Leases MCQs Flashcards
A businessman is proposing to take a short lease of an office suite for a term of four years. The lease is to be at a market rent and with a premium of £500 for the grant of the lease. He wishes to keep the costs low and asks his solicitor whether an oral lease would be sufficient to create a legal lease.
Which one of the following statements best describes whether an oral lease would suffice?
a) An oral lease would be sufficient to create a legal lease because the lease is for a term of less than five years for no premium.
b) An oral lease would not be sufficient to create a legal lease because although it is a short lease there is a premium payable.
c) An oral lease may possibly be sufficient to create a legal lease, depending upon whether or not the landlord’s reversionary title is registered.
d) An oral lease would be sufficient to create a legal lease because the lease is for a term not exceeding seven years and is not therefore registrable at HM Land Registry.
e) An oral lease would not be sufficient to create a legal lease because the term is for a period exceeding three years.
E
This is because a lease for a term of more than three years, taking effect immediately and reserving the best rent reasonably available, must be made by deed if it is to take effect as a legal lease (s52(1) Law of Property Act 1925). As the lease will not be for a term exceeding seven years, it will not have to be registered at HM Land Registry in order to take effect at law (s27 Land Registration Act 2002). It may, however, be protected by entry of a notice in the register of the landlord’s title, as it is for a term exceeding three years (s33(d) Land Registration Act 2002). However, even if such a notice is not entered, the lease will be protected as an overriding interest (Sch 3, para 4, Land Registration Act 2002).
