Leases and Licenses

Question 1

What are the two estates in land?

Answer 1

1. Freehold - the fee simple absolute in possession.

2. Leasehold - the term of years absolute.

Question 2

What is a lease?

Answer 2

A lease is an estate in land of a fixed and definite duration.

Question 3

What is a licence?

Answer 3

A licence is a lawful permission to use the land.

1. Right to enter the property.
2. Personal arrangement between licensor and licensee.
3. Licensee acquires no interest in property.
4. Merely a personal right which can be terminated by either party.

Question 4

What are the FOUR requirements of a lease?

Answer 4

1. Exclusive occupation.
2. Payment of rent.
3. Duration for a specified term.
4. If more than 3 years – must be in writing, signed and registered as a deed.

Question 5

What are the THREE main differences between a lease and a licence?

Answer 5

1. Lease provides occupier with an estate in the relevant land - a licence is a permission to make it lawful to use the land.
2. Lease is capable of being assigned - a licence is normally a personal right that cannot be assigned.
3. Lease cannot be terminated until it expires (unless there is a break clause) - a licence can be revoked at any time.

Question 6

If exclusive possession is granted of a defined area over 6 months, what is it likely to be?

Answer 6

A lease.

Question 7

What is the relevant case law between a lease and license?

Answer 7

Street v Mountford 1985

Question 8

Briefly, what does Street v Mountford set out?

Answer 8

It sets out the difference between a lease and a licence.

Question 9

Tell me about Street v Mountford (1985).

Answer 9

Street - Stated the agreement was a licence:
Granted Mountford the right to occupy rooms for a rent of £37 per week.
The terms stated Street could enter at any time in respect of maintenance.
No one other than Moutnford could occupy the premises - could be terminated with 14 days notice.
Licence was not intended to give a tenancy protection from the Rents Act.

Held - The agreement was a lease.
If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy.

Lord Templeman stated:
Distinction between a tenancy and a licence of land lay in the grant of land for a TERM at a RENT with EXCLUSIVE POSSESSION.

Question 10

What is a tenancy at will?

Answer 10

• A form of licence created by written agreement for an unspecified time in which the landlord may evict the tenant at any time.
• No legal interest in land and no right to renew. It can be used to let a tenant in for fitting out works early or if they want to extend an existing lease and they are still negotiating after the lease expiry.

Question 11

What is a wayleave?

Answer 11

A temporary right that receives an annual payment such as for an electricity company to install and retain their apparatus.

Question 12

Can a wayleave be transferred to another company?

Answer 12

No, it is personal to the company and cannot be assigned.

Question 13

What is an easement?

Answer 13

• Permanent right and receives a capital payment.
• Can be registered at Land registry.
• It allows a right enjoyed by one party over the land of another.
• Prescriptive right of way – can be obtained of continuous and uninterrupted use being proven over a period of no less than 20 years.
• A permissive right can be granted by a landowner to allow access over the land – they are not public rights of way.

Question 14

What is adverse possession and how does it apply?

Answer 14

• A person who is not the legal owner of the land can become the legal owner of the land for a specified period of time, without the owners permission.
• If the land is registered and a squatter has clocked up;
  • 12 years of possession before the Land Registration Act came into effect in 2003.
  • If it is after 2003, the new rules apply, and 10 years of occupation is required.
  • If the land is not registered, then the 12 year rule applies.