Leases And Licences

Question 1

What is a lease

Answer 1

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

Question 2

Fixed-term lease/tenancy

Answer 2

Expires without need for notice

Term can be any length

Question 3

Periodic lease/tenancy

Answer 3

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

Question 4

Basic requirements for a lease

Answer 4

1. Exclusive possession
2. Determinate term
3. Less than that held by grantor
4. Payment of rent

Question 5

Exclusive possession

Answer 5

Street v Mountford

People can only enter property with tenants permission

Don’t have this then you don’t have a lease

Question 6

Determinate term

Answer 6

Lace v Chantler

Certainty of duration

Question 7

Term must be for less than that held by grantor

Answer 7

If only have 8 years left on the lease, you can’t submit for longer than the term you have left

Question 8

Payment of rent

Answer 8

Ashburn Anstalt v Arnold

Not an essential characteristic of a lease

Question 9

How to grant a legal lease

Answer 9

1. Lease is capable of being a legal estate in land
2. Deed is needed to create a legal estate s52 LPA
3. Requirements for a valid deed ss1(2) (3) LP(MP)A 1989
4. Lease for 7+ years is registrable disposition = created by deed and registered
5. Lease for under 3 years may be created orally or in writing s52 LPA (parol lease)
6. Implied periodic tenancies

Question 10

Conditions for Parol lease

Answer 10

• term not longer than 3 years
• lease must start immediately
• must be market rent
• mustn’t pay a premium or purchase price

Question 11

What is an equitable lease?

Answer 11

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

Question 12

Formalities for making a contact in land

Answer 12

S.2 LP(MP)A 1989

• must set out all agreed terms
• in writing
• signed by or on behalf of each party

Question 13

Enforceability of a legal lease which is unregistered

Answer 13

Legal interests bind the world so are automatically enforceable

Question 14

Enforceability of an equitable lease which is unregistered

Answer 14

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

Question 15

Enforceability of a registrable disposition

Answer 15

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

Question 16

Enforceability of an overriding interest

Answer 16

Legal lease for a term not exceeding 7 years

Schedule 3 para 1 LRA 2002

Don’t have to be registered, automatically overriding

Question 17

Enforceability of an IARE

Answer 17

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

Question 18

What is a licence

Answer 18

Makes occupation of land lawful that without permission, would be trespass

Question 19

Who is the licensor

Answer 19

Person granting the licence

Question 20

Who is the licensee

Answer 20

Person to whom the licence is granted

Question 21

What is a contractual licence

Answer 21

If payment is made, this will be contractual

Question 22

What is a bare licence

Answer 22

No payments are required

Temporary condition that you give someone permission, expressly or impliedly, to come onto your land

Question 23

How to terminate a contractual licence

Answer 23

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

Question 24

How to terminate a bare licence

Answer 24

Can terminate at your own will

Question 25

Why would you grant a licence instead of a lease

Answer 25

If you don’t want the occupier to have tenancy rights

Law protects tenants more than licensees

Temporary transactions

Question 26

Will licences be enforceable against successors?

Answer 26

Licenses will not bind a licensors successor unless equity can help out

Lloyd v Dugdale

Question 27

How to know if something is a lease or licence

Answer 27

1. Does occupier have exclusive possession
2. If yes, was there an intention to create a legal relationship?
   - signing document
3. Are there any circumstances which might negate intention to create a tenancy?
   - occupy due to job or friend/family

If YES, YES, NO = Lease

Question 28

Schedule 3 para 2 LRA 2002 requirements

Answer 28

1. Must have a proprietary interest in the land
2. Must be in actual occupation
   - must be consistent with the nature of the land
3. Occupation must be obvious on inspection or B had knowledge of interest
4. Disclose if inquiry

Question 29

What can be protected by Sch 3 para 2?

Answer 29

Leases

Possibly estate contracts

Trust interests

Question 30

What can’t be protected by sch 3 para 2?

Answer 30

Covenants, easements and mortgages