Leases: essential requirement of a lease

Question 1

What are the factors of a lease?

Answer 1

a) Proprietary right in the Land

b) Is capable of being enforced against third parties

c) A tenant can sue a third party for nuisance or trespass

d) A lease can also confer the right of security of tenure

e) Enforceable in rem

f) Tenants under leases receive various statutory protection

Question 2

Is the agreement a lease or a licence?

Answer 2

A licence confers a personal permission to be on someone’s land.

For a lease a tenancy must have:

a) Certainty of terms: The arrangement has a deadline.

b) Exclusive possession: the right to exclude all others from the property.

c) The correct formalities were used

Question 3

What is a certainty of term in a lease?

Answer 3

1. Fixed term:

Duration of the arrangement is known from the outset. Need a break clause to end it.

2. Periodic term:
   (can be express or implied)

Generally weekly, monthly.. extending itself automatically until either landlord or tenant give notice to terminate the tenancy (notice to quit).

The term of the periodic tenancy is by reference to how the rent is calculated NOT how it is payable.

Question 4

What is exclusive posession?

Answer 4

A question of fact in each case…

The substance has to be examined, along with all the facts.
The courts will look at the reality of a situation.

Question 5

What 3 cases denies exclusive posession?

Answer 5

(1) The landlord retains a key and has a right of access; the purpose for which the key is retained that matters (restricted/unrestricted).

(2) the landlord provides services; cleaning, changing etc..

(3) there is a sharing clause; landlord reserving the right to occupy the property with tenant.

Question 6

What should we consider when looking at a sharing clause?

Answer 6

• The size and nature of the accommodation.
• The relationship between the occupiers
• The wording of the clause
• Whether the clause has ever been exercised

Question 7

What about exclusive posession in a lease with 2+ people?

Answer 7

JOINT TENANCY: Must complete the 4 unities:

1. Unity of posession:
   All must be entitled to occupy the whole of the premises.
2. Unity of interest:
   all have the lease for the same term, same conditions and jointly liable for rent
3. Unity of start time for interests.
4. Unity of title:
   All the occupiers interests must derive from the same document or separate and identical.

Question 8

What factors may defeat a lease?

Answer 8

even when the unities are completed, it might qualify as merely a licence when..

a) there is no intention to create legal relations;
family arrangement, an act of friendship or generosity.

b) there is a service occupancy;
employee is required to live in the premises for the better performance of his duties.

Question 9

What are the correct formalities to create the lease?

Answer 9

Depends on the length of the terms of the lease.

General rule: Deed

<7 years: Deed + registered

> 7 years: overriding interest; no need for registration.

Question 10

What is the short lease (parol leases) exemption?

Answer 10

No formal requirements - not even in writing.

1. The lease takes effect in possession (ie the tenant takes the lease immediately).
2. The lease is granted at ‘best/market rent’
3. The lease is not subject to a fine or premium (no upfront payment for the grant of the lease).

Question 11

What arrangements fall under the short lease exemption?

Answer 11

• Short fixed term leases (those with a maximum term of three years or less.)
• Express periodic tenancies.
• Implied periodic tenancies (where an occupier is in possession and paying a rent at regular intervals.)

Question 12

When is an equitable lease created?

Answer 12

May be created deliberately

• There is a document that
  complies with LP(MP)A 1989, s 2
• The remedy of specific
  performance is available

PS! Walsh v Lonsdale: If in the same circumstances there is both an implied legal lease and an equitable lease, the equitable lease will prevail.