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GDL Law Notes GDL Land Law Notes

Leases Essential Characteristics Notes

Updated Leases Essential Characteristics Notes

GDL Land Law Notes

GDL Land Law

Approximately 556 pages

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  • Distinction: Lease vs Licence

Lease (tenant) Licence (licensee/lodger)

proprietary right: estate in land.

- exclusive possession: inc. vs. landlord.

- can be transferred (assigned).

 personal right: permission to be on land.

right in rem: can bind 3rd parties.

- binds new freehold owner.

- can sue 3rd party for nuisance / trespass.

 does not bind 3rd parties (subject to estoppel/CT).
statutory protection: security of tenure – Rent Act 1977 (but: Housing Act 1988: assured shorthold tenancy reduced residential tenants’ security). no protection.

  • - Important distinction: affects rights of parties.

    • landlords prefer licence: avoid tenant’s security of tenure try to present grant as licence.

    • business arrangements: Rent Act 1977 still applies to tenancies.

    • repair covenants in residential tenancies: if contained in lease Landlord and Tenant Act 1985.

    Test for a Lease: Street v Mountford [1985; HoL].

    - Street v Mountford [1985; HoL]: substance not label.

    • substance over label: if agreement satisfies requirements for tenancy, tenancy created.

      • [Ld Templeman]: a fork is a fork even if called a spade.

      • previous formal approach overruled (Somma v Hazelhurst [1978; CoA]).

    • requirements for lease: if not present, arrangement can only be a licence.

      • 1. certainty of term (fixed or periodic).

      • 2. exclusive possession.

      • rent not essential: s205(xxvii) LPA 1925; Ashburn Anstalt v Arnold [1989].

    1. Certainty of Term

    - Certainty of term: tenancy for certain, definable duration – fixed or periodic.

    • Lace v Chantler; Prudential Assurance v London Residuary Body.

      - BUT: Berrisford v Mexfield Housing Cooperative Ltd [2011; SC]: uncertain term treated as lease for life.

    • facts: M. let property to B. on monthly tenancy; termination clauses: 1 month notice for tenant, but only on uncertain conditions for landlord normally void for certainty, but HoL: ancient law that uncertain term = lease for life + s149(6) LPA 1925: lease for life = 90 years.

    • certainty requirement criticised: impractical – does not allow for uncertain termination clauses.

    2. Exclusive Possession

    - Exclusive possession: right to exclude others, inc. landlord.

    • reality of agreement inc. background: label can be ignored.

      • Street v Mountford: agreement called ‘licence’, inc. landlord’s right to enter; tenant (M) tried to register fair rent under Rents Act 1977 (requires tenancy) HoL: lease in substance (exclusive possession; emphasised by express reservation of limited right to enter).

      • Westminster CC v Clarke [1992]: room in hostel for addicts held under ‘licence to occupy’; WCC reserved right to change room, require him to share HoL: licence not lease – council needed to retain possession to make arrangements + supervise.

      • Bruton v London and Quadrant Housing Trust [2000]: LQHT providing short-term housing for homeless; B. occupied room on ‘licence’; B. claimed LQHT in breach of implied repairing obligations (s11 L&TA 1985 – only app. to leases) HoL: lease not licence (despite fact that LQHT only held on licence) – exclusive possession: only limited rights to enter.

    • agreement sometimes sham by landlord: suggest that property occupied under licence not lease.

    - Clauses to defeat exclusive possession: if genuine licence; if sham/pretence may still be lease.

    • retention of key/right of access: if emergency/by arrangement only, exclusive possession may still exist.

      • Aslan v Murphy [1990]: A. granted M. limited ‘licence’ to occupy room: exc. 1030-1200hrs every day, landlord retained key + right of entry, right to share; M. claimed agreement a sham HoL: lease – restrictions unrealistic pretences (not part of ‘true bargain’).

        • [Ld Donaldson]: retention of key ‘not magic’ in itself – underlying reason important.

    • reserving right to share / introduce others

      • A G Securities v Vaughan [1990]: 4 rooms in shared flat; separate agreements (different monthly payments + timing) HoL: landlord’s right to introduce 3rd parties genuine licence.

      • Antoniades v Villiers [1990]: couple occupied small room together; signed identical agreements HoL: right of landlord to ‘share’/introduce 3rd parties = pretence exclusive possession.

    • provision of services: if for benefit of individual tenant in use/enjoyment of property lodger, not tenant.

      • Marchant v Charters [1977]: C. occupied bedsit in shared house, landlady (M) cleaned daily + changed linen weekly [Ld Denning]: services too substantial for tenancy licence.

        • [Ld Denning]: dep. on nature + quality of occupancy taking into account all circs.

      • Huwyler v Ruddy [1996]: provision in agreement for attendance (only 20 min per week, but required unrestricted access) CoA: attendance light but still contractual right licence.

    Exceptions to Street v Mountford: no lease despite certainty of term + exclusive possession.

    • Street v Mountford: [Ld Templeman]: consider surrounding circumstances – no ICLR or exclusive possession referable to legal relationship other than tenancy – e.g. contract for sale of land, occupation by employee.

    - No intention to create legal relations.

    • Faccini v Bryson [1952]: [Ld Denning]: family arrangement, generosity might negative intention to create lease.

    • Heslop v Burns [1974]: landlord provided rent-free cottage to couple as act of generosity; no agreement on terms licence: impossible to infer...

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