Rent element to a leases problem question Flashcards
What is the third essential element of a leasehold estate?
Rent.
Indeed, Lord Templeman, in Street v Mountford (1985), included ‘rent’ as part of the definition of a tenancy, what was his definition of a tenancy?
Lord Templeman, “my Lords, there is no doubt that the traditional distinction between a tenancy and a licence of land lay in the grant of land for a term at a rent with exclusive possession”.
The fundamental issue regarding rent is what?
A fundamental issue regarding rent is the degree to which it payment is indispensable to establish a lease.
It is a common misconception that rent has to be in monetary form, how else may consist as rent?
Rent can be in goods or services, or payable in kind.
At common law, which authority suppots this?
Bostock v Bryant (1990).
Primarily, rent appears to be an essential characteristic. However, under closer statutory inspection, what do we learn?
Section 205(1)(xxvii) of the LPA 1925 provides that a term of years means a ‘term of years … whether or not at a rent’.
What does this statutory provision indicate?
It is clear that, as a matter of law, a lease may exist where there is no rent payable.
What does this imply?
The absence of a rent obligation, if not counteracted by the existence of any of the other Lord Templemans hallmarks can indicate that no landlord and tenant relationship was intended. In such cases, the occupier may have a mere licence.
However, in the absense of rent, however in the existence of exclusive possession and certain term, a lease may still be found?
At common law, which authority suppots this?
Ashburn Anstalt v. Arnold [1988] 2 All ER 147.
What were the case facts in Ashburn Anstalt v. Arnold [1988] 2 All ER 147?
- In Ashburn Anstalt v Arnold a Mr Walter John Arnold had sold his own property, a very valuable shop premises in Kensington, to a re-developer on a lease back agreement.
- But he had arranged that the lease back on the shop would occur without his paying rent.
- The Court of Appeal (Fox, Neil and Bingham, LJ) held that despite the lack of rent the defendant (Walter Arnold) was held to have a lease and not a license.
In Ashburn Anstalt v Arnold, why was Walter Arnold held to still have a lease?
This was because he had a right of exclusive possession in the agreement at a certain term.
What did Lord Justice Fox in Ashburn v Arnold proclaim?
“We are unable to read Lord Templeman’s speech in Street v Mountford as laying down a principle of “no rent, no lease”.
Ashburn v Arnold remains good law and has been subsequently confirmed in which cases?
Prudential Assurance and others.
Birrell v Carey.
What can we conclude for the hallmark of rent?
- The payment of rent of lack thereof is not irrelevant.
- Rent is not a strict prerequisite for the finding of a valid lease, but it can be a useful analytic tool.
- The payment of rent may infact provide evidence of an intention to create leagal relations.
- The courts are prepared to look beyond the labels of ‘occupation fee’ ‘license fee’ to identify the payment of a rent.
