Leases and Licenses

Question 1

The contractualisation of the lease: explain what this means and give some examples of cases.

Answer 1

The contractualisation of the lease is the idea that the lease contract is not purely designed to give an individual a property right (with some added rights and obligations, though of a minimal character, under the tenancy - eg waste) and instead will give other rights, such as accomodation.

Liverpool City Council v Irwin is a good example, where the court implied in terms which suggested that the tenants were owed an obligation by the landlord to provide access in the form of lifts and lit stairways.

Panalpina: it is now possible for leases to be frustrated.

Repudiatory Breach: it is also prossible for a lease to end with a repudiatory breach.

All three of these suggest that the lease contract is no longer purely to give a property right.

Question 2

What is the definition of a lease?

Answer 2

Street v Mountford: A lease is a grant of exclusive for a term certain. The leaseholder can exclude third parties and the landowner provided the landowner is not given the rgith to enter for repair by the tenancy agreement.

Question 3

If I intend to give an easement, will this have any effect on whether I grant one or a license?

Answer 3

IDC Group v Clark: yes, for easements (though not leases), whether you intend to grant one is determinative.

Question 4

What is hill’s view of street?

Answer 4

Hill’s view is that there is benefit of letting exclusive possession determine whether someone gets a lease, at least for the purposes of the status conferring aspect of leases for statutes, but that it should be recognised as a consumer protection policy exception.

Indeed, the use of exclusive possession granted as a way of protecting tenants doesn’t really work becaue it is still necessary to protect tenants who are enjoying exclusive possession in fact.

Question 5

What are the four elements of a lease in Street v Mountford?

Bonus Points for naming the authorities which fall under it.

Answer 5

(1) A term certain;
(1a) Periodic tenancies and term certain;
(1b) Mexfield and Southward

(2) Exclusive Possession
(2a) Shams
(2b) Joint tenants

(3) At a rent
(3a) discarded - Ashburn v asphalt

Question 6

What are the street exceptions?

Answer 6

(1) no intent to enter legal relations at all (Watts v Stewart).
(2) Where the possession is referrable to another relationship
(3) where the owner had no power to grant a tenancy
(3a) no subject to the bruton leasehold exception

Question 7

What ways can the landlord deprive the tenant of exclusive possession?

Answer 7

Street: This will be a lodger arrangement and will usually involve the landlord having access to the rooms to provide services such as cleaning.

Aslan v Murphy: the test is multi-factoral. Just becasue the landlord has reserved keys does not make the tenant a lodger. It depends on why the landlord has reserved the keys. Contrast keys to get access in the event of an emergency and keys for frequent cleaning, daily bed-making, the provision of clean linen at regular intervals and the like.

Question 8

What is a case which fell on the line for exclusive possession?

Answer 8

Westminster City Council v Clark

The access of the rooms of young homeless men in a shelter by the local authority was absolutely necessary to maintain order and keep the living conditions tidy. It was also necessary so that the council could shuffle men out in order to provide its services, something which would be defeated by the statutory protection.

The courts regarded this is as an ‘exceptional case’, highlighting how they will tread very carefully before declining to find exclusive possession when it deprives a tenant of statutory protection.

Question 9

How does the doctrine of ‘shams and pretences’ work?

Answer 9

Contrast:

Antoniedas

Reserving right to introduce another occupier into a tiny two bedroom flat shared by a couple was illusory and the landlord had no intention to actually carry it out. He merely wanted to deprive them of a leasehold for statutory reasons. The terms were also identical. HoL also noted the disparity in bargaining power and how the tenants had not closely read the agreement, desparate for somewhere to stay. They would have debated it had it been a real term.

Ag Securities v Vaughan

Landlord leases land with four separate bedrooms to four separate tenants. Found that his provisions of switching/rotating them in and out was not an idle one but duly exercised by the landlord. These were four separate licenses, not a single joint tenancy. This was supported by the fact they moved in at different times and that if one had died it seems unreal to suggest they could have denied a replacement tenant to move in.

Question 10

Analysis of the ‘pretence’ reasoning of Lord Templeman.

