Lecture 6: Lease & Licence

Question 1

Duration of Leases

Answer 1

1. Fixed Term: can tell when expire
2. At will: the lease has already expired, but landlord gave the permission for tenant to continue staying in the property –> need to give reasonable notice for lease to expire
3. At sufferance: the lease has already expired, but tenant has continued staying in the property without the landlord’s permission –> landlord has to obtain a court order to retake possession

Question 2

Pre-requisite of lease

Answer 2

1. Exclusive Possession: bundle of right which tenant has extend to the rights excluding landlord during tenancy duration
2. Definite period & date of commencement
3. Intention of parties clear: on the bundle of rights tenant has intended to share premises
4. Formalities: Section 6A of Civil Law Act: No action may be brought for immovable property unless there is some memorandum or note in writing –> Land transaction agreement needs to be in writing

Legal Basis of Lease: Contractual so privity of doctrine applies

Question 3

Usual terms in a lease

Answer 3

1. Commencement date
2. Duration of term: certainty of the expiry date
3. Rent Review clause
4. Option to renew clause

Question 4

Obligation between parties: Covenants from landlord to tenant

Answer 4

1. Quiet Enjoyment: Exclusive possession of tenants where the landlord must not interfere with tenant’s use and enjoyment of this property
2. Repairing obligations: who will be responsible for the minor/major repairs
3. The landlord must not delegate from the grant –> landlord must not do any action to lower value of tenant’s lease

Question 5

Obligation between parties: Covenants from tenant to landlord

Answer 5

Tenant’s obligation to pay rent, abide by usage restrictions, follow repairing obligations and not to sublet/assign without obtaining landlord’s permission

Sublet: tenant leasing part of the premises for part of the duration
Assignment: tenant’s entire bundle of rights/interest is passed onto the assignee to take over his position as a tenant

Doctrine of Privity of Estate: relationship of landlord and tenant

Question 6

Enforceability of Covenants: Sublet vs Assignment

Answer 6

1. Sublet
   - There is horizontal privity between original parties and the doctrine of privity of estate and contract applies
   - No privity of contract and estate from sub-lesse to landlord (no vertical privity)
2. Assignment
   - There is horizontal and vertical privity –> where both tenant’s and landlord’s assignee are bounded and have to fulfill covenant which touches and concerns land, which landlord had agreed

Question 7

Breach of covenants: Remedies

Answer 7

1. Damages for breach of action/covenant
2. Recovery of rent arrears
   - Distress Act: landlord apply to court and get court order to authorise him and an officer of court (sheriff) to gain entry into premises
   - If they find anything that belongs to tenant, these things will be seized & sold –> sheriff’s sale
   - Problem: tenant may already know that he cant pay the rent –> taken everything with him already –> nothing left for landlord to seize –> landlord is still back to the original remedy of damages, if tenant is unable to pay, then tenant will be bankrupt

Question 8

Termination of Lease

Answer 8

1. Effluxion of time: lease expires
2. Express power: express term in lease which permits either party to terminate before lease
3. Surrender during the currency of lease
4. Forfeiture: only available to landlord if tenant persistently in breach of contract despite warning notices –> landlord takes away lease
5. Frustration: changes of circumstances beyond control of parties rendering contract not capable of performance

Question 9

Characteristics/Types of Licence

Answer 9

Property passes no interest in the land nor alters nor transfers property in anything, but only makes an action lawful which without it, had been unlawful

1. No exclusive possession
2. Personal right in nature –> bundle of right is smaller/less superior
3. Does not bind 3rd parties
4. Revocable –> license can be withdrawn prematurely
5. Rent Act not applicable

Types of licence:

1. Bare Licence: mere permission to enter someone’s land
2. Contractual licence: to all certain activities
3. Licence coupled with an interest in land/equity

Question 10

Criteria of Lease

Answer 10

1. Exclusive possession
2. Consideration
3. Intention of parties
4. Substance & surrounding circumstances