Leases and Licences

Question 1

Rights under lease / licence

Answer 1

The tenant owns the lease and the landlord owns the ‘reversion expectant on the lease’ – that is the right to possession of the property when the lease ends. However, an individual may be given a licence to occupy the land of another that may resemble a lease, yet is a mere personal right. Thus, because the right is purely contractual it will not be enforceable against the rest of the world and only remedies under contract law will be available. Thus, this distinction is significant

Question 2

Key case

Answer 2

Street v Mountford

Question 3

Test from Street

Answer 3

Lord Templeman set out an agreement will be a tenancy if there is exclusive possession, for a term, at a rent

Question 4

Facts of Street

Answer 4

Street granted Mountford the right to occupy two rooms at 5 St Clements Gardens, Boscombe, for £37 per week subject to termination by 14 days’ notice. Mr Street sought declaration that the agreement was a licence not tenancy. allowing the appeal that where residential accommodation had been granted for a term at a rent with exclusive possession, the grantor providing neither attendance nor services the legal consequence was the creation of a tenancy, notwithstanding the used of the word ‘licence.’

Question 5

What is exclusive possession

Answer 5

A tenant armed with exclusive possession can keep out strangers and landlord. An occupier of residential accommodation at a rent for a term is either a lodger or a tenant

Question 6

When is an occupant a lodger

Answer 6

Occupant is a lodger if the landlord provides attendance or services which require the landlord or his servants to exercise unrestricted access to and use of the premises. Creates a licence

Question 7

Sham / Pretences

Answer 7

Court will look for pretences in the documentation. Court must be astute to detect pretences. Part of this is considering whether the parties actually attempted to perform the terms of their agreement. Also consider nature of the premises.

Question 8

Names of document

Answer 8

If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect by insisting they only created a licence. Parties cannot turn a tenancy into a licence merely by calling it one.

Question 9

Rent case

Answer 9

Mikeover

Question 10

Mikeover

Answer 10

Couple lived together in a quasi-matrimonial relationship, the lay-out of the flat was such that it was clearly only suitable for occupation y persons who were personally acceptable to one another. Agreements may contemporaneously in identical form. Did not have one of the unities required for a tenancy to arise – that is unity of interest. The two agreements instead of imposing a joint liability on the man and miss guile to any a deposit of £80 and monthly payments of £173, o their face, imposed on each of them individual and separate obligations to pay only a deposit of £40 and monthly payments of £86. The absence of joint obligations of payment were inconsistent with the existence of a joint tenancy. Concluded, on appeal, that as a matter of substance and reality, each of the two parties to the agreements placed himself or herself under merely individual obligations to pay monthly sums of £86 and deposit of £40, but no joint monetary obligations. Unity of interest imports the existence of joint right and joint obligations. Therefore conclude that the provisions for payment contrained in the agreement were incapable in law of creating a joint tenancy, because the monetary obligations of the two parties were not joint obligations and there was accordingly no complete unity of interest.

Question 11

Term

Answer 11

Mexfield Housing – there was a monthly tenancy. One term provided the agreement was only terminable if there were rent arrears, none on these facts. Owner tried to evict claiming there was no specified term. Held the agreement was simply for a valid month-to-month tenancy.

Question 12

Key cases

Answer 12

Antoniades
AG
Aslan / Duke

Question 13

Antoniades

Answer 13

Landlord, by separate but identical agreement entered into contemporaneously granted a couple occupation of a flat. The property was small attic comprising of bedroom, sitting room with bed-settee and fold up bed table, a kitchen and bathroom. Agreement stated it was a licence and the licensor had right to allow another occupant into the flat. However, the facilities were not suitable for sharing between strangers. Mr A never made any attempt to introduce a third party.

It was found The two agreements were interdependent – both would have been signed or neither. Two agreements must therefore be read together. Rent the flat jointly and sought and enjoyed joint and exclusive occupation of the whole flat. They shared the rights and the obligations imposed by the terms of their occupation. Acquired joint and exclusive occupation in consideration of periodical payments therefore acquired a tenancy jointly.

Question 14

AG Securities

Answer 14

Occupants, by 4 separate agreements made on various different dates between 1982 and 1985, had each been granted by the landlords, in return for a monthly payment, the exclusive right to use a 4-bedroom flat in common with three other occupants. Landlords claimed declaration that 4 occupants were licensees not tenants. Each licensee granted the right to use the flat in common with others who have or may from time to time be granted the like right. Each occupant has 1 room. The agreements were all in the same form and granted the right to share the use of the flat and not to impede the use by not more than three others. Who had which bedroom was a matter of mutual arrangement and when one became vacant there might be a change amongst those left behind.

Held to be licences as they were four separate agreements, which were independent of each other. The agreements did not confer a right of exclusive possession on any one occupant but merely a right to share the flat with others. Agreements been made with four individuals on different dates with different terms and rents, could not be construed as a joint tenancy. Did not have the four unities of joint tenancy.

Question 15

Employee occupant rule

Answer 15

Some jobs require their employees to live on the premises. Consequently, employee will have a right to occupy their employers premises. The rule is – if occupation is necessary for the performance of the employees job then it will be a licence whereas if occupation is not necessary for the performance of the employees job then occupation can be a lease.

