Land Law| Legal Estates in Land: Leaseholds
Leaseholds
Leasehold (term of years absolute) = created when one party with an estate in land grants temporary
rights to the other party to enjoy exclusive use of that land.
Lease = for a lesser term than the landlord has.
Leases can be used for residential, commercial and agricultural property.
It is important to distinguish a lease from a licence.
- Lease = proprietary right in land: s1(1)(b) LPA 1925
- Licence = personal right
LPA 1925
s1(1)(b) LPA 1925: leasehold = term of years absolute
s205(1)(xxvii) LPA 1925: ‘years’ includes a term of less than a year
Grantee: tenant/lessee/leaseholder
Terminology Grant: original creation of a lease
Leases are also Assignment: passing on/selling an existing lease
described as: Head lease: original lease out of which a sub-lease is made
- A tenancy: usually Reversion: the right that the landlord has after leasing a property
short term leases
- A demise
- A term of years
Grantor = landlord
Essential characteristics of a lease
- A lease must have:
1) Certainty of a term
2) Exclusive possