Leases Flashcards
King v David Allen [1916] 2 AC 54
contractual licence vs leases
Held: the licence was not binding on the new tenant
Principe: Contractual licences are not proprietary in nature i.e. they not binding on successors in title = Leases are enforceable against third parties / a licence is a personal rights enforceable against the person who granted them
Question arose as to whether a licence to place an advertisement on the walls of a building given by the preceding tenant bound the new tenant
Street v Mountford (read!)
lease - essential requirements
On exclusive possession:
‘An occupier of residential accommodation at a rent for a term is either a lodger or a tenant. The occupier is a lodger if the landlord provides attendance or services which require the landlord or 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…If on the other hand residential accommodation is granted for a term at a rent with exclusive possession, the landlord providing neither attendance nor services, the grant is a tenancy; any express reservation to the landlord of limited rights to enter and view the state of the premises and to repair and maintain the premises only serves to emphasise the fact that the grantee is entitled to exclusive possession ~ and is a tenant.’
On sham clauses:
The court will ‘be astute to detect and frustrate sham devices and artificial transactions whose only object is to disguise the grant of a tenancy’ (per Lord Templeman).
Held: it was a lease. The use of the term ‘licence’ is unconclusive. Calling a licence an agreement that has the characteristics of a lease would blur the lines. Ths substance of the agreement that matters more than the title = looking at the csq of what ids created . + Street v M sets out the three elements of the lease.
Lord Templeman (leading judge in equity)
> “there is no doubt that the traditional distinction between a tenancy and a licence of land lay in thegrant of land for a term at a rent with exclusive possession.” (…)“If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancyand the parties cannot alter the effect of the agreement by insisting that they only created a licence. The manufacture of a five pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade.”
> Words alone do not suffice. Parties cannot turn a tenancy into a licence merely by calling it one.
Facts: Mr Street (a lawyer), by an “occupancy” agreement which stated that it was a licence, granted Mrs Mountford (a layperson) the right to occupy rooms 5 & 6 of the property 5 St Clements Gardens in Boscombe for a rent of 37.00 per week. The question for the court was whether the agreement was, as expressed in the agreement, a licence, or whether it was in fact a lease. The terms of the agreement included that Mr Street could enter the rooms at any time to inspect , to read the meter, to carryout maintenance and install or replace furniture or for any other reasonable purpose. No one other than Mrs Mountford could occupy or sleep in the room without permission. No children or pets were allowed. The licence could be terminated by 14 days written notice. The agreement also stated the that the licence did not and was not intended to give a tenancy and conferred no protection from the Rent Acts.
Pretoria Energy Co v Blankney Estates Ltd [2023] EWCA Civ 482
certainty of terms
“The time from which the term of a lease is to begin is … a term that the law regards as essential to the creation of a binding lease for a contract.’
Prudential Assurance Co. Ltd v London Residuary Body [1992] 2 AC 386
certainty of term
The practical importance of the decision in Prudential has been limited by the later Supreme Court decision in Berrisford Housing Co-operative v Mexfield [2011] UKSC 52. In many situations, a lease with an uncertain term will no longer be invalidated by Prudential; instead, it will be treated as a lease for life and thus as a 90-year lease under the Berrisford analysis.
Nevertheless, since Berrisford does not overrule Prudential, and the precise scope of the Berrisford analysis remains uncertain, the case retains a residual significance in situations in which the Berrisford analysis does not apply. These include cases such as Prudential itself, in which the tenant is a company, not a natural person, and cannot have been granted a lease for life. If Berrisford is confined to cases in which the parties actually intended a lease for life, Prudential remains the leading authority in all other situations.
