Leases are recognised as an estate in land capable of subsisting in law or equity per s1(1)(b) LPA
1925.
Why are leases to be contrasted to licences?
Licences are mere personal interests over land that bind in personam (Thomas v Sorrell).
The distinction between a lease and a licence is important because leases confer tenants greater
security of tenure via multiple statutory protections such as the Landlord and Tenant Act 1988,
whereas a licensee is vulnerable to the whim of the licensor.
Lord Templeman's hallmarks of a lease
An occupier of premises is either a 'lodger' (i.e. licensee) or a tenant per Lord Templeman in
Street v Mountford. The three hallmarks of a lease are: Exclusive possession; Term certain; Rent.
Bruton lease
The Bruton lease is an exception to nemo dat non quod habet. A lease was found because of
Lord Templeman’s hallmarks being evident. However, the effect of the Bruton lease per Kay
was that it was merely binding on the grantor and not any third party.
Luba QC (1999) reflects that the Bruton lease veins conflict with his image of land law being a
tree, whereby if you cut the branch, with it falls the twig.
Formalities
An interest only appears in reality if it adheres to the required formalities.
• Leases for more than three years must be created by deed per s.52(1) LPA 1925. The
requirements of a deed are in s.1(2)-(3) LP(MP)A 1989.
• Leases for less than three years for rent and immediate possession can be created by deed
per s.52(1) LPA 1925; s.1(2)-(3) LP(MP)A 1989 or a contract in writing in accordance
with s2(1) LP(MP)A 1989.
Registration of a lease is only necessary should it be for a term of 7 years or more per
s.27(2)(b)(i) LRA 2002. Leases below 7 years take effect as overriding interests per
schedule 3 paragraph 1 LRA 2002.
Birks (1998) regards formality as one of his five keys that facilitate land law. For Birks,
adherence to formality provides certainty for third parties wanting to know what exists over the
land.
, Exclusive possession
Exclusive possession (cf. exclusive occupation) is the legal right enjoyed by a tenant to exclude
others (including the lessor) from their occupation of land.
Whether or not exclusive possession has been granted is a question of fact that goes beyond the
label given to the occupation agreement per Lord Templeman in Street v Mountford.
• A lessor retaining his own set of keys does not by themselves negate exclusive possession
per Lord Donaldson in Aslan v Murphy. What matters is why the key is retained. If the
keys are retained for essential repairs or emergency, this does not negate exclusive
possession. However, if the keys are retained for services like cleaning, tidying or the
provision of meals, the occupier is likely to not have been granted exclusive possession
since such services often require unrestricted access.
• A provision in an agreement that reserves a limited right of entry suggests that exclusive
possession has been otherwise granted per Lord Templeman in Street v Mountford.
• A provision that reserves a right of alternative accommodation is generally held to be a
sham, but for when the nature of the occupation suggests that it is reasonable for
exclusive possession to not be conferred (Westminster CC v Clarke re. transitory
accommodation for homeless).
• A provision that reserves the right for lessor to sleep on the sofa can be capable of
negating exclusive possession should it have the "air of reality" about it (AG Securities v
Vaughan). Occupiers in such an instance will have a licence over the common parts, and
will have to be satisfied with the limit that their lease is confided to their individual room.
• A bed-sit with its own amenities suggest a lease is conferred as opposed to a lodging
(Antoniades v Villiers).
• An almshouse residence with exclusive possession can be denied a lease since granting a
lease would be inconsistent with the object of charity per Watts v Stewart.
• Where occupation agreements concern two potential tenants of the same premise, joint
tenancy is to be considered per s1(6) LPA 1925. As to whether exclusive possession has
been conferred via joint tenancy, we look to whether the four unities per AG Securities v
Vaughan, Antoniades v Villiers.
1) Unity of possession? The agreements give each occupant a general right to exclusive
possession.
2) Unity of title? The agreements are interdependent to each other by concerning the
same premise.
3) Unity of time? The agreements date the parties to commence occupation at the same
time.
4) Unity of interest? The agreements state that the occupants are jointly liable for the rent
with their agreed terms being the same.
