Leases & Licences: Introduction & Terminology Flashcards
What are the two legal estates in land since 1925 and their durations?
Since 1925, the two types of legal estates in land are:
1. Freehold estate: An estate in fee simple absolute in possession, enduring for an uncertain length of time.
2. Leasehold estate: A term of years absolute, of certain or fixed duration.
What is a lease agreement, and does it need to be written to be valid?
A lease is an agreement that constitutes a contract between parties.
It may not be a written agreement but will still be considered a valid contract.
What are some typical contractual terms of a lease?
Terms include:-
1. the property to be let,
2. lease term,
3. rent payment,
4. repairs,
5. insurance, and
6. sub-letting conditions.
Besides being a contract, what else does a lease create?
A lease creates an estate in land and can bind third parties.
What are some advantages of granting a lease?
- Obtaining regular income,
- retaining an interest in the premises,
- retaining control, and
- enforcing leasehold covenants.
What are some disadvantages of granting a lease?
- Obligations like repairs and insurance,
- potential unreliability of tenants, and
- difficulty in regaining possession.
How are tenancy and lease differentiated based on duration?
Tenancy: is typically for short-term arrangements (e.g., weekly, monthly), whereas a
Lease: refers to fixed-term arrangements (e.g., three years, 99 years).
Which term, often found in older documents, is synonymous with “lease”?
Demise
What terms describe the original grantor and the original grantee of a lease?
Original grantor: lessor
Original grantee: lessee
When does the lessor become known as the landlord, and the lessee as the tenant?
What does the freehold owner retain after creating a lease?
A freehold interest in the property, known as the freehold reversion.
What is created when a leaseholder decides to rent out the leased property to another party?
A sublease, introducing a second lease on the property.
How do “headlease” and “sublease” differ?
Headlease refers to the first lease agreement.
Sublease refers to a subsequent lease agreement created under the first lease.
What is a “headlease”?
The first lease granted by the freehold owner to a lessee, initiating the series of leasehold interests.
Who is the “head landlord”?
The original grantor of the first lease, known as the head lease.
What terms describe a second lease granted for a period shorter than the original lease?
Sublease, underlease, or subtenancy, all referring to a lease granted by the original lessee to a third party for a term less than the original lease.
Who is the “sublessee”?
The grantee of a sublease, underlease, or subtenancy.
What term describes the original lessee when they grant a sublease?
Sublessor or sublandlord.
What interest does the original lessee retain after granting a sublease?
A leasehold interest known as the leasehold reversion.
What term is used if a sublease is further sublet?
Subunderlease, referring to the next level of subletting beyond the initial sublease.
How does the chain of subleases progress beyond a subunderlease?
Through a series of sub-subunderleases, each representing a further level of subletting.
What term describes the original creation of a lease or sublease?
The term is grant, referring to the initial act of creating a lease or sublease.
What is the process called when transferring the freehold reversion or selling a lease/sublease?
This process is known as assignment. It involves transferring ownership of the freehold reversion or the rights of the lease/sublease.
What is required to transfer a legal estate in land?
A deed is necessary to transfer a legal estate, whether it’s selling the freehold reversion or the remaining term of a lease.
