Nature of Land Flashcards
A woman owns the freehold to a one-bedroom flat in Leeds (the “Property”). She does not live there but instead allows a man to exclusively occupy the Property for two years in return for a lump sum of £25,000. The woman and man signed a document setting out all the agreed terms. The first line of the document provides, “This is a Deed”. The man and woman’s signatures are not witnessed.
What type of third party interest has been created?
Option a: Legal Lease
Option b: Licence
Option c: Estate Contract
Option d: Equitable Easement
Option e: Legal Mortgage
Option C is correct. It cannot be a legal lease as it was not created by a deed, but the document does comply with s.2 of the Law of Property (Miscellaneous Provisions) Act 1989 as it is in writing, signed by both parties and contains all the terms. It is therefore equitable under s.1(3) of the Law of Property Act 1925 and an equitable lease is an estate contract.
Option A is wrong. The man and woman did not get their signatures witnessed and so the document does not comply with the formalities of a deed under s.1 LP(MP)A 1989. In addition, it does not fall within the parol lease exception under s.54(2) LPA 1925 as a premium was paid. It cannot be a legal interest.
Option B is wrong, as it is more than merely a licence or permission to occupy as there is exclusive possession and certainty of term.
Options D and E are wrong as it is not an easement (right of way) or mortgage (charge over the Property).
Last year, in an unsigned document, the owner of a shopping mall granted a lease of a retail unit to a florist. The florist agreed to pay a market rent but did not pay a premium to take the lease. The florist moved in immediately and has been carrying on business from the unit since then.
Does the florist have a legal lease of the retail unit?
Option a: Yes, because the lease satisfies the conditions required to create a parol lease.
Option b: Yes, because the lease was recorded in writing in a document.
Option c: Yes, because the tenant is carrying on a business from the retail unit.
Option d: No, because the lease was not created by deed.
Option e: No, because a premium must be paid for a parol lease to be created.
Option A is correct because the lease is a lease for a term not exceeding three years, taking effect in possession and where the tenant is paying the best rent reasonably obtainable (i.e. a market rent) without a fine (i.e. a premium). These are the conditions for a parol lease to be created (see s54(2) LPA 1925) and parol leases are legal.
Option B is wrong because whilst a parol lease can be created in writing, it does not have to be and need only satisfy the conditions from s54(2) LPA 1925 to exist (and be legal).
Option C is wrong because the occupation of the unit by the tenant for business purposes is not relevant to whether the lease is legal.
Option D is wrong because legal leases falling within the parol lease exception do not need to be created by deed to be legal.
Option E is wrong because the payment of a premium will prevent a parol lease from being created.
Last year, the owner of a piece of land sold part of that land to a buyer. In the transfer deed, the owner granted the buyer a right of way over the owner’s retained land for the rest of the buyer’s life.
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What interest does the buyer hold in the owner’s retained land?
Single correct
Option a: An equitable easement.
Option b: A legal lease.
Option c: A legal restrictive covenant.
Option d: A legal easement.
Option e: An equitable lease.
Option A is the correct answer. An easement allows a landowner to make use of another piece of land for the benefit of his own land. The buyer’s right of way over the owner’s retained land meets that description. The right possesses the essential characteristics of an easement as laid out in Re Ellenborough Park. An easement is capable of being a legal interest but must comply with the criteria in s1(2)(a) LPA 1925. This means that the easement must be granted for a period equivalent to a fee simple absolute in possession (i.e. freehold which can last forever) or a term of years absolute (i.e a lease which must be granted for a fixed duration). The easement granted on these facts does not correspond with either of those periods and therefore cannot be legal. It can only be equitable. It is irrelevant that it has been created by a deed.
Option B is wrong. Although leases created by deed for a term exceeding three years can be legal, a lease requires exclusive possession to be granted for a fixed duration. Neither of those are present on the facts.
Option C is wrong. A restrictive covenant is a promise by one landowner not to do something on or with their land which is given to another landowner. No such promise has been given on the facts here.
Option D is wrong. As indicated above with the explanation for Option A, this easement cannot be legal as it was not created for an appropriate duration.
Option E is wrong for the same reason as Option C. The buyer does not have exclusive possession of the owner’s land for a fixed period of time so there is no lease.
