Leases: Formalities to create a lease Flashcards
What are the general rules for formalities to create a lease?
To create a legal lease, a deed must be used
What are the formalities if the lease of over 7 years?
The lease must be registered
This is a compulsory registration requirement
If not done a legal leasehold estate will not have been created
What are the formalities for leases UNDER 7 years?
the lease does not need to be registered
they still take effect as a legal lease and will be binding on a new freehold estate owner as an overriding interest
What are the short lease exceptions?
A lease with a term of under 3 years need not be created by a deed provided ALL OF THE BELOW are met:
- The lease takes effect in possession - tenant takes the lease immediately
- The lease is granted at best rent - market rent value
- the lease is not subject to a fine or premium - there is no upfront payment for the grant of the lease
What is the effect of a short lease that complies with exceptions?
Takes effect as a legal lease
Does not require a deed
Does not need to be registered as under 7 years
What types of arrangements fall within the short lease exceptions category?
Short fixed term leases - max 3 years
Express periodic tenancies - where the tenancy is an agreement
Implied periodic tenancies - where an occupier is in possession and paying a rent at regular intervals - and period of periodic tenancy has to be for 3 years or less
What if the parties enter into a contract for a lease or try to create a legal lease but fail by either not creating a valid deed or not registering the lease?
An equitable lease may be created
will reflect that tenants have an equitable interest in the land on the same terms as the defective legal lease provided that:
- There is a document that complies with LP(MP)A s2 AND
- The remedy of specific performance is available
What are the formalities for an equitable lease?
In writing
contains all the terms
signed by both parties
