Leases & Licences Flashcards
(20 cards)
What are the two questions that must be asked when dealing with a lease problem question?
- The content question (what is the content of the rule?)
- The acquisition question (has the right been validly created?)
What are the requirements for a lease (CONTENT)?
Street v Mountford
There must be grant of exclusive possession of the property for a fixed or periodic term for rent
HOWEVER, rent is not always necessary per Ashburn Anstalt v Arnold
What is the difference between a sham and pretence and how do we determine these?
- Sham: common intention to deceive, parties don’t intend for it to actually have legal effect / be legally bound by it (likely a landlord will though)
- Pretence: Landlord proposes a term they have no intention of enforcing, tenant should not be bound by this
Consider things like did they intend to enforce it, is it realistic, was it ever actually exercised
What is the position if an agreement is for multiple occupants?
AG Securities v Vaughan and Antoniades v Villiers
* Where there are multiple occupiers to an agreement their relationship has to be considered to determine whether the agreements are interdependent
* When it is owned by multiple persons the occupiers may be licensees or tenants of the whole or tenants of separate parts
Court will be looking for the four unities, if they have such the pretence will likely not have effect
What does the case law say about pretences?
Antoniades v Villiers: A contractual provision will be a pretence if
1. It does not reflect the substance and reality of the transaction
2. It was never seriously intended in fact
3. The parties do not regard it as a provision to which any effect would ever be given
Aslan v Murphy
* If a landlord retains the right to enter the property then this does not mean the exclusive possession element will fail
* If a pretence is identified this does not mean that the lease is a sham, these provisions can be removed to grant a lease
Bright: motive is irrelevant, test is simply whether or not the device is seriously intended
What is legal periodic tenancy?
Prudential Assurance Co Ltd v London Residuary Body
A type of rental agreement that runs on a rolling basis that can arise when the requirements fail. This is not just on the payment of rent, but looking at the parties contractual intentions and the relevant circumstances (if negotiations are ongoing, it will not arise, Javid v Aqil)
- Each party has the power by notice to determine the end, until this happens it continues each time as if the parties had renewed the agreement
- Determined based on how often money is paid
What does s149(6) Law of Property Act 1925 do and what was the purpose of this?
Converts a lease of an uncertain term into a 90 year lease, this is because prior to this the common law made an uncertain term a life estate, created too many interests in the land and LPA 1925 wanted to limit the amounts of interest
What does the case of Berrisford v Mexfield tell us?
Where a tenancy agreement does not have a certain term, it is not void but creates a tenancy in common law which under s149(6) LPA 1925 becomes a 90 year lease
Under common law it first becomes a life tenancy which is then converted pursuant to the section
When will s149(6) not apply?
Southward Housing v Walker
* Where it is contrary to the parties intention
* If the agreement conains fundamental terms that simply cannot be carried over into a 90 year lease
* Court should not destroy the essence of the parties bargain
* May be more consistent with periodic tenancy, e.g. based on its name, how rent is paid, if there is a notice to quit
What is a Bruton tenancy?
Bruton v London and Quadrant Housing Trust
A mere licensee can grant a ‘Bruton lease’ out of his licence that does not confer any proprietary interest in land when a person with exclusive possession of a commercial property has a legal contract with someone who does not have legal title to the property. The tenant in a Bruton tenancy has a limited property right, but no legal estate in the property. This means that the tenant cannot pass the lease on to third parties
NO EFFECT ON THIRD PARTIES
What are the three formality rules that must be complied with in order for a lease to be created? (ACQUISITION)
Contract, Deed and Registration
When must a contract be used?
s2(1) Law of Property Act (Miscellaneous Provisions) 1989, a contract for any disposition must be in writing
UNLESS
s2(5)(a) it is a lease mentioned in s54(2) LPA 1925, i.e. shorter than 3 years at the best rent that can reasonably be obtained
What are the rules on a deed?
- s52(1) Law of Property Act 1925, all conveyances of land or any interest there in are void unless made by deed
- Deed not need for a lease under s54(2)
- s1 LPA (MP) 1989, a deed will not be a deed unless expressly stated on the face and is validly executed
- However, if a deed is not created but a contract exists, a person can get an equitable right pursuant to Walsh v Lonsdale
What are the requirements for a lease to fall under s54(2) meaning it does not need to comply with the formality requirements?
- Period of 3 years or less
- Takes effect in possession (must occur straight away, cannot apply to reversionary leases which take place on a future date, Long v Tower Hamlets LBC)
- Is at the best rent reasonably obtainable without taking a fine
What is the difference between a legal right and an equitable right?
- Equitable lease will arise where there is no deed (incomplete)
- No claim over third parties if you only have an equitable right
How would a person with lease try to stop a third party from having their property?
Land Registration Act 2002
* Claimant would say interest takes priority due to s28, other person would try to argue s29 applies to them
* C would then rely on schedule 3 para 1 if the lease is less than 7 years
* Could also rely on actual occupation if this does not work and they still live there, must be degree of permenance
NOTE: Lease of 7+ years needs to be registered
When will schedule 3 paragraph 1 not work in protecting a lease?
-When it is a period of more than 7 years, therefore if given a 90 year lease under s149(6) LPA 1925 this would not work
-Where the person only has an equitable lease, City PBS v Miller, does not include agreements with a merely contractual effect
What is a licence?
One party is given liberty to use land belonging to another person
Does not give the person exclusive possession to the land, do not give any legal interest only a personal right
What is the difference between a bare licence and a contractual licence?
BARE: Simply giving personal permission by the landowner to enter the land, essentially right to not be a trespasser (Thomas v Sorrell)
CONTRACTUAL: B has liberty to use As land and A is under a contractual duty to B to not revoke this right
What was the decision in Manchester Airport v Dutton and why is this special?
The airport was given the right for possession to an area of land to which they only had a licence over. Laws Lj said it was necessary to give effect to the licensee’s rights under the contract with the licensor. Inconsistent with earlier cases such as Hill v Tupper