The House of Lords held that the 1930 lease was void because it was for an uncertain term. When a tenant went into possession under a void lease and began to pay a yearly rent, this created a yearly periodic tenancy, and this was what Prudential Assurance had acquired. It was inherent in the nature of a periodic tenancy that both landlord and tenant had the power to determine it at the end of each period, provided that they gave adequate notice. Any term fettering the exercise of this power was void because it was inconsistent with the requirement for certainty of term.
nb: BW is used in very specific circumstances. If commercial scenario + does not say for life - unlikely to be applied
In 1930, London County Council purchased freehold title to a strip of land from one Nathan, who retained his freehold title to certain shops next to that strip. The council then agreed to grant possession of this strip back to Nathan at a rent of £30 per annum, on terms entitling him to build ‘temporary one-storey shops’ on it. Clause 6 of the agreement provided that the tenancy was to continue ‘until the said land is required by the council for the purposes of the widening of Walworth Road’ and that, when the council did require the land for this purpose, Nathan would remove the temporary structures and clear the land.
The council subsequently abandoned its plans to widen the road. Its title to the strip passed to London Residuary Body, a body with no power to carry out roadworks. Nathan’s leasehold title passed to the claimant, Prudential Assurance Co. Ltd, which continued to pay the 1930 rent of £30 per annum. Valuers acting for both parties agreed that a market rent for the strip at the time of the litigation, in 1992, would be £10,000 per annum.
The London Residuary Body served Prudential with notice to quit, purporting to determine the tenancy. Prudential applied to the court for a declaration that the tenancy could not be determined until the land was required for the purposes of widening the road.
At first instance, Millett J refused to grant the declaration. He held that, as a matter of construction, clause 6 of the agreement was binding only while the landlord was a body possessed of road-widening powers. It did not apply to fetter the London Residuary Body’s right to terminate the lease by notice.
The Court of Appeal overturned this decision.
The claimant appealed to the House of Lords.
Hammersmith v Monk [1992] 1 AC 478
periodic tenancies - certainty of term
PT Ended by serving “notice to quit”. Serving notice to quit prevents the lease from automatically renewing for the next period:
H was the local authority and landlord
M and his partner rented property from H under a joint weekly tenancy
The partner left the flat and H informed her that she could obtain alternative accommodation if she terminated the periodic tenancy
The partner gave the requisite 4 week notice to terminate and H sought possession against M
H’s claim: M occupied under a succession of weekly tenancies and each arose only due to M’s and partner’s failure to give notice to quit
Javad v Aqil [1991] 1 WLR 100
Implied periodic tenancy - certainty of term
D had a mere tenancy at will
NB: implied periodic tenancies = no express agreement as to the term of the tenancy
Period is inferred from rent payments. No rent = no implied periodic tenancy.
No implied periodic tenancy if parties have contrary intentions (objectively ascertained):
The landlord of business premises (C) allowed the tenant (D) into occupation on payment in advance for 3 months expressed in a receipt
The parties negotiated on the lease but agreement was never reached
C sought possession, arguing that D was in occupation as tenant at will
Berrisford v Mexfield [2011] UKSC 52
the Berrisford Workaround - certainty of term
Held: The appeal was allowed. The court ruled in favour of Mexfield that there was a lease as Law of Property Act 1925 converts a lease for life into a lease for 90 years . This lease was determinable in the event of her death or when one of the cl. 6 conditions was met.The Supreme Court held that the effect of the agreement had been to create a 90-year lease in favour of Ms Berrisford, determinable in the event of her death or in the event that one of the clause 6 conditions was met. Since none of these conditions had been met and Ms Berrisford was still alive, the lease had not been determined and Mexfield was not entitled to possession.
Issue: Did she have a lease???
Mexfield Housing Co-operative Ltd was a cooperative housing association that owned several residential properties. Mexfield purchased mortgaged homes from owners who had had difficulties keeping up with mortgage payments and leased them back to the original owners. Ms Berrisford was one of Mexfield’s tenants. She had sold her home to Mexfield and leased it back in 1993.
Under the terms of the lease, Ms Berrisford took the premises ‘from month to month until determined as provided in this Agreement’. Clause 5 provided that Ms Berrisford could determine the agreement by giving Mexfield one month’s notice in writing. Clause 6 provided that Mexfield could determine the lease by the exercise of a right of re-entry, which could be exercised ‘ONLY’ in the circumstances defined in that clause. These included non-payment of rent for 21 days or breach of other leasehold covenants.
