Leases Flashcards
(13 cards)
General definition of leases
landowner permits another person to use their land for a certain period of time, usually in return for rent payments
introduction to leases
Flexible device -> hybrid nature -> as property, as contract, as conferring status (landlord/tenant relationship not in vacuum, protection to tenant as party with low bargaining power).
Usually proprietary (but Bruton -> partially upset orthodoxy).
Lease = usually contractual agreement between A and B.
Definition of lease
LPA 1925, s.205(1)(xxvii): term of years absolute = term of years (either taking effect in possession or reversion with or without rent) either certain or liable to determination.
LPA 1925, s.149(6): lease for life = term of 90 years.
LPA 1922, s.145, Sch.15 -> no perpetual leases, converted to 2000 year terms.
Street v Mountford [1985], L Templeman: ‘tenancy is a term of years absolute [that] includes a term from week to week in possession at a rent’; occupier must be granted exclusive possession for fixed term in consideration of a premium or periodical payments.
Requirements of lease
3 requirements: 1. Grant of exclusive possession, 2. for a term, 3. at a rent (not actual requirement - Ashburn Anstalt [1989], AG Securities v Vaughan [1990], but satisfies consideration requirements in landlord/tanant contract + relevant for leases <3 years - s.54(2) LPA 1925).
Third parties can be excluded, and landlord to certain extent (‘limited rights to enter’ (Street v Mountford [1985]).
Exclusive possession (right to exclude rest of the world) does not equal exclusive occupation (factual control, physical occupancy).
Fixed term = set period of time; cannot terminate by notice. Periodic term = weekly, monthly, annual; automatic renewal; termination by notice.
Formalities
- For leases over 7 years
Deed + registration - Leases between 3-7 years
Deed - leases under 3 years (s.54(2) LPA)
informal
Registration
- For leases over 7 years
enforced by s.28-29 LRA 2002 - Leases between 3-7 years
enforced by notice s.32 LRA & overriding interest Sc3 para 1 - leases under 3 years (s.54(2) LPA)
no notice s.33 LRA -> overriding interest Sch 3 para 1
When is there no formalities?
e.g. when do equitable leases arise?
- deed but no registration for lease greater than 7 years
- no deed for lease less than 3 years + doctrine of anticipation (Walsh v Lonsdale)
what protection is there against third parties for leases?
- notice -> s.32 LRA
overriding interest Sch 3 para 2 -> actual occupation
Issues with Exclusive Possession: Statutory Avoidance
- Statutory protections for tenants (Rent Act 1977, security of tenure, restriction of rents, Housing Act 1988, restrictions on freedom of contract).
- Landlords granting licences rather than leases -> Somma v Hazelhurst [1978], often accepted by courts, landlords free to decide how to use their land (bit divorced from reality); change in court approach -> Street v Mountford [1985], parties can’t contract away their legal status: if it looks like a duck, quacks like a duck, it’s a duck.
- Bruton v London & Quadrant Housing Trust [2000] -> use of label ‘licence’, held was a lease.
Sham licences
Landlords including terms in contract which deny tenants exclusive possession -> Antoniades v Villiers [1990]: A’s right to enter occupation was sham or pretence, clause not genuine part of the agreement -> courts will look at context to find real intention of parties.
Aslan v Murphy [1990] -> labels used by parties ‘are never conclusive’; exclusive possession will depend ‘upon a combination of factors’, terms of agreement ‘were wholly unrealistic and were clearly pretences’.
NOT ALWAYS SHAMS AND PRETENCES -> Camelot Guardian v Khoo [2018]: no exclusive possession + no sham or pretence.
justifications for sham decisions
- sham = ‘acts done or documents executed by parties […] which are intended […] to give to [3rd parties or court] appearance of creating […] legal rights and obligations different from [ones] which the parties intend to create’ (Snook v London and West Riding Investments Ltd [1967], L Diplock);
- sham does not equal pretence -> ‘common intention’ to deceive = too high a standard as landlord does intent clauses to be binding albeit no intention to enforce.
what are Multiple Occupancy Agreements ?
share or multiple occupation of leased premises.
Problems with exclusive possession and leases/licenses distinction.
Multiple occupancy agreements
Options: A, B, C = licensees. 1. Each A, B, C has exclusive possession (+ therefore lease) of distinct part of premises. 2. A, B, C have exclusive possession (each entitled to whole) + therefore if 4 unities then joint tenants at law. 3. Should be possible A, B, C are TICs of lease (exclusive possession but not all unities).
Different approach by HL -> AG Securities v Vaughan; Antoniades v Villiers [1990]: needed to join genuine joint tenancy (unity of possession, time, interest, title) = lease; intention to receive right to exclusive possession as TICs = no lease (s.34(2) LPA 1925 cannot operate - can’t hold TICs under trust).
Potentially problematic -> Mikeover v Brady [1989]: 4 unities must be present for joint tenancy (possession, title + time present, but no interest because no joint liability to pay monthly rent).
Absence of joint obligation of payment = inconsistent with joint tenancy.