#4643 - Leases Intro - GDL Land Law

Distinction between a lease and a licence

• Lease:

  • Creates an estate in land: right of exclusive possession enforceable against all others including landlord

  • Conveys overall control over property

  • Can be transferred (assigned)

  • Capable of binding a new freehold owner

  • Tenant can sue a 3^rd party for nuisance or trespass

• Licence:

  • Not an estate in land but simply a personal permission to be on the land (justification for trespass)

  • Incapable of binding a new freehold owner

  • Licensee cannot sue a 3^rd party for nuisance or trespass

Is the interest granted a lease?

Street v Mountford (HL): look at the substance not the form

• Overruled Somma v Hazelhurst where courts gave weight to the label rather than underlying substance

• Lord Templeman’s dicta: You must call a fork a fork

• The document was described throughout as a licence – but it was in fact a lease

  • Express reservation in the document for the landlord to have limited rights to enter and view the premises and repair/maintain premises emphasises that the grantee had exclusive possession

  • Mr Street provided neither attendance nor services and only had limited rights to inspection/maintenance - so Mrs Mountford was a tenant

• Street v Mountford made it clear that for a lease to exist there must be:

1. Certainty of Term AND:

2. Exclusive Possession

   • But rent is NOT essential : s205 (xxvii) LPA 1925 – confirmed in Ashburn Anstalt v Arnold

Certainty of Term

• Must be granted for a certain duration (either fixed term or periodic term)

• If there is no certainty of term there will be no lease

Exclusive Possession: (Right to exclude all others including the landlord)

• Bruton v London and Quadrant Housing Trust:

  • Lease created despite absence of crucial prerequisite that lessor has a legal estate in land

  • Demonstrates the importance of exclusive possession (controversial case)

• Westminster C.C v Clarke:

  • Here there was a license as there was no exclusive possession

  • Hostel residents were not entitled to any particular room and could be required to share with any other person

  • Council representative could enter at any time

• Landlords may try to disguise the fact that exclusive possession exists with sham clauses – but following Street v Mountford labels are

Potential exclusive possession scenarios:

• Retention of a key

• Aslan v Murphy: ‘the courts would be acting unrealistically if they did not keep a weather eye open for pretence’ per Lord Lymington MR

  • Here the agreement was labelled a licence – the occupier agreed to be out of the house for two hours every day but this was never enforced: this was a sham clause to make it appear like a license

• Landlord retaining a key may indicate that occupant does not have exclusive possession

  • But: if it is used only by arrangement or in an emergency then exclusive possession may still exist (a key is not magic)

• Clauses reserving the right to share or introduce others

• Must look at all the circumstances to see if the right is a genuine clause or a sham to defeat exclusive possession - look at whether the right is actually exercised; wording of the clause; layout of the property

• Antoniades v Villiers: Clause saying that a romantic couple couldn’t marry and that the landlord could introduce others – there was only room for two people – this was a sham clause and there was in fact a lease

• Landlord provides services

• If the landlord has unrestricted access and use of the premises there is a licence not a tenancy

• Marchant v Charters: Landlord had control over the property

  • Services provided so the occupant was merely a lodger (cleaning each day; rubbish and dirty linen removed)

• “Attendance” and “services” considered in Palser v Grinling (HL):

  • Services personal to the tenant provided for the benefit or convenience of the individual tenant – makes him a lodger

  • But service of the common parts does not create a licence

Exceptions: where there is certainty of term and exclusive possession yet no tenancy

• Vesely v Levy: trustees bought a flat for occupation for the beneficiary who had mental health problems – Miss Vesely lived there as a companion and carer. Held that although she had exclusive possession of some of the rooms, the circumstances negative the inference of a tenancy

Usually a license will be found where:

1. There is no intention to create legal relations

• Facchini v Bryson: (Denning’s judgement) – family arrangement, act of friendship or generosity will negate any intention to create a tenancy

• However – presumption is rebuttable: just because there is a family arrangement does not automatically mean there is no tenancy

• Nunn v Dalrymple: CA held that despite family arrangement there was intention to create legal relations – 5 factors: 1) Act (renovation work etc.) 2) Precise terms 3) Importance to parties 4) Lack of elements of generosity 5) Any other relevant conduct

• Heslop v Burns: A woman and her husband were provided with a cottage rent free as an act of generosity – no rent demanded and maintenance costs were paid by the benefactor – no intention to create a tenancy so the couple held it as licensees

• Foster v Robinson: Farmer allowed former employee to live rent-free for the rest of his life – daughter was unable to claim to be entitled to remain on his death, as it had been a mere license

• Westminster CC v Clarke: Westminster housed vulnerable men in a hostel – no intention to create a landlord-tenant relationship

2. There is a service occupancy

• This only arises where there is an employer/employee relationship between the landowner and occupier

• Test: a service occupancy will exist where the employee is required to live there for the better performance of their duties

  • Norris v Checksfield: lorry driver living near depot was necessary, so there was a licence

  • Royal Philanthropic v County: Teacher’s house was near to the school, but this was just a perk of the job and didn’t make her a better teacher, thus there was a lease

Exclusive possession and multiple occupancy

Distinction between:

1. Exclusive possession between occupants and landowner

2. Legal relationship between the occupants themselves

Possible scenarios:

1. Joint tenancy of whole premises

2. Individual tenancy of particular parts

3. Individual licenses

• To have one single lease, the occupants must have the four unities necessary for a joint tenancy (Possession, Interest, Time, Title)

  • If a joint tenancy is found then the tenants must be jointly and severally liable

  • If there is no joint tenancy then the tenants may have individual leases of their own part

  • If neither a joint tenancy nor an individual tenancy exists then the occupant can only be individual licencees

Two leading cases decided on the same day in the HL:

• AG Securities v Vaughhan:

  • 4 flat sharers (strangers)

  • There was no unity of time (separate times); no unity of interest (paid different rents); no unity of title (separate written documents)

• Antoniades v Villiers:

  • Signing of two separate documents to create illusion that there was no unity of title

  • All the other unities were present – ‘an air of total unreality’ – couple found to be joint tenants and were thus jointly and severally liable

• Mikeover v Brady:

  • Difficult to reconcile with Anoniades – held to be licences in similar circumstances – didn’t take social policy approach unlike decision in Anoniades

  • This case was actually decided on a different issue – over the payment of rent (agreements didn’t impose a joint liability to...