#16150 - Leases - Land Law

Textbook 4

Title 1: Characteristics of leases 4

Chapter 1: Exclusive possession 5

Section I – The role of exclusive possession 5

Section II – The Common Law Genesis of Exclusive Possession Rule 5

Para I – Traditional Common Law Position 5

Para II – Increased Importance with Regulation of Landlord/Tenant Relationship 5

Para III – Street v Mountford 5

Section III – The characteristics of exclusive possession 7

Para I - Cases that negate exclusive possession 7

Para II – Cases that are not obstacles to exclusive possession 7

Para III - Cases of exclusive possession but no tenancy 8

Para IV – Special case: joint occupiers 8

Chapter 2: Certainties 10

Section I – Certainty of commencement 10

Section II – Certainty of duration 10

Para I – Caselaw up to Prudential Assurance 10

Para II - Academic debate 11

Para III – Berrisford v Mexfield 11

Para IV – Periodic tenancies 11

Para V – Fate of leases that fail for indeterminate duration 11

Section 3: Certainty of Rent 12

Title 2: Significance of the Lease/License distinction 12

Title 3: Types of leases 13

Chapter 1: Fixed-term leases 13

Chapter 2: Periodic leases 13

Chapter 3: Tenancy at will 13

Chapter 4: Tenancy at sufferance 14

Chapter 5: Leases for life 14

Chapter 6: Perpetually renewable leases 14

Chapter 7: Tenancy by estoppel 14

Section I – Genesis: Bruton v London and Quadrant Housing Trust 14

Section II – Academic commentary 14

Section III – Subsequent caselaw applications 14

Chapter 8: Equitable lease 15

Cases 16

Leases: Contract or Property 16

Bright, 'Repudiating a Lease—Contract Rules'[1993] Conv 71 (Comment on Hussein) 16

Happum, Leases as Contracts [1993] CLJ 212 (Comment on Hussein v Mehlman) 17

Hammersmith and Fulham LBC v Monk (HL) 17

Sims v Dacorum BC [2015] AC 1336 18

Crawley BC v Ure (CA) 18

Bruton v London Quadrant Housing Trust (HL) 18

Bright, Leases, exclusive possession and estates (Comment on Bruton) 20

Roberts, The Bruton Tenancy, A matter of relativity (Comment on Bruton) 21

Dixon 'The non-proprietary lease: the rise of the feudal phoenix'2000 CLJ59(1)25 23

cf Harwood, Leases: are they still not real? (2001) 20 LS 503 at pp 511-513 24

Kay v Lambeth LBC [2006] 2 AC 465 at [143] – [144] 24

Exclusive Possession, rent and term 24

LPA 1925 s 149(3) 24

Clore v Theatrical Properties 24

Street v Mountford (HL) 25

Aslan v Murphy (CA) 26

Huwyler v Ruddy 27

Hadjiloucas v Crean 27

AG Securities v Vaughan 28

Ashburn anstalt v arnold 30

Bankway v Dunsford (NOL) 31

Hilton v Plustitle 31

Stribling v Wickham 32

Mikeover v Brady 33

Westminster CC v Clarke 34

Cowan, Lease/License distinction: Changing emphasis? [1993] Conv 157 34

Stewart v Watts [2017] 2 W.L.R. 1107, [26]-[39] 34

Prudential v London Residuary Body 35

Sparkes, Certainty of Leasehold Terms (1993) 109 LQR 93 36

Bright, Uncertainty in Leases - Is it a Vice? (Comment on Prudential) 37

Wilde, Certainty of Leasehold Term (Comment on Prudential) 39

Mexfield Housing v Berrisford 40

Bright, The Uncertainty of Certainty in Leases 128 LQR 337 43

Low, Certainty of Terms and Leases: Curiouser and Curiouser 75 MLR 401 43

P F Smith, What is wrong with Certainty in Leases? (Comment on Prudential) 44

Southward Housing v Walker (Ch Div) 45

Types of lease 46

Javad v Aqil 46

LPA 1925 s149(6) 46

LPA 1922 s145 47

Creation of leases 47

Long v Tower Hamlets LBC 47

Martin v Smith (1874) L.R. 9 Exch. 50 47

Tottenham Hotspur v Princegrove Publishers (NOL) 47

Coatsworth v Johnson (1886) 55 L.J. Q.B. 220 48

Gardner (1987) 7 OJLS 60 48

Articles 49

Hill, Intention and the Creation of Proprietary Rights 49

Large variety of leases to cover many practical situations:

• 999-year lease for a substantial capital sum (premium/fine) + nominal rent – almost identical in economic effect to a fee simple, but covenants are more easily enforced

• 99-year lease with mixture of rent and premium – useful for landlords who foresee the need to redevelop site

• 10-year lease of shop premises at full rent – an ordinary lease

• Weekly (monthly, yearly) lease (aka periodic tenancy) – each party can terminate with a week’s notice, highly flexible

Tenants are better protected than licensees: first question = is there a tenancy at all?

