Leases: essential requirements of a lease

Question 1

What are the essential characteristics of a lease?

Answer 1

1) certain term- can be fixed or a periodic term. A periodic tenancy arises when a tenancy runs from period to period, until a party serves a notice to quit. Such can be express or implied (if paying rent on a periodic basis)- determined by reference to which the rent is calculated.
2) exclusive possession- right to exclude all others from the premises, including landlord. If the grantor retains a key, this will not defeat exclusive possession. It the control over the premises that determines it. If the grantor provides services, it will be a lodger, not a tenant. If the grantor has a right of entry- restricted or unrestricted access. A sharing clause may mean a lack of exclusion.
3) formalities

Question 2

What must be shown by the joint tenancts if sharing possession

Answer 2

1) unity of possession- all occupiers have to be equally entitled to the entirety of the premises
2) unity of interest- must be subject to the same interests
3) Unity of time- occupiers interest must have started at same time
4) Must have derived interest from the same document, or different documents but where they are the same/interdependant.

Question 3

What factors would defeat a lease?

Answer 3

1) an ‘act of generosity’- no intention to create legal relations. Irrelevant if rent paid etc
2) a service occupancy- if an employee is given occupation- licence not a lease.

Question 4

What formalities need to be complied with?

Answer 4

over 7 years, granted by deed and registered at land registry

Under 7, granted by deed, but no need to be registered.

if 3 years or less, no need for deed, if the tenant moves in straight away, tenant pays market rent and no premium payable.

If the formalities are not followed, an equitable lease may be created if:
in writing,
signed by both parties
contains all the terms

Question 5

What methods of enforcement are there?

Answer 5

If over 7 years, must be registered, and therefore be enforceable by a purchaser

if under 7, overriding interest and therefore binding on a new owner

An equitable interest- should be protected by a notice on the charges register or it will not bin d apurchaser for value. It may only be binding on a purchaser for value as an overriding interest if the occupier is in actual occupation of the land