Answer 10

(1) This is not the same as the sham doctrine in Snook as there the parties are colluding. Rather, it is something different and looks more like consumer protection (aka UCTA, but note Hill’s concern - is it really right for the courts to have assumed this strikeout power for themselves?).
(2) See how it focuses on subsequent conduct and may also hinge on a merits based approach (Westminister council v Clark)
(3) Bright: The inserter cannot rely on the appearance of formal rights to bind the other party. If they do, the other can adduce external evidence to show why it is phony/non-genuine.

Question 11

Is there an exception of the pretence/sham doctrine for commercial settings

Answer 11

National Car Parks Ltd v The Trinity Development Company: the courts will be more hesitant in striking out shams in commercial contexts as they are more closely negotiated.

Question 12

What additional requirements are there for occupiers in a group trying to claim they have a lease?

Answer 12

AG Securities v Vaughan

(1) they must also be joint tenants, which means a unity of time, interest, possession, and title. This issue in this case was that the tenants moved in at different times with different rents so did not have a unity of interest.
(2) Mikeover v Brady: however, this approach (seemingly designed to get around the pretence doctrine being used too freely) has narrowed the law for joint occupiers. Here, a man was denied holding a lease because he and his co-habitor were paying separate rents which he could not take upon himself to pay. Separation of interests as he could not show, as in Antoniedas, that the separate payment terms were a sham.

Question 13

Is the sham doctrine still being applied?

Answer 13

Yes:

Camelot Property Management Ltd v Roynon

Occupier found to be tenant of a specific room.

Restrictions on the use of a room are a common feature of tenancies, and occasional entry without notice to carry out maintenance is consistent with a lease. Furthemore, whenever they did checks of the rooms they gave 24 hour notice.

Also, the tenants chose the room and had virtually exclusive access, being the only ones olding the keys apart from camelot.

Guardian firms need to be careful to deprive enough access basically.

Camelot v Khoo

Here, the high court found that there was not exlcusive possession based on the intent, purpose, and nature of the guardian scheme and the ex-commercial accomodation (shared with all other guardians).

“A non-residential property, overtly temporary occupation, a general ‘living space’, access for the property owner and so on, all leaned towards a licence.”

“Contrast, for instance, the judge in Roynon who was rather quick to find exclusive possession, for instance treating the term against having a partner stay overnight as merely akin to one against keeping pets”

Watts

Alm houses - no intent to create legal relations (albeit see how they have always been like that, so not necessarily a rowing back).

Argument that Khoo and Watts are rowing back street unfounded as street always left gaps for residential licenses, Watts see above, and AG v Vaughan always for licenses as a whole.

Question 14

Authority: maximum term must be certain from the outset.

Answer 14

Lace v Chantler

Question 15

What happens if a periodic tenancy is found void for having an uncertain fetter on termination?

Answer 15

Prudential Assurance London Residuary body

In that instance, the occupancy and payment of rent generates and implied periodic tenancy from year to year, terminable on 6 months notice.

Also note, Lord BW doubted the uncertainty rule but refused to overule it for fear of retrospective effect undermining previous titles.

Question 16

What are examples of valid uncertain tenancies?

Answer 16

Berrisford v Mexfield;

Certain term with huge length terminable upon an uncertain event.

Periodict tenancies, even though they may last forever. Saved from being uncertain by power of giving notice, which acts as a notification a new agreement will not be entered into (rather than notification of ending an existing agreement). Provided they are not fettered by an uncertain condition.

Tenancy for life/marriage/civil partnership. Any lease terminable on one of those events is converted by the LPA 1925 s 149(6) into a 90 year lease terminable on one of those events

Question 17

Ending a periodic tenancy?

Answer 17

Hammersmith and Fulham LBC v Monk

Giving notice prevents continued renewal. Hence why one tenant can deprive the other of their property right by unilaterally giving notice, even if joint tenants.

Question 18

How does the mexfield exception work?

Answer 18

Facts important: condition was arrears, but this was uncertain so cooperative argued that it was an IPT terminable without a condition subject to one month’s notice.