In February 2008, Mexfield served a one-month notice to quit on Ms Berrisford. At the end of the month, it brought proceedings in the county court, seeking an order for possession. Ms Berrisford had fallen into arrears on payment of rent for a few days, but Mexfield did not rely on this fact in giving her notice to quit, since it was likely that she would have obtained relief against forfeiture. Instead, it argued that it was free to determine the tenancy by giving one month’s notice to quit, whether or not the conditions in clause 6 of the agreement were met.
Issue: if not joint tenancy ⇒ no exclusive possession ⇒ no lease
Ashburn Anstalt v Arnold [1989] Ch 1
rent
C’s claim to possession denied
principle: A contract does not have to require the payment of rent to amount to a lease
Contractual licences are non-proprietary personal rights
Mere notice of a licence to property via a ‘subject to’ clause in a contract of sale for the property is not enough to impose a constructive trust on a purchaser
Arnold & Co (D) was the tenant to a shop and it entered into agreement for the sale of its lease to Matlodge
Under clause 5, D was entitled to stay in the property as a licensee without payment of rent for seven months save at one quarter’s notice by C
Cavendish bought the freehold of the shop as well as the lease from Matlodge, before selling the both freehold and lease to Legal and Assurance, who then sold both freehold and lease to Ashburn Anstalt (C)
Under the terms of the sale contract, C took its freehold subject to the contractual rights of D against the original owner
C sought to claim possession
D argued in defence that it had a right to possession on the following grounds:
it had a lease to the shop that was created under clause 5, or
alternatively, it had a licence to the shop which would be binding on C
Crancour v Da Silvaesa (1986) EWCA Civ 1
exclusive possession - provision of services
“As to the denial in the agreement signed by these appellants of the right in them as occupiers to use the room from 10.30 to noon, I agree that this clause has the appearance of one which might well be ‘sham’ in the sense that the landlord might be shown not to have intended the term to be a true statement of the nature of the occupation to be enjoyed by the licensees. I do not regard it as a clause which must obviously and unarguably be of that nature in all circumstances but, in this case, it appears never to have been enforced and it is astonishingly extreme in apparently extending to the licensee’s property as well as his personal presence. The court might be persuaded on the facts that the landlord never intended that clause in the terms used to describe the nature of the possession intended to be enjoyed by the licensee.”
= although the particular term was a sham, the overall ccl was that they had a licence
see also: Marchant v Charters [1977] 1 WLR 1181
facts
A bedsitting room was occupied on terms that the landlord cleaned the rooms daily and provided clean linen each week.
Held:
The occupier was a licensee and not a tenant.
Held: The agreements were licences not leases.
> “The agreement does require the landlord to provide attendance and services which require the landlord and his servants to exercise unrestricted access to and use of the room. Possession and control of the room are reserved by clause 2 of the agreement to the landlord for the purposes of discharging the obligation to provide attendance and services and that shows, in my judgment, that exclusive possession was not given.”
> Gibson LJ
Facts: occupants of individual furnished rooms within the same house owned by Mr Da Silvaesa. The occupation arose from agreements described as licenses. Through these licences, Mr Silvaesa retained an absolute right to enter at any time and was to provide services in the form of cleaning, rubbish collection, provision and laundering of bed linen + reserved the right to move the occupiers from one room to another. The occupants sought to argue that the agreements created a tenancy.
Aslan v Murphy
exclusive possession - keys
Held:
- there was a lease
- the other provisios were shams/pretences
- the retention if keys does not automatically neglect exclusive possession
> ‘Provisions as to keys, if not a pretence (which they often are), do not have any magic in themselves … what matters is what underlies the provisions as to keys. Why does the owner want a key?’Per Lord Donaldson at 773
Facts: Mr Murphy occupied a basement room owned by Mr Aslan. It was a small room measuring 4ft 3in by 12ft 6 in. The agreement stated that the licensor was not willing to grant the licensee exclusive possession of any part of the room and that the licensor may permit others to use the room. The rent was referred to as a licence fee. The agreement also reserved Mr Aslan the right to retain keys. Mr Aslan was to provide services in the form of cleaning the room, rubbish collection, provision of and laundering of bed linen. However, in practice no others were permitted to enter the room and no services were actually provided.
