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.
Who are the assignor and assignee in the context of an assignment?
Assignor: is the party transferring the lease or freehold reversion, and
Assignee: is the party receiving it.
How is the creation of a new lease estate represented in diagrams?
The creation of a new lease estate is represented vertically with a downward arrow from the grantor to the grantee in diagrams.
How is the transfer of an existing estate depicted in diagrams?
The transfer of an existing estate is represented horizontally in diagrams, indicating the transfer from one party to another.
