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Land Law - > Chapter 6: Leases > Flashcards

Chapter 6: Leases Flashcards

1
Q

Who is the lessor?

A

The landlord

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2
Q

Who is the lessee?

A

The tenant

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3
Q

What is the landlord’s interest in land known as?

A

The reversion

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4
Q

Is the reversion an assignable interest?

A

Yes

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5
Q

What is the term for when a tenant disposes of their entire remaining interest in their lease?

A

An assignment

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6
Q

If a tenant grants another lease for a lesser term, what is this lease known as?

A

An underlease (aka sublease or subtenancy)

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7
Q

Leases of what length trigger first registration at HMLR?

A

A lease will trigger first registration at HMLR if the term is in excess of 7 years.

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8
Q

What is a licence?

A
  • Personal right to use land in some way
  • Does not create an estate nor interest in land
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9
Q

Who is the licensor?

A

The person granting the right

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10
Q

Who is the licensee?

A

The person benefitting from the right

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11
Q

What is the term of years absolute?

A
  • A lease
  • Gives the tenant the right to occupy land for a fixed period
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12
Q

What are the three characteristics of a lease?

A
  • Certainty of term (must specify beginning and end date of lease)
  • Exclusive possession - tenant has the right to exclude others from the property
  • Appropriate formalities

The payment of rent is not essential

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13
Q

Can a licence be assigned or sublet?

A

No

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14
Q

If it is unclear whether parties have created a lease or licence, what will the Courts consider?

A

The substance of the agreement

If an agreement calls itself a licence, it will not be regarded as such if the characteristics of a lease are satisifed

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15
Q

Can multiple occupants have exclusive possession?

A
  • Multiple tenants can have exclusive possession, but each tenant’s interest must be granted at the same time in the title document
  • Each party must have the same interest and right of possession

(Four unities - time, title, interest and possession = joint possession)

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16
Q

How may a landlord seek to avoid a joint tenancy?

A

By making tenants sign separate agreements at slightly different times

Note - in such scenarios, the Court will still look at the substance of the agreement rather than the form

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17
Q

If possession is to be exclusive, can joint tenants have their own bedrooms?

A
  • Joint tenants can have their own bedrooms and have the same possessory interest
  • The property must not be divided into separate units with their own locks to exclude others e.g. bedsits
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18
Q

If multiple occupants are to be joint tenants and have their interests considered as a lease, how must their rights and obligations be shared?

A

Joint tenants must have the same rights and obligations and be jointly liable for rent for their interests to be considered a lease

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19
Q

How do the principles relating to exclusive possession differ in commercial leases?

A

The Courts are much less likely to interepret clauses as being ‘sham’ clauses than they are in a domestic context

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20
Q

If in a commercial lease the landlord retains the right to move the tenant to a different unit or retain control over the nature and method of business, is this more likely to indicate exclusive possession?

A

The rental agreement is more likely to prevent exclusive possession if the landlord retains the right to move the tenant to a different unit or retain control over the nature and method of business

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21
Q

If a property is provided as part of an employment agreeement, will this be a licence or a lease?

A

Licence

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22
Q

What is a fixed term tenancy?

A

Tenancy for a fixed term e.g. 3 months or 10 years

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23
Q

A long fixed term tenancy may include a break clause, what is this?

A
  • A break clause allows one or both parties to terminate the lease before the full term has expired
  • Common in commercial tenancies, but not residential
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24
Q

Can rent be adjusted in a fixed long-term lease?

A

Rent can only be adjusted if the lease contains a rent review clause

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25
Q

What is a reversionary lease?

A
  • A lease which is to take effect in the future.
  • I.e. Entering the lease, but possession not taking place until a later date.
26
Q

When will a reversionary lease not be valid?

A

If the period between entering lease and taking possession is longer than 21 years

27
Q

What is a periodic tenancy?

A
  • A tenancy defined by specified period of time e.g. ‘yearly’
  • Automatically renewed unless party gives notice lease being ended
28
Q

What is the notice period for a periodic tenancy?

A
  • The lease will usually contain the notice period
  • If no notice period, it will be defined by same length of time as lease period e.g. year or month
29
Q

Can periodic tenancies be implied?

A
  • The Court may imply a periodic tenancy if the the parties have not entered a written agreement
  • Tenant must have gone in possession and started to pay rent
30
Q

If a periodic tenancy has been implied, how will the period of tenancy be established?

A

The period of tenancy will depend upon the period by which rent is calculated

E.g. if the tenant pays yearly rent, a yearly tenancy will be inferred even if rent is paid monthly

31
Q

What is a tenancy at will?

A
  • Personal arrangement and does not create estate in land
    E.g. Landowner allows buyer to take possession of land before entering written agreement to sell
32
Q

What happens in a tenancy at will if a buyer in possession begins to pay rent?

A

The Court may treat this as a periodic tenancy unless there is clear evidence that the parties intended the tenancy at will to continue

33
Q

What is an express grant?

A

A legal lease created by deed

34
Q

How must legal leases over 3 years be created?

A

All leases over 3 years must be created by deed

35
Q

What type of lease can be created orally without any formalities?

A

A short legal lease for 3 years for less can be created orally without formalities if:
- The tenant immediately takes possession of leased premises.
- Rent is paid at market price and the tenant does not have to pay upfront sum of premium

36
Q

Can a short lease be assigned without formalities?

A

No. Even though a short lease can be created without deed or formality, it can be assigned only by deed

37
Q

Must leases be registered?

A
  • Legal leases over 7 years must be registered
  • Leases of 7 years or less are overriding interests and are binding without registration
38
Q

Can a lease which has not been created by deed be enforced through equity?

A

A lease may still be enforced in equity if:
- The lease is in writing incorporating all expressly agreed terms
- Signed by both parties

Such leases are regarded as a contract for the disposition of land

39
Q

How can an equitable lease be protected?

A

Unregistered land: Class C(iv) charge
Registered land: Notice on charges register

40
Q

What is a qualified alteration covenant?

A
  • Prevents tenant from making non-structural alterations without landlord’s prior written consent.
  • If consent is withheld, it must be reasonable.
41
Q

What is an absolute bar alteration covenant?

A
  • Prevents tenant from making non-structural alterations without landlord’s prior written consent.
  • Withholding of consent need not be reasonable.
42
Q

What is Commercial Rent Arrears Recovery?

A
  • Allows landlord of commercial premises to recover rent arrears by taking control of tenant’s goods and selling them.
  • Applies to new and existing leases from 6 April 2014
  • Applies irrespective of whether or not referred to in lease
  • Landlord must give 7 days notice
43
Q

What is forfeiture?

A
  • When landlord re-enters the property and ends the lease early due to tenant default.
  • Not implied - must be expressly provided for in lease.
  • Landlord must first serve notice.
  • Tenant has right to settle arrears and apply for relief from forfeit
44
Q

Can a landlord waive his right to forfeit?

A

Yes, a landlord can waive his right to forfeit.
E.g. If landlord is aware of breach, accepts or demands payment, this waives right to forfeit

45
Q

If a party to a lease fails to carry out repairing obligations imposed by the lease, which 6 remedies are available?

A
  • Damages (available as a right)
  • Specific performance (discretionary and not available as a right)
  • Self help (innocent part undertakes repairs themselves)
  • Forfeiture
  • Debt action
  • Pursue guarantors and/or rent deposit
46
Q

What is Jervis v Harris Clause?

A
  • A self help clause
  • If a lease contains a self-help clause, landlord can serve notice on defaulting tenant requiring them to do work.
  • If defaulting party fails to undertake the works, the landlord can enter the property to carry out works and recover sums paid
47
Q

What is forfeiture?

A
  • Landlord may wish to forfeit lease if tenant defaults
  • Landlord must serve s146 notice
48
Q

What information must a s146 notice contain?

A

A s146 notice must:
- Specify the breach.
- Require the breach to be remedied within a reasonable time.
- Require the tenant to pay the landlord compensation for the breach if required.

49
Q

Will a tenant be liable for a subsequent tenant’s breach of covenant if they have assigned their lease?

A
  • Tenants are automatically released from their covenants upon assignment in leases made after 1995
  • The original tenant and original landlord are liable to each other in leases made before 1996 (unless one expressly releases other)

N.B. The date of assignment is not relevant, it is the date of the grant of the lease

50
Q

What is an Authorised Guarantee Agreement?

A
  • Relates to leases after 1995
  • Outgoing tenant acts as guarantor for immediate successor
  • Applies to commercial leases and not residential leases
51
Q

Can both residential and commercial leases contain a provision requiring a lessee to provide an Authorised Guarantee Agreement on assignment?

A

A commercial lease may include such a provision, but not a residential lease

52
Q

What will happen if a tenant tries to create a lease that is as long or longer than his own lease?

A

The transaction = assignment and no new lease is created

53
Q

Are covenants in a head lease enforceable by the head landlord against the subtenant?

A

Usually not due to privity of contract.

54
Q

Do tenants have the right to assign their lease or grant subleases out of their interest in the property?

A

Yes, the tenant has the right to assign their lease and grant subleases unless the lease prohibits this

55
Q

What is an absolute covenant against assignment?

A
  • Absolute bar to assignment
  • Tenant prohibited from assigning lease.
  • The tenant may ask the landlord to amend the covenant to permit assignment and the landlord has full discretion to permit or deny
56
Q

What is a qualified covenant against assignment?

A
  • Prohibits tenant from assignign unless the landlord consents or certain conditions are met.
  • The landlord is unable to unreasonably withhold consent
57
Q

How must assignment of a legal lease be made?

A

By deed

58
Q

What is the effect of assignment when a landlord refuses consent?

A
  • The assignment between assignor and assignee is effective, but there will be a breach of covenant
  • Tenant can seek declaration from Court that landlord’s conduct is unreasonable
59
Q

If a head lease is assigned, will the sublease remain valid?

A

Yes

60
Q

If head lease is brought to an end by expiry, notice to quit or forfeiture, what will happen to the sublease?

A

The sublease will also end

61
Q

What is surrender and merger?

A

If there is a fixed term tenancy without a break clause, parties can mutually agree to bring tenancy to an end.

Surrender: parties agree tenant will give up possession to landlord
Merger: parties agree landlord will transfer reversion (interest) to tenant

In both scenarios, the leasehold and freehold interest fuse.

62
Q

If head lease is brought to an end by surrender or merger, what will happen to the sublease?

A

Surrender: Subtenant becomes tenant of head landlord on terms of sublease

Merger: New owner holds estate subject to sublease

Land Law - (9 decks)

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