Hunts Refuse Disposals Ltd v Norfolk Environmental Waste Services Ltd [1996] 1 EGLR 16
control and exclsuive control
= held that NEWS had not conferred a lease. The agreement limited the use of the occupier on the land (time, use…) thus they could only be a licensee as no exclusive possession had been conferred.
“The deeds did not grant … full liberty to use the site at all times and for any purpose which it might to use the site at all times and for any purpose for which it might be suitable. Rather it granted the exclusive licence and full liberty to use the site for depositing waste.
,,,, I agree with Hutchison LJ … that the deeds were licences and not leases for they did not confer the right to exclusive possession on the grantee”. Morritt LJ
Camelot Property Management v Roynon
multiple occupancy and exclusive possession
When distinguishing a licence from a tenancy the court is required to look at the substance of the arrangement and not merely the label used. A key feature of a tenancy is that the occupier has been given exclusive possession. On the facts the court concluded that Mr Roynon had been granted exclusive possession of two rooms and was, therefore, a tenant of those areas (he was not held to be a tenant of the shared communal facilities)
= affirmed that it is possible to have a lease over the bedroom and a license over the common parts.
This case concerned a former care home owned by Bristol City Council. When the property became empty the council engaged the services of Camelot Property Management Limited (CPML) to install residents – known as guardians – in the building to protect against vandalism and unauthorised use.
On 23 January 2014 Camelot Guardian Management Limited (CGML) entered into an agreement with Greg Roynon (the Agreement) allowing Mr Roynon to occupy two rooms in the property and to have shared use of communal living, kitchen and bathroom facilities. The Agreement stated in clear terms that it was a licence and not a tenancy.
In 2016 notice to quit was served on Mr Roynon. He refused to leave and CPML and CGML brought possession proceedings against him.
conjoined case with Antoniades v Villiers[1990] 1 AC 417
AG Securities v Vaughan
multiple occupancy and exclusive occupation
-
Vaughanclarifies how and when a lease can exist in situations of shared occupation.
- either be a joint tenancy of a single lease of the whole premises, held by all of the occupiers,
- or that each occupier must be a separate tenant of a specific part of the land, from which that occupier is entitled to exclude the others.
They held that the defendants inVaughanwere licensees, not tenants: the written agreements between the parties genuinely reflected their true intentions and were inconsistent with the grant of a lease. They were therefore licensees and not tenants.
Reasoning: InVaughan, the written agreements between AG Securities and the different defendants were found to be genuinely independent of each other. Their aim, according to Lord Bridge, was ‘to provide accommodation for a shifting population of individuals who were genuinely prepared to share the flat with others introduced from time to time who would, at least initially, be strangers to them’. These agreements were inconsistent with a finding that the defendants were joint tenants of a single lease of the whole flat, because they had been concluded at different times, had granted rights to occupation over different periods, and had imposed separate obligations to pay different amounts on each occupier. None of the defendants had argued that the agreements granted them individual leases of specific parts of the flat. As a result, the defendants had no right to exclusive possession, either jointly or separately, since they had no right to exclude from the flat, or any part of it, each other or anyone else chosen by AG Securities.
Facts: AG Securities was a leaseholder of a block of residential flats and had entered into 4 separate agreements with the four defendants—Vaughan, Lyons, Russell, and Cook—to allow them occupation of one flat. Not same rent, not same terms. Each agreement purported to grant to the occupier, described as the ‘licensee’, the right to use the flat ‘in common with others who have or may from time to time be granted the like right … but without the right to exclusive possession of any part’ of the flat. The defendants had all signed the agreements and moved in at different times, during the period 1982–85. They had also all agreed to pay different amounts per month + ‘Insertion of new person clause’
Procedure: In 1985, AG Securities served notices to quit on all four defendants.