However

Before the 1925 an uncertain term was treated as a tenancy for life of the tenant, terminable upon death of the tenant or on its terms.

And a tenancy for life was converted into a 90 year lease terminable upon the death of the tenant.

Question 19

What are the restrictions on Mexfield?

Answer 19

(1) s149(6) applies only for individuals;
(2) Formality rules apply (Hardy v Haselden)
(3) Intent: the first step, the uncertain term turning into a tenancy for life rule, depends on the intent of the parties. This will not occur when the parties clearly do not intend the tenant to stay there for life. Difference to mexfield was that it didn’t have a right of entry clause and was seen as a periodic tenancy subsisting weekly subject to an option to serve notice fettered by going into arrears.
(4) unilateral notice (Gilpin v Legg): doubts over whether an agreement only temrinable on one side could qualify.

McFalrane critical as he claims the common law rule only made a life estate, not a leasehold for life, and given the former has been removed from the law it is not clear if it can still be used this way, or if s149(6) applies.

Question 20

Criticisms of the certainty rule?

Answer 20

Prudential: defeats the intent of the parties;
Mexfield: the ways of saving a lease demonstrate its lack of purpose. If the law has no policy objection to extremely long leases it is hard to see how it could have one to indeterminate leases.

The rules of saving leases post mexfield have become arbitrary and absurd distinctions are drawn.

The main arguments for are ensuring that the law is doctrinally clear.

More convincing is Macfarlane: MF’s argument is not that there needs to be a term certain, rather that the lease cannot deprive the lessor of the power to forfeit it. In some uncertain terms this is so: for instance, if the UK wins the world cup this year. If they lose, then the lessor is now stuck with a perpetual lease. This would have the effect of making his property right meaningless.

This wouldn’t really explain a 10,000 year lease.

Question 21

Outline how a bruton tenancy works

Answer 21

Where the grantor of the lease lacks a leasehold or an estate themselves, they can still grant what is known as a ‘bruton tenancy’.

Thus, in Bruton, a licensee was able to grant a tenant a personal leasehold.

Question 22

Rules as to the creation of leaseholds

Answer 22

For leases 8+

Must be created by a signed contract s2 of the LPA.
Must be made by a deed s52
s27 for registration

For leases 7-
Needs writing (s2)
Needs a deed (s52)
Schedule 3 para 1 - overriding interest

3-
s54(2): only needs to take effect in possession (immediately Long v London Borough Council); not exceeding three years, at the best possible rent.
Falls under Schd3 para 2

Question 23

Test for implied periodic tenancy

Answer 23

Intent: the payment of rent does not create a presumption in favor of a periodic tenancy, rather the question is whether objectively, in all the circumstances, it can be said the parties intended to create a lease (Erismus Housing). Thus, if the parties are simultaneously negotiating a lease it is unlikely an implied periodic tenancy will be found.

Question 24

What are the respective cancellation terms for the lease?

Answer 24

(1) week - week
(2) month - month
(3) year - 6 months

Question 25

How do the parties make an equitable lease?

Answer 25

Walsh v Lonsdale:

They must make a specifically enforceable contract (s2 of the LPA 1989.) for a lease or fail to register.

Question 26

How are leases transferred?

Answer 26

Assignment: y Deed (Crago v Julian)

Question 27

How to terminate a lease?

Answer 27

Termination of headlease terminates all subleases (Barrett v Morgan)

Question 28

Do both tenants need to serve a notice to cancel a periodic tenancy?

Answer 28

No: Hammersmith and Fulham LBC v Monk.

Contract v land conception of leases.

Contract: “ It would require the clearest wording to suggest that they had intended to enter into so restrictive a contract.”

Land: “ it seems wrong he can be deprived of this property right simply by the unilateral exercise of notice by the other tenant.”

Question 29

What is the requirement for giving notice to cancel a license?

Answer 29

Varies:

Winter Garden Theatre (London) Ltd v Millennium Productions Ltd). This period can range significantly, from a couple of minutes in Robson when the individual is at the door to two years in the case of Parker v Parker, where the Earl of Macclesfield was leaving his ancestral home.