

Intended legal lease is void.

Exception: implied periodic tenancy

Question 7

At law, if fail to meet formalities for granting legal lease, may be legal lease if periodic tenancy implied:

Answer 7

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

Question 8

Position in equity when fail to meet formalities required to grant legal lease:

Answer 8

May be viewed as agreement to create lease -> equitable lease if meets formalities required for agreement to grant a lease

Question 9

Where conflict exists between law and equity:

Answer 9

Equity prevails (Walsh v Lonsdale)

Question 10

General rule that can’t grant more than you have yourself is undermined by:

Answer 10

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.

Question 11

Inferior to freehold because:

Answer 11

Endures for smaller slice of time

Possessory rights more limited

Question 12

3 essential characteristics of lease:

Answer 12

Lord Templeman in Street v Mountford:
Certainty of term
Exclusive possession
At a rent

Question 13

Rent not really essential for lease

Answer 13

S 205(1)(xxvii) LPA 1925
Ashburn Anstalt v Arnold

Question 14

Rent need not be in monetary form, provided is capable of being rendered certain

Answer 14

Bostock v Bryant: pay fluctuating utility bills not certain

Question 15

Essentials for certainty of term:

Answer 15

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)

Question 16

Period of term implied when periodic tenancy implied calculated on basis rent itself calculated, irrespective of how actually paid

Answer 16

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)

Question 17

Finding of exclusive possession does not necessitate finding of lease:

Answer 17

Facchini exceptions (Facchini v Bryson)

Question 18

Facchini exceptions (when exclusive possession does not mean lease)

Answer 18

• 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))

Question 19

Why do landlords try disguising leases as licences and how?

Answer 19

To prevent tenants enjoying stat benefits

By purporting to exclude exclusive possession

Question 20

Must go beyond form and look at substance (what rights and obligations were conferred) when determining whether lease or licence

Answer 20

Street v Mountford

Question 21

Non-exhaustive list of considerations when determining whether lease or licence:

Answer 21

Stribling v Wickham:

• intended/actual mode of occupation
• nature and extent of accommodation provided
• relationship between prospective occupants
• course of negotiations

Question 22

Courts eagerness to detect sham clauses purporting to exclude exclusive possession to avoid granting lease criticised:

Answer 22

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)

Question 23

Antoniades v Villiers

Answer 23

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

Question 24

AG Securities v Vaughan

Answer 24

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

Question 25

Identity of landlord used to be relevant in determining whether lease or licence:

Answer 25

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

Question 26

Individual leases with multiple occupation:

Answer 26

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)

Question 27

Joint tenancy:

Answer 27

Together seen as single entity with exclusive possession of whole.

Four unities must be present.

Question 28

Four unities:

Answer 28

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

Question 29

Types of lease:

Answer 29

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

Question 30

Termination of leases: 6 methods depending on nature of lease:

Answer 30

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

Question 31

Terminating a lease by notice to quit:

Answer 31

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)

Question 32

Terminating a lease by accepting repudiatory breach:

Answer 32

Landlord breaches obligations and tenant accepts breach (Hussein v Mehlman)

Question 33

Forfeiture generally only available where forfeiture clause. Exception:

Answer 33

Equitable leases: forfeiture clause implied

Question 34

Landlord loses right to forfeit lease where:

Answer 34

Waived right:

• actual or inputed knowledge of breach, and
• unequivocal act recognising continuation of lease (eg accepting rent (Belgravia v Woolgar)

Question 35

When must court order be obtained for forfeiting lease:

Answer 35

Residential property (or mixed use (Patel v Pirabakaran) (s 2 Protection From Eviction Act 1977)

No need if no one lawfully residing there

Question 36

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

Answer 36

Manchester CC v Pinnock