Leases Intro - GDL Land Law

Distinction between a lease and a licence

• Lease:

  • Creates an estate in land: right of exclusive possession enforceable against all others including landlord

  • Conveys overall control over property

  • Can be transferred (assigned)

  • Capable of binding a new freehold owner

  • Tenant can sue a 3^rd party for nuisance or trespass

• Licence:

  • Not an estate in land but simply a personal permission to be on the land (justification for trespass)

  • Incapable of binding a new freehold owner

  • Licensee cannot sue a 3^rd party for nuisance or trespass

Is the interest granted a lease?

Street v Mountford (HL): look at the substance not the form

• Overruled Somma v Hazelhurst where courts gave weight to the label rather than underlying substance

• Lord Templeman’s dicta: You must call a fork a fork

• The document was described throughout as a licence – but it was in fact a lease

  • Express reservation in the document for the landlord to have limited rights to enter and view the premises and repair/maintain premises emphasises that the grantee had exclusive possession

  • Mr Street provided neither attendance nor services and only had limited rights to inspection/maintenance - so Mrs Mountford was a tenant

• Street v Mountford made it clear that for a lease to exist there must be:

1. Certainty of Term AND:

2. Exclusive Possession

   • But rent is NOT essential : s205 (xxvii) LPA 1925 – confirmed in Ashburn Anstalt v Arnold

Certainty of Term

• Must be granted for a certain duration (either fixed term or periodic term)

• If there is no certainty of term there will be no lease

Exclusive Possession: (Right to exclude all others including the landlord)

• Bruton v London and Quadrant Housing Trust:

  • Lease created despite absence of crucial prerequisite that lessor has a legal estate in land

  • Demonstrates the importance of exclusive possession (controversial case)

• Westminster C.C v Clarke:

  • Here there was a license as there was no exclusive possession

  • Hostel residents were not entitled to any particular room and could be required to share with any other person

  • Council representative could enter at any time

• Landlords may try to disguise the fact that exclusive possession exists with sham clauses – but following Street v Mountford labels are

Potential exclusive possession scenarios:

• Retention of a key

• Aslan v Murphy: ‘the courts would be acting unrealistically if they did not keep a weather eye open for pretence’ per Lord Lymington MR

  • Here the agreement was labelled a licence – the occupier agreed to be out of the house for two hours every day but this was never enforced: this was a sham clause to make it appear like a license

• Landlord retaining a key may indicate that occupant does not have exclusive possession

  • But: if it is used only by arrangement or in an emergency then exclusive possession may still exist (a key is not magic)

• Clauses reserving the right to share or introduce others

• Must look at all the circumstances to see if the right is a genuine clause or a sham to defeat exclusive possession - look at whether the right is actually exercised; wording of the clause; layout of the property

• Antoniades v Villiers: Clause saying that a romantic couple couldn’t marry and that the landlord could introduce others – there was only room for two people – this was a sham clause and there was in fact a lease

• Landlord provides services

• If the landlord has unrestricted access and use of the premises there is a licence not a tenancy

• Marchant v Charters: Landlord had control over the property

  • Services provided so the occupant was merely a lodger (cleaning each day; rubbish and dirty linen removed)

• “Attendance” and “services” considered in Palser v Grinling (HL):

  • Services personal to the tenant provided for the benefit or convenience of the individual tenant – makes him a lodger

  • But service of the common parts does not create a licence

Exceptions: where there is certainty of term and exclusive possession yet no tenancy

• Vesely v Levy: trustees bought a flat for occupation for the beneficiary who had mental health problems – Miss Vesely lived there as a companion and carer. Held that although she had exclusive possession of some of the rooms, the circumstances negative the inference of a tenancy

Usually a license will be found where:

1. There is no intention to create legal relations

• Facchini v Bryson: (Denning’s judgement) – family arrangement, act of friendship or generosity will negate any intention to create a tenancy

• However – presumption is rebuttable: just because there is a family arrangement does not automatically mean there is no tenancy

• Nunn v Dalrymple: CA held that despite family arrangement there was intention to create legal relations – 5 factors: 1) Act (renovation work etc.) 2) Precise terms 3) Importance to parties 4) Lack of elements of generosity 5) Any other relevant conduct

• Heslop v Burns: A woman and her husband were provided with a cottage rent free as an act of generosity – no...