1925.
Why are leases to be contrasted to licences?
Licences are mere personal interests over land that bind in personam (Thomas v Sorrell).
The distinction between a lease and a licence is important because leases confer tenants greater
security of tenure via multiple statutory protections such as the Landlord and Tenant Act 1988,
whereas a licensee is vulnerable to the whim of the licensor.
Lord Templeman's hallmarks of a lease
An occupier of premises is either a 'lodger' (i.e. licensee) or a tenant per Lord Templeman in
Street v Mountford. The three hallmarks of a lease are: Exclusive possession; Term certain; Rent.
Bruton lease
The Bruton lease is an exception to nemo dat non quod habet. A lease was found because of
Lord Templeman’s hallmarks being evident. However, the effect of the Bruton lease per Kay
was that it was merely binding on the grantor and not any third party.
Luba QC (1999) reflects that the Bruton lease veins conflict with his image of land law being a
tree, whereby if you cut the branch, with it falls the twig.
Formalities
An interest only appears in reality if it adheres to the required formalities.
• Leases for more than three years must be created by deed per s.52(1) LPA 1925. The
requirements of a deed are in s.1(2)-(3) LP(MP)A 1989.
• Leases for less than three years for rent and immediate possession can be created by deed
per s.52(1) LPA 1925; s.1(2)-(3) LP(MP)A 1989 or a contract in writing in accordance
with s2(1) LP(MP)A 1989.
Registration of a lease is only necessary should it be for a term of 7 years or more per
s.27(2)(b)(i) LRA 2002. Leases below 7 years take effect as overriding interests per
schedule 3 paragraph 1 LRA 2002.
Birks (1998) regards formality as one of his five keys that facilitate land law. For Birks,
adherence to formality provides certainty for third parties wanting to know what exists over the
land.
, Exclusive possession
Exclusive possession (cf. exclusive occupation) is the legal right enjoyed by a tenant to exclude
others (including the lessor) from their occupation of land.
Whether or not exclusive possession has been granted is a question of fact that goes beyond the
label given to the occupation agreement per Lord Templeman in Street v Mountford.
• A lessor retaining his own set of keys does not by themselves negate exclusive possession
per Lord Donaldson in Aslan v Murphy. What matters is why the key is retained. If the
keys are retained for essential repairs or emergency, this does not negate exclusive
possession. However, if the keys are retained for services like cleaning, tidying or the
provision of meals, the occupier is likely to not have been granted exclusive possession
since such services often require unrestricted access.
• A provision in an agreement that reserves a limited right of entry suggests that exclusive
possession has been otherwise granted per Lord Templeman in Street v Mountford.
• A provision that reserves a right of alternative accommodation is generally held to be a
sham, but for when the nature of the occupation suggests that it is reasonable for
exclusive possession to not be conferred (Westminster CC v Clarke re. transitory
accommodation for homeless).
• A provision that reserves the right for lessor to sleep on the sofa can be capable of
negating exclusive possession should it have the "air of reality" about it (AG Securities v
Vaughan). Occupiers in such an instance will have a licence over the common parts, and
will have to be satisfied with the limit that their lease is confided to their individual room.
• A bed-sit with its own amenities suggest a lease is conferred as opposed to a lodging
(Antoniades v Villiers).
• An almshouse residence with exclusive possession can be denied a lease since granting a
lease would be inconsistent with the object of charity per Watts v Stewart.
• Where occupation agreements concern two potential tenants of the same premise, joint
tenancy is to be considered per s1(6) LPA 1925. As to whether exclusive possession has
been conferred via joint tenancy, we look to whether the four unities per AG Securities v
Vaughan, Antoniades v Villiers.
1) Unity of possession? The agreements give each occupant a general right to exclusive
possession.
2) Unity of title? The agreements are interdependent to each other by concerning the
same premise.
3) Unity of time? The agreements date the parties to commence occupation at the same
time.
4) Unity of interest? The agreements state that the occupants are jointly liable for the rent
with their agreed terms being the same.