Question 16

Employee occupant cases

Answer 16

Norris
Facchini
Hughes
Elvridge

Question 17

Norris facts

Answer 17

Occupant was employed as a semi-skilled mechanic who was expected to drive a coach for his employer. His employer was the owner of the land he occupied. The occupant had lost his licence but did not tell his employer. Found on these facts that occupation was genuinely required for the better performance of his duties therefore was held to be a licensee.

Question 18

Facchini facts

Answer 18

Occupant did not need to be in occupation for the better performance of his duties and was therefore held not to be a licensee.

Question 19

Hughes facts

Answer 19

Headmaster occupied a house in the grounds of the school His contract entitled him to occupy the property but it was not obligatory and he did so. Held occupation was not required for the performance of his duties and therefore because it was voluntary this was a lease.

Question 20

Elvidge facts

Answer 20

Water bailiff who worked at a countryside park was entitled to occupy a house in the parks grounds. His occupation was voluntary and therefore would have been a lease. However, he was promoted at work and part of his new duties it became necessary for the performance of his duties that he occupy the property. Consequently, as soon as he was promoted he became a licensee of the house.

Question 21

Lodgers and cleaning services

Answer 21

Held in street that lodgers and those in receipt of cleaning services will not have a lease

Question 22

Cleaning services cases

Answer 22

Crancour
Vandersteen
Abbeyfeiled

Question 23

Cleaning services cases

Answer 23

Crancour
Vandersteen
Abbeyfield

Question 24

Crancour

Answer 24

Licensor was obliged to provide a housekeeper under the terms of the occupancy agreement. The house keeper was required to clean the occupants room, windows, common parts and collect the occupant’s rubbish and launder linen. It was held that this would be a mere licence because of the cleaning services provided as part of the arrangement. This made the occupant a lodger.

Question 25

Vandersteen

Answer 25

Concerned with the sale of an osteopathy practice. Osteopath wanted to sell business to another osteopath. The first on sold the goodwill of the business to the buyer and rented two rooms on the ground floor for the buyer to operate the practice. Buyer paid rent for premises and extra for the goodwill of the business and extra £1000 annually for cleaning services. Seller and agents entered the premises daily and maintained the buyers appointments daily. Because seller only able to enter the premises to effect the cleaning services under contractual right, meant he did not have a general right to enter the. Buyer could exclude seller at other times therefore having exclusive possession.

Question 26

Abbeyfield

Answer 26

Resident in only persons home was not held to have exclusive possession of their room at the home, they were a licensee because the home provided a housekeeper, meals, cleaned the room etc. The occupant was similar to a hotel guest.

Question 27

Homeless hostel cases

Answer 27

Westminster cc
Bruton

Question 28

Westminster CC

Answer 28

Single man who was homeless stayed in homeless persons hostel operated by the council. He had his own bed/sitting room. Owner of the hostel had a right under their agreement to move the man to another room in the hostel at his discretion. Held this was not a lease because the occupant had to comply with the rules created by the warden of the hostel.

Question 29

Bruton facts

Answer 29

Related to public sector accommodation. Held at first instance that both parties had understood the premises were only made available for short term occupation. Occupant occupied a room in the premises made available by charity housing trust which made available short-term accommodation for homeless people. Held by Lord Hoffmann that the agreement between the trust and the occupant had all of the characteristics of a lease and the occupant had exclusive possession.

Question 30

True Bargain cases

Answer 30

Aslan
Duke

Question 31

Aslan

Answer 31

Plaintiff was the owner of a small basement room occupied by defendant under a written agreement which provided, inter alia, that the defendant was not granted exclusive possession, had a licence to use the room in common with other licensees, that he was to vacate the room for 90 minutes each day and the plaintiff would retain the keys to the room. During the currency of the present agreement virtually no services had been provided. Therefore the courts must look at the true bargain between the defendants to determine exclusive possession.

Question 32

Duke

Answer 32

Plaintiff was the owner of a three-bedroom house occupied exclusively by the defendants and their children under a written agreement which provided, inter alia, that the defendants had no right of exclusive occupation in any part of the premises but would have to share occupation with other persons as directed by the plaintiff, plaintiff was to retain a key and reserved the right to enter the premises at any time. Unlike Aslan would have been possible for them to have shared the house with another occupant – was a small spare bedroom. The evidence did not disclose any immediate intention on the part of the plaintiff to introduce lodger and she never did so. The court has to determine whether the true bargain is that the occupiers are entitled to exclusive possession or right to occupy. Clear that the true bargain was that the defendants should be entitled to exclusive occupation unless and until the plaintiff wanted to exercise her right to authorise someone else to move in as a lodger.

Question 33

What are differences between lease and licence

Answer 33

Personal v property right

Question 34

Consequences of personal v property right

Answer 34

Successors in title - if a lease, then any sale by the landlord will not extinguish the tenant’s lease and this will bind successors in title.

If licence, then sale of the licensed property by the licensor may be breach of contract but the licence will not bind the purchaser, unless unconscionability arises (Ashburn).

Enforcement Actions: if a lease the tenant has the power to take enforcement actions to protect that property. Normally a mere licence does not afford the licensee such power.

Question 35

Statutory protection of lease

Answer 35

Another key reason for drawing a distinction has to do with the extra protection given to tenants, which is not afforded to licensees. The stat provisions are mainly matter for ‘security of tenure.’

Housing Act 1988 s5 - tenancy can only be brought to an end if landlord obtains and executes an order for possession

s7: court makes order for possession only if one or more grounds in Sch 2 made out