Leases

Leases Freehold estate= indefinite duration Leasehold estate= a definite duration LEASES, TENANCY, DEMISE.  LPA 1925 S1 (1) (b) A leasehold is "carved" out of a freehold estate leaving a reversion (a remaining interest for the lessor).  One can be a lessee and a lessor if a sub-lease is created.  Leases are both contractual and proprietary Licence= granting simple permission  Lease=  granting permission AND the right to exclusive possession (the right to exclude persons from the land including the lessor)  Lease or Licence?Rent acts regulate the rent chargeable for tenants under a lease as they were created to protect vulnerable people after WWII. Licences therefore gave landlords a way around leases and rent limitations.Objective approach- what was actually conferred in the agreement? form is ignoredSubjective approach- what was intended in the agreement? form is consideredFacchini v Bryson: courts refused landowners to avoid the rent acts by calling their documents licences as opposed to leases. The objective approach was taken. Somma v Hazelhurst: Facchini v Bryson had killed the rental Market. Somma v Hazelhurst. A subjective approach was taken; the terms were in the form of a Licence and so must be a Licence even though some of the terms were unreasonable for a licence. Street v Mountford: Street entered into an agreement in which Mountford would have exclusive occupation of two rooms. This contained a clause that no lease was intended to be created. Held, the party's intentions did not amount to the agreement, the objective approach was re-enforced and whether or not a lease was created was to be based upon the substance of the agreement. In this case as exclusive possession was allowed it seemed that there was a lease created. Furthermore, rent is an essential aspect of a lease. There was held to be exclusive possession within the two rooms to which he could exclude the landlord from these two rooms. Exclusive occupation proves a rebuttable presumption of exclusive possession. This supported the court's original ruling and also Parliament's intentions of the Rent Acts. Note: Lodgers do not have exclusive occupation, they are only licencees as the landlord provides services which require access to the property. Exclusive Occupation is purely factual- sole and exclusive use of the premises. Antoniades v Villiers: Villiers and partner entered into identical and simultaneous agreements with Antoniades. They each had exclusive possession of each room but were independent of one another. This could not be a joint tenancy as each agreement contained different terms and rent Antoniades claimed rights to use flat at the same time as the couple and to introduce a limitless number of licencees. Held, these provisions were "not real", there was an intention to from a lease as the basis of the agreement conferred exclusive occupation and so exclusive possession. In order for exclusive possession to be found in a Joint Tenancy the FOUR UNITIES of TIME, POSSESSION, TITLE and INTEREST must be met.  Shared/ multiple possession will result in a Unity of Possession giving rise to a joint tenancy. Aslan v Murphy: defendant exclusively occupied the basement under a licence which allowed the addition of more tenants. The owner retained the key- this had no significance but the reason behind it may. Maintenance and readings do not affect exclusive occupation. Genuine services which require retainment of the key may destroy exclusive occupation eg. bed changing. Held, although the key was retained to clean the room, this was not actually done and so a lease was found.Bruton v LQHT:  Local authority granted LQHT a licence to use property as short-term accommodation for homeless people on trust. Bruton was allowed exclusive occupation of the flat on a temporary basis. Although there was no property right, Bruton was held to have a lease due to the exclusive possession. This meant he had a covenant to repair and look after the flat. Kay: The occupiers of Bruton lease was merely a contractual agreement between lessor an lessee. There can be no third party effect: It is not proprietary and so cannot be binding against a third party purchaser. A Bruton lease was separate from a normal lease. It was a non-proprietary lease. LCD v Nidai: The occupier could only own a licence because the landlord owned a licence. This disregarded Bruton although it was not actually mentioned.Exclusive Occupancy Exception 1- Service Occupancy.Exclusive occupancy as a consequence of his employment does not result in a lease. An employee can be a licensee if he is genuinely required to stay for the benefit of his duties.  Glasgow Corp v Johnston: Clergyman occupied house as part of church, the priest was not a tenant as he was required to live there to assist his duties. There was no lease. Facchini v Bryson: Ice Cream manufacture allowed assistant to occupy his house in return for rent. As he was not a service occupier there was no lease. Norris v Checkfield: Mechanic allowed into house on condition of passing driving test. Although he had not done this he would be living there on a permanent basis as an employee. Exclusive Occupancy Exception 2- Family Relationships and Friendships Cobb v Lane: Cobb lived with partner for 3 years, this was a lease. Nunn: Man moved in with in-laws. He was paying rent and so held a lease. Heslop v Burns: Man purchased house for Burns and later became their child's grandfather. The couple paid no rent. When he died it was held that there had never been an intention to create legal relations or for exclusive occupancy. Exclusive Occupancy Exception 3- Charity and GenerosityGrey v Taylor: Woman occupied an arms house, she paid for her weekly sum but could not be a tenant as the Charity could only work if they accept the money through generosity. There was no lease. Shams and PretencesUpon face-value shams appear to direct towards the finding of no exclusive occupation. However, if terms are used to prevent the finding of a lease there is a sham. Marcou v De Silversa: agreement between parties included a provision to not use the room between a certain time each day. This was unrealistic and so would result in being a sham however, the agreement as a whole showed a licence. Certain TermMarshall v Berridge: The period of time for beginning and ending a lease must be sufficiently certain Certainty of Commencement: Brilliant v Michaels: An agreement for a lease to begin on the occurrence of an uncertain event is valid if the event occurs. Revisionary lease- agreement for a lease to begin at a certain later time (LPA 1925 s149 under 21 years in the future) Certainty of Maximum Term: this distinguishes between a freehold and leasehold. The period of a lease ends upon an event. Lace v Chantler: Sublease of a house during WWII was not certain as it was unknown how long the war would last and therefore there was no certainty of Term. Ashburn Ansalt v Arnold: Arnold was under a leasehold contract that allowed them to stay at the property without payment for a short amount of time. Held, the end of a lease must be bought about by a sufficiently certain event as opposed to a certain date. Rent is not necessary for a lease, it is merely a good indication. Prudential Assurance: Owned land next to high way and entered into an agreement to sell the strip of land which was then leased back to him until the council needed the land. There was no certain term. Berrisford v Mexfield: Mexfield bought Berrisford's house and leased it to him "month by month". This was held to be a lease for life as it determined another event determinable by death clause. FormalitiesFixed Term Lease, LPA 1925, s52: Term not exceeding 3 years: can be created orally unless the lease is not definitely 3 years. Tenant takes effect in possession.Lease between 3-7 years: must be made by deedMore than 7 years: must be made by deed and be registered. Equitable Lease, LPA Miscellaneous Provisions Act:Must have a valid contract to create a legal lease. Where formalities are not complied to equity will "see done that which should have been done" and will create an equitable lease if there is a specifically enforceable contract Walsh v Lonsdale: Defendant agreed to grant lease to plaintiff for 7 years. No deed was executed and so a legal lease could not be found. The plaintiff had entered into possession and could not pay arrears as they fell ill, the remedy of distress was exercised by the landlord. Because the deed had not been executed the plaintiff argued a periodic tenancy had arisen. Held, this was merely equitable as the terms of the failed legal lease did not specify it as periodic. Periodic Tenancy:Tenancy originally set for a fixed period which will repeat until ended by one of the partiesWhen one is given exclusive occupation in return for periodic rent, in the absence of all else, the court will imply a periodic tenancy to "fill in the gaps" of the lease.  Javad v Muhammed: A periodic tenancy is one which reoccurs. This may be express or implied. Tenancy at WillPerson is allowed into possession but either side can agree to terminate the lease at will. Tenancy of SufferanceA lease created when a lessee has stayed in occupation after their lease has ended but is not disputed by the landlord. Terminating LeasesNotice must be expressly provided for in a fixed-term lease.Mannai Investement v Eagle: Contained a clause for termination 3 years after notice. The tenant gave notice days before the 3 year deadline. Held, effective notice had been given as the notice would merely have become active after the 3 years had passed which was "quite clear to a reasonable landlord"Surrender- Leasehold is surrendered back to the owner. If done expressly this is a conveyance and so requires a deed under LPA 1925 s52(1). Hoggett v Hoggett: giving up possession of the house to landlord is effective as surrender by operation of law. Merger- another person purchases the freeholdForfeiture- if the tenant is in breach of their covenants the landlord can forfeit their lease. Repudiation- If a fundamental term has been breached, common law allows repudiation (the contract is declared invalid) and damages Hussen v Mehlam: Lessee had not carried out the repairs to the point of being unmanageable. The landlord was allowed to repudiate the lease and claim damages.  

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