Leases And Licences Flashcards
What is a lease
A contract which is capable of being a legal estate in land
S1 Law of Property Act 1925
Person gives legal right for another to use land or property
Fixed-term lease/tenancy
Expires without need for notice
Term can be any length
Periodic lease/tenancy
Terminated by notice
Continued indefinitely from one period to the next
Have to give at least one full periods notice to terminate
- exception is annual periodic tenancy, notice would be 6 months
- exception is residential property on weekly periodic tenancy, minimum 4 weeks notice
Basic requirements for a lease
- Exclusive possession
- Determinate term
- Less than that held by grantor
- Payment of rent
Exclusive possession
Street v Mountford
People can only enter property with tenants permission
Don’t have this then you don’t have a lease
Determinate term
Lace v Chantler
Certainty of duration
Term must be for less than that held by grantor
If only have 8 years left on the lease, you can’t submit for longer than the term you have left
Payment of rent
Ashburn Anstalt v Arnold
Not an essential characteristic of a lease
How to grant a legal lease
- Lease is capable of being a legal estate in land
- Deed is needed to create a legal estate s52 LPA
- Requirements for a valid deed ss1(2) (3) LP(MP)A 1989
- Lease for 7+ years is registrable disposition = created by deed and registered
- Lease for under 3 years may be created orally or in writing s52 LPA (parol lease)
- Implied periodic tenancies
Conditions for Parol lease
- term not longer than 3 years
- lease must start immediately
- must be market rent
- mustn’t pay a premium or purchase price
What is an equitable lease?
Lease which fails to comply with formalities for creating a legal lease may be equitable if formalities for making a contract are satisfied
Walsh v Lonsdale
Formalities for making a contact in land
S.2 LP(MP)A 1989
- must set out all agreed terms
- in writing
- signed by or on behalf of each party
Enforceability of a legal lease which is unregistered
Legal interests bind the world so are automatically enforceable
Enforceability of an equitable lease which is unregistered
Would need to be registered as a land charge
C(iv) land charge
If not registered as a land charge then will not be binding against buyer
Enforceability of a registrable disposition
Legal lease for a term over 7 years s27 LRA 2002
To be enforceable against new owner of freehold, it must be registered with its own title
Enforceability of an overriding interest
Legal lease for a term not exceeding 7 years
Schedule 3 para 1 LRA 2002
Don’t have to be registered, automatically overriding
Enforceability of an IARE
Default position is it should be registered as a notice in the charges register
If not registered there is a possibility of OI under Schedule 3 para 2 of tenant in actual occupation
What is a licence
Makes occupation of land lawful that without permission, would be trespass
Who is the licensor
Person granting the licence
Who is the licensee
Person to whom the licence is granted
What is a contractual licence
If payment is made, this will be contractual
What is a bare licence
No payments are required
Temporary condition that you give someone permission, expressly or impliedly, to come onto your land
How to terminate a contractual licence
Unless you misbehave, you stay until the end of the period and then leave
Can be for unspecified period and law will apply a term that can be terminated on reasonable notice
Not capable of binding third parties
How to terminate a bare licence
Can terminate at your own will
Why would you grant a licence instead of a lease
If you don’t want the occupier to have tenancy rights
Law protects tenants more than licensees
Temporary transactions
Will licences be enforceable against successors?
Licenses will not bind a licensors successor unless equity can help out
Lloyd v Dugdale
How to know if something is a lease or licence
- Does occupier have exclusive possession
- If yes, was there an intention to create a legal relationship?
- signing document - Are there any circumstances which might negate intention to create a tenancy?
- occupy due to job or friend/family
If YES, YES, NO = Lease
Schedule 3 para 2 LRA 2002 requirements
- Must have a proprietary interest in the land
- Must be in actual occupation
- must be consistent with the nature of the land - Occupation must be obvious on inspection or B had knowledge of interest
- Disclose if inquiry
What can be protected by Sch 3 para 2?
Leases
Possibly estate contracts
Trust interests
What can’t be protected by sch 3 para 2?
Covenants, easements and mortgages