Issue determined by looking at the true nature of the agreement rather than the name given by parties: “Both parties enjoyed freedom to contract or not and both parties exercised that freedom by contracting on the terms set forth in the written agreement and on no other terms. But the consequences in law of the agreement, once concluded, can only be determined by consideration of the effect of the agreement. If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect of the agreement by insisting that they only created a license.” (Lord Templeman, Street v Mountford).

Affirmed: “the fact that the parties use language more appropriate to a different kind of agreement, such as a license, is irrelevant if upon its true construction it has the identifying characteristics of a lease.” (Lord Hoffmann, Bruton v London and Quadrant Housing)

However: “a cat does not become a dog because the parties have agreed to call it a dog. But in deciding if it is a cat or a dog the parties’ agreement that it is a dog may not be entirely irrelevant” (Bingham LJ, Antoniades v Villiers).

And: “resolution of the issue whether an occupier is a licensee or a tenant is not necessarily determined by the labels or language used by the parties. It turns on the intention of the parties having regard to all the admissible evidence.” (Sir Etherton, Stewart v Watts)

Leases, or “terms of years absolute” under the LPA 1925, is one of the two “only estates in land which are capable of subsisting or of being conveyed or created in law” (s1(1) LPA 1925).

Historically it was a contractual right (damages, no recovery of land), but was eventually recognized as a proprietary right, so much so that a lease of over 7 years qualifies as a registrable interest and must be compulsorily registered or will lose its status as a legal estate and only qualify as a contract to grant a legal lease (s4, 27 LRA 2002).

No adequate statutory definition of leases. For a time, the parties’ intention determined whether it was a lease or license; today:

• Street v Mountford (1985): “the traditional view that the grant of exclusive possession for a term at a rent creates a tenancy is consistent with the elevation of a tenancy into an estate in land. The tenant possessing exclusive possession is able to exercise the rights of an owner in land [keep out strangers and the landlord except when the landlord is exercising limited rights reserved to him by the tenancy agreement], which is in the real sense his albeit temporarily and subject to certain restrictions.” (Lord Templeman)

Street v Mountford: agreement for furnished accommodation called “license agreement”, paying a “license fee”, but with exclusive possession. Signed statement at the end of the agreement that tenant/licensee agreed that it “does not and is not intended to give me a tenancy protected under the Rents Act”. Is she protected under the Rents Act?

Lord Templeman identifies three characteristics/indications of leases:

• Exclusive Possession (Chapter I)

• Certainty of Term (Chapter II, Section I)

• Rent (Chapter II, Section II)

It’s the conclusive feature of a lease without which there can only be a personal right (license). “There can be no tenancy unless the occupier enjoys exclusive possession but an occupier who enjoys exclusive possession is not necessarily a tenant. He may be owner in fee simple, a trespasser, a mortgagee in possession, an object of charity or a service occupier” (Lord Templeman, Street v Mountford).

Clore v Theatrical Properties: Lessee had right to sell refreshments and programmes at a theatre, and to manage cloakrooms. The word “lease” was used in the agreement, which provided for “free and exclusive use” of the rooms for the purpose of supply to and accommodation of visitors and no other purpose.

Held that it wasn’t a lease but a license to enter for specified purpose. The fact that the right was exclusive (no competition) was insufficient to make it a lease.

• Lord Wright follows Rigby LJ in Daly v Edwards, where he decides that on a natural reading the agreement seems to confer a lease, but upon careful reading the intention of the parties seems to be to confer a license.

• Romer LJ reaches the same conclusion, but regretfully because he thinks that there are obvious differences between the present case and Daley v Edwards: the word ‘lease’ was not used in that case; what was purported to have been granted was a license. But nothing in law is capable of conferring a right amounting to a lease.

• Is exclusive possession conclusive of landlord/tenant relationship?

  • Possession by freehold estate or without permission (adverse possession) are obviously not, but otherwise common law finds a tenancy whenever there was exclusive possession (Glenwood v Phillips) even where there was no rent (eg. purchaser who was permitted to occupy before completion was a tenant at will (Tomes v Chamberlaine) as is a relative permitted to live in a house (Groves v Groves))

  • Traditionally lease vs license distinction doesn’t matter to the parties, but rather in other contexts such as liability for certain taxes...