W3 Leasehold Flashcards
(124 cards)
What are the advantages of a leasehold over a licence?
Leasehold is a proprietary right
Leasehold will normally bind a new purchaser of land
Leaseholds have a greater degree of security of tenure
Leases require due process to terminate
What is a proprietary right?
A right related to the property itself, rather than a right related to a relationship or contract (i.e. a personal right).
What is security of tenure?
Term used to describe the statutory protections afforded to tenants when a lease ends allowing them to remain in possession until removed by court order
What is a lease (two levels of operation)?
A proprietary right/estate in land - s1.1.b LPA 1925
A contractual relationship between landlord and tenant
Is a licence a proprietary right?
Not usually.
In some cases a licence holder has been given the right to evict or a right to challenge termination
Bruton v London and Quadrant 1999
Facts: Local authority granted a housing trust a licence to use council property as short term accommodation for homeless people, on the condition that the council could have access at specific times for development work. Tenant (who was granted a licence by the housing trust) did not vacate as requested, an action was brought, and question was raised whether it was a lease or a licence. Court determined that the intention of the agreement of both parties was to grant exclusive possession to the tenant, which is essential to a lease under Street v Mountford, so was a lease. The clause requiring the tenant to vacate upon notice were unenforceable, as you can’t contract out of the statutory implied covenants of the LTA 1985. However, the judgment confirmed that while it was a lease/tenancy, it did not necessarily grant proprietary rights.
Significance: HoL accepts the existence of a non-proprietary lease. Example of a technically ultra vires lease. Example of a licence found to actually have been a lease.
Manchester Airport Plc v Dutton 2000
Facts: National Trust owned land near the site for the airport’s second runway and granted a licence for the airport staff to undertake the work. Environmental protestors entered to try and prevent the work. Question was whether a licensee no in de facto occupation or possession was able to rely on a court order for possession. Historically, ejectment could only be performed by someone with a proprietary estate in land. Court held that they could grant a licensee relief which would protect their legal rights in the licence.
Significance: Licence holder given same rights to evict as leaseholder
Manchester Ship Canal Comp v Vauxhall Ltd 2019
Facts: D had a long licence to use drainage pipes and maintain them in the ship canal. Didn’t pay a licence fee, so C tried to terminate. Court granted D right to relief from forfeiture, even though it was a licence. Said the licence granted possessory, if not proprietary, rights, so relief from forfeiture could be granted.
Significance: Licence holder entitled to apply leasehold rules to challenge termination. Example of court taking a pragmatic approach to commercial situations.
What is a service occupancy?
When an employee is required to live in a premises for their job.
Is a service occupancy a lease or a licence?
Has the features of a lease but is not proprietary
Norris v Checksfield 1991
Facts: Employee lives in property to better perform their duties, so if employment terminated, occupancy can be terminated as well. Man given occupancy of a bungalow near a garage to be on call, lost driver’s licence, lost job and occupancy terminated. Tried to argue he still had a lease of bungalow, but court deemed it a licence (contract clearly tied the occupancy to the employment, and rent was deducted from wages), so no protections against eviction applied in this circumstance.
Significance: Example of a service occupancy invalidating the proprietary nature of a lease
What is the statutory definition of a lease?
Term of years absolute
Auth: s1(1)(b) LPA 1925
What is the statutory definition of a “term of years absolute”?
A term of years (including one year or a fraction of a year)
Either in possession or in reversion
Whether or not at rent
Subject or not to another legal estate
Auth: s205(1)(xxvii) LPA 1925
s205(1)(xxvii) LPA 1925
Defines a term of years absolute
What does “in possession” mean?
Tenant physically possesses land
What does “in reversion” mean?
Land is occupied by another, e.g. subtenant
What is the common law definition of a lease?
1) Exclusive possession
2) Certainty of term
3) Rent
Auth: Street v Mountford
Street v Mountford
Facts: Claimant granted defendant the right to occupy two rooms, subject to rent, with 14 days termination notice under an agreement titled “licence”. Agreement included a clause saying that no tenancy was created. Court held that despite the name of the document, it was a tenancy/lease since it granted exclusive possession for a clear term (no attendance or services).
Significance: Provides common law definition for lease: exclusive possession, certainty of term, rent.
What is exclusive possession?
The tenant has the right to exclude others from the property, including the landlord (generally)
What is certainty of term?
The length of the lease must be determinable from the outset
Is rent essential for an agreement to be a lease?
No.
Auth: Ashburn Anstalt v Arnold
Ashburn Anstalt v Arnold 1989
Facts: A man leased a shop premises and subleased it to a business on a long lease (50+ years). He sold both the headlease and sublease on, including provisions that he could remain at the property as a licensee for a period of time without paying rent, and that if the new owner redeveloped the land, he be offered shop premises at a discounted rent. Court held that it constituted a tenancy/lease, even though no rent was required.
Significance: Can still be a lease without a rent.
Does a landlord entering a property/having a key for emergencies violate exclusive possession?
No, landlord entering for reasonable purposes does not disprove exclusive possession
Does a landlord providing services undermine exclusive possession?
Yes, if it’s regular cleaning or similar, can point to more lodger-like arrangements