Leases I Flashcards
What is a lease?
A lease is a temporary right granted by a landlord to a tenant to use and enjoy land exclusively
How does a lease differ from a licence?
A lease is proprietary, while a licence is personal
A lease can be enforced against third parties, whereas a licence can only be enforced against a grantor.
What are the key differences between a lease and a licence?
- Lease is proprietary, Licence is personal
- Lease enforceable against third parties, Licence enforceable against grantor only
- Tenant can sue for nuisance or trespass, Licensee cannot sue for nuisance or trespass
- Leases confer security of tenure
- Leases enforceable in rem, Licences enforceable in personam
- Tenants receive statutory protections
What must be examined to determine if an agreement is a lease or a licence?
The substance of the agreement, not the label
Street v Mountford [1985]
What are the requirements for a lease to exist?
- Certainty of term
- Exclusive possession
- correct formalities
What does ‘certainty of term’ mean regarding leases?
It can either be a fixed term or a periodic term
The term is calculated by reference to the period to which the rent is calculated.
What is meant by ‘exclusive possession’ in a lease?
The right to exclude all others from the property
What are signs that there is no exclusive possession?
- The landlord retains a key
- The landlord provides services (lodger)
- There is a sharing clause
What is the general rule for creating a legal lease?
A deed must be used
If the term of the lease is over 7 years, it must also be registered.
What is the short-lease exception?
A lease with a term of three years or less need not be created by deed if:
* Takes effect in possession
* Granted at ‘best rent’
* Not subject to a fine or premium
What are implied periodic tenancies?
Tenancies where no formal documentation exists but rent is paid regularly
This occurs when an arrangement is not documented.
What are equitable leases?
Leases that may be created deliberately or if a valid deed fails
Courts will recognize the tenant’s equitable interest if a document complies with LP(MP)A 1989 s2.
In a conflict between common law and equity regarding leases, which prevails?
Equity prevails
Walsh v Lonsdale (1882)
What are the characteristics of a lease?
A lease is a proprietary right in land, technically known as a term of years absolute.
What will courts consider when determining exclusive possession for a lease?
Courts will consider the reality of the situation, disregarding clauses meant to make a lease appear as a licence.
What are the requirements to create a lease of more than 7 yrs?
- deed
- registered
What are the requirements to create a lease of less than 7 yrs but more than 3 yrs?
deed only (no need for registration)
will be a legal lease, binding as an overriding interest
What are the requirements to create a lease of 3 yrs or less
There are none, provided all the conditions of a parole lease are met.
What factors can defeat a lease even if essential characteristics are present?
- Lack of intention to create legal relations (family arrangements, acts of generosity with no formality)
- a service occupancy
What are the four unities required for a joint tenancy?
Possession, Interest, Title, Time
All four unities must be present for a joint tenancy to exist.
What happens if neither a joint tenancy nor an individual tenancy exists?
Occupants are individual licensees sharing with each other
They can still sign separate yet interdependent documents to satisfy unity of interest and title.
What is security of tenure?
A commercial tenant may continue to occupy beyond the contractual term
Governed by the Landlord and Tenant Act.
What benefits does security of tenure provide to a tenant?
Long-term occupancy, goodwill from location
Tenants can request a new tenancy after the original term.
What benefits does security of tenure provide to a landlord?
- More appealing property to tenants
- Tenants look after premises
- Market rent may be higher
Security of tenure increases property attractiveness.
What is a disadvantage of security of tenure for landlords?
Limits freedom over property
Landlords may face restrictions on property management.
When does security of tenure apply?
- Any tenancy
- Occupied by the tenant
- For the purposes of a business
Excludes non-profits, agricultural tenancies, and fixed term tenancies of six months or less.
What types of tenancies are excluded from security of tenure?
- Licences
- Tenancies at will
- Non-profits
- Agricultural tenancies
- Mining leases
- Service tenancies
- Fixed term tenancies for six months or less ( unless the tenant has been in occupation for twelve months or more.)
How do you contract out of security of tenure?
This is a two stage process:
- LL must serve a warning notice on the tenant in the prescribed form
- the T must provide a declaration in the prescribed form to the LL before completing the lease
What must be in the LL’s notice to contract out of SoT?
the consequences of contracting out
The notice must be in a prescribed form.
What is a service occupancy?
Where the occupier is required to live in the premises for the better performance of their duties as an employee
When can you not contract out of a security of tenure?
If you have a periodic tenancy
What form must the T’s declaration to the LL take?
- if the lease completion is at least 14 days from the date of the warning notice –> simple signed declaration
- if the lease completion is less than 14 days away –> signed statutory declaration