Antoniades v Villiers[1990] 1 AC 417
Antoniadesprovides guidance on when the courts, in construing whether an agreement creates a lease or licence, will ignore the provisions of any written agreement between the parties ⇒ express terms inconsistent with any grant of exclusive possession were not decisive. Where the surrounding context and the behaviour of the parties showed that they had no intention of enforcing clauses inconsistent with a grant of exclusive possession, these clauses would be ignored as ‘shams’ or ‘pretences’, designed to avoid the Rent Acts. However, as the recent case ofCamelot Guardian Management Ltd v Khoo[2018] EWHC 2296 makes clear, the mere fact that a term in the contract has never been enforced does not make it a sham. What matters is whether it isintended*to be enforceable in some circumstances envisaged by the parties, an issue that turns on the context and purpose of the agreement.
InAntoniades, their Lordships held that the written agreements between Mr Antoniades and the two defendants did not reflect their true intentions. The fact that the agreements were signed on the same day and that Mr Antoniades knew of the relationship between the defendants meant that the agreements had to be read together as a single contract. Terms in the agreements that seemed inconsistent with a grant of exclusive possession represented a ‘pretence’ (perLord Templeman) or ‘sham’ (perLord Oliver) designed to avoid the Rent Acts rather than to reflect the actual intentions of the parties. Clause 16, which provided that Mr Antoniades could move into the property himself or introduce any other occupier if he so wished, was held to be irrelevant for two reasons.
- Lord Templeman held that its purported effect was not to prevent the grant of exclusive possession, but to reserve a power for the landlord to terminate the right to exclusive possession at will. The reservation of such a power by a landlord was inconsistent with the Rent Acts and void.
- As both Lords Templeman and Oliver held, the clause was not part of the actual agreement between the parties because it was a sham or pretence. The nature of the flat and of the relationship between the defendants made it unrealistic to expect them to share with a stranger or their landlord. The parties ‘never intended that clause 16 should operate’; ‘[I]t was mere dressing up in an endeavour to clothe the agreement with a legal character which it would not otherwise have possessed.’
Mr Antoniades was the freehold owner of a house divided into flats. In 1985, he entered into an agreement with the two defendants, Mr Villiers and Miss Bridger, to allow them to occupy the top flat. The defendants intended to occupy the flat as a couple. They each signed separate agreements, in identical terms, on the same day (just an issue of title). These agreements declared that Mr Antoniades was not willing to grant exclusive possession to the occupier, described as the ‘licensee’, and stated (clause 16) that the licensee accepted the ‘use’ of the rooms ‘notwithstanding that such use be in common with the licensor and such other licensees or invitees as the licensor may permit from time to time to use the said rooms’. The flat consisted of a bedroom, a bedroom/sitting room, a kitchen, and a bathroom. Mr Antoniades never attempted to occupy any part of the premises himself or to introduce another person into the flat.
Procedure: In 1986, Mr Antoniades brought an action seeking an order for possession against the defendants.
Southward Housing Co-Operative Ltd v Walker [2016] EWHC 1615
Berrisford Workaround - certainty of term
Why was it distinguished from Berrisford: The agreement is repeatedly expressed as determinable by a ‘notice to quit’ which is a hallmark of a periodic tenancy, in contrast, the tenancy in theMexfieldcase had a conventionally-drafted right of re-entry, which is consistent with a fixed term
Held: it was a contractual license. The terms allowing notice to quit show that it was not the intention of the parties to grant D a life tenancy.
Added a requirement to the Berrisford workaround ⇒ must be consistent with the parties’ intentions.
Facts: The cooperative (C) granted to D a weekly tenancy
Tenancy provided that:
* Rent was payable weekly
*C would only terminate the tenancy with notice on specified grounds which included non-payment of rent
*Notice to quit must be given one month before termination
D fell into arrears and C served notice to quit and then sought possession order. D argued that pursuant toMexfield, although the agreement was for uncertain term, at common law it was to be treated as a tenancy for life and under s149(6) LPA1925 it took effect as a 90-year lease, which therefore cannot by notice and was not otherwise forfeit.
