Leases: Essential Requirements Flashcards
Is a lease a recognised proprietary right in land?
Yes - term of years absolute
What are the key differences between a lease and a licence?
Proprietary vs personal
Capable of being enforced against third parties versus only against the grantor
Leases have security of tenure and are enforceable in rem
Tenants get statutory protections
What must exist for a lease to exist?
Certainty of term
Exclusivity of possession
Correct formalities used to create the lease
[Rent is not essential]
What is a fixed term lease?
Maximum duration of lease known from the outset
What is a periodic tenancy?
A lease for one period e.g. weekly, monthly, etc. Can be created expressly or impliedly by payment of rent in particular chunks depending on when it is calculated, not payable
What is exclusive possession?
The right to exclude all others from the property, including the landlord
How will courts consider whether exclusive possession exists?
Question of fact - reality of a situation.
Things suggesting no exclusive possession:
- Landlord retains a key and has a right of access - purpose of the key is essential - is access restricted or unrestricted?
- Landlord provides services - would make it a licence
- There is a sharing clause - must check if genuine or a sham
What should you consider when judging if a sharing clause is genuine or a sham?
Size and nature of the accommodation - would it be realistic to introduce others into it?
Relationship between the occupiers
Wording of the clause - the wider it is, more likely to be a sham
Has the clause ever been exercised?
How does Street v Mountford apply to non-residential tenancies?
Equally - certainty and exclusivity must be shown.
Court considers document more as a whole for businesses, considering if landlord retains degree of physical control over property.
More likely to accept a licence argument because of equality of bargaining power
What is the effect of a contract containing a right to relocate and move the tenant in a business arrangement?
Cannot be a lease unless it is a sham clause
What must joint tenants hold?
Unity of possession, time, title and interest
What is the implication if neither a joint tenancy nor an individual tenancy exists?
Occupants can only be individual licensees sharing with each other.
What factors may defeat a lease, even if the essential characteristics of a lease exist?
When there is no intention to create legal relations
Where there is a service occupancy
Give examples where there may be no intention to create legal relations:
Where there is a family arrangement, an act of friendship or generosity
However, a degree of formality and or a market rent might defeat this
Give examples of a service occupancy
Where an occupier is living in premises for better performance of their duties - no tenancy
Caretaker’s flat, gamekeeper’s cottage, domestic staff accomodation.
What is the general rule about the formalities to create a lease?
Deed must be used, in accordance with LP(MP)A s1
What additional requirement aside from a deed is needed for a lease over 7 years?
Lease must be registered
How are leases less than 7 years binding on a third party?
As overriding interests
What three conditions need to be met for leases of 3 years or less to require no formalities?
Tenant takes lease immediately
Lease is at market rent
Lease is not subject to a fine or a premium - no upfront payment
What types of leases fall under the short lease exception?
Short fixed term leases
Express periodic tenancies
Implied periodic tenancies (as long as the ‘period’ is under 3 years).
When will courts recognise an equitable lease if it is a failed legal lease?
As long as there is a document complying with LP(MP)A s2 and Specific performance is available
Who will win out of equity versus common law?
Equity
