Leases & Licences

Question 1

What are the two main types of estates in land?

Answer 1

Freehold and Leasehold.
Freehold:
- A type of estate in land where ownership is for an indefinite period, meaning the owner holds the land “forever.”
- The owner of a freehold estate has full ownership rights and can use, transfer, or bequeath the property as they wish.
Leasehold:
- A type of estate in land for a fixed or definite period, such as 99 years or 125 years.
- The leaseholder has the right to use and occupy the land for the duration of the lease but does not own the land permanently.
- Once the lease period ends, ownership of the property reverts to the freeholder.

Question 2

What is a lease?

Answer 2

An estate in land for a definite period that grants exclusive possession and creates proprietary rights (rights in rem).

Question 3

What is a license?

Answer 3

A contractual agreement allowing use of land without exclusive possession, creating only personal rights (rights in personam).

Question 4

Define exclusive possession

Answer 4

The right to exclude all others, including the landlord, from the property.

Question 5

What are the essential elements of a lease?

Answer 5

Exclusive possession, a definite term, and, not necessary, rent to show the intention to create legal relations.

Question 6

Why is a definite term necessary for a lease?

Answer 6

It provides certainty on the start and end of the lease, as demonstrated in Lace v Chantler.

Question 7

Can a lease be valid without rent?

Answer 7

Yes, rent is not essential but can indicate the intention to create a legal estate, as seen in Ashburn Anstalt v Arnold.

Question 8

What does “substance over form” mean in property law?

Answer 8

The actual nature of an agreement, not its label, determines if it is a lease or a license, as emphasized in Street v Mountford.

Question 9

What is the significance of Bruton v London & Quadrant Housing Trust?

Answer 9

It established the concept of a non-proprietary lease, based on exclusive possession, even when the landlord did not have a proprietary estate.

Question 10

What are rights in rem?

Answer 10

Proprietary rights enforceable against the world, typically associated with leases.

Question 11

What are rights in personam?

Answer 11

Personal rights enforceable only against specific individuals, associated with licenses.

Question 12

Why might landlords prefer licenses over leases?

Answer 12

Landlords often prefer licenses because they provide greater flexibility in managing their property. Licenses allow landlords to easily evict occupants without the extensive legal protections afforded to tenants under a lease. This is especially beneficial in avoiding tenant protections under laws like the Rent Acts, which make it harder to terminate a lease.

Question 13

What is a “joint tenancy”?

Answer 13

A form of co-ownership where multiple tenants hold equal shares of the property, with the right of survivorship. All four unities (Possession, Interest, Time, and Title) must be present.

Question 14

What is “tenancy in common”?

Answer 14

A form of co-ownership where tenants hold individual shares in the property, which can be unequal and do not pass automatically to the other tenants on death.

Question 15

What is the “four unities” test for joint tenancies?

Answer 15

Possession, Interest, Time, and Title—required for joint tenancy to exist.

Question 16

What case illustrates the need for certainty in lease duration?

Answer 16

Lace v Chantler (1944), where an uncertain term (duration of the war) made the lease invalid.

Question 17

What is the principle of “nemo dat quod non habet” in property law?

Answer 17

“No one can give what they do not have,” meaning a person cannot transfer more rights than they possess.

Question 18

Define “intention to create legal relations.”

Answer 18

The parties’ intention to be legally bound by their agreement, often shown through elements like rent in a lease.

Question 19

What is a periodic tenancy?

Answer 19

A type of lease that automatically renews for successive periods (e.g., weekly, monthly) until terminated by either party with proper notice.

Question 20

Define “term of years absolute.”

Answer 20

A leasehold estate for a definite period, which can be for any length of time but must have a clear start and end date.

Question 21

What does “fee simple” mean?

Answer 21

The most complete ownership interest in land, lasting indefinitely and often referred to as freehold ownership.

Question 22

What is an “easement”?

Answer 22

A right enjoyed by one landowner over the land of another, such as a right of way. It is an example of an incorporeal hereditament. eg. Imagine you own a piece of land (Land A), and your neighbor owns an adjacent piece of land (Land B). Your neighbor has a right of way over a path on your land, allowing them to cross your property to reach the main road. This right of way is an example of an incorporeal hereditament. It is a non-physical right associated with the land, granting a specific privilege or benefit, but it does not involve owning any physical part of your land.

Question 23

What are incorporeal hereditaments?

Answer 23

Non-physical rights arising from land ownership, such as easements or profits à prendre, as opposed to physical objects attached to the land (corporeal hereditaments).

Question 24

Define “right of survivorship.”

Answer 24

A feature of joint tenancies where the surviving co-owners automatically inherit a deceased co-owner’s share in the property.

Question 25

What is the significance of “Prudential Assurance v London Residuary Body”?

Answer 25

A case illustrating the requirement for certainty of term in leases; an agreement that lacked this certainty was deemed to create only a periodic tenancy.

Question 26

Define “substance over form.”

Answer 26

A legal doctrine that looks at the actual nature and effect of an agreement rather than the labels or formal language used by the parties.

Question 27

Street v Mountford (1985)

Answer 27

The House of Lords held that an agreement labeled as a license was actually a lease because it had exclusive possession, a definite term, and rent. This case established that the substance of an agreement takes precedence over its form, preventing landlords from avoiding tenant protections by mislabeling leases.

Question 28

Lace v Chantler (1944)

Answer 28

The court ruled that a lease “for the duration of the war” was invalid because it lacked certainty of duration. This case highlights the requirement for a lease to have a definite and clear term to be legally valid.

Question 29

Bruton v London & Quadrant Housing Trust

Answer 29

The House of Lords found that Bruton had a lease despite the landlord only holding a license, based on the grant of exclusive possession. This case introduced the idea of a “non-proprietary lease,” challenging traditional notions of leasehold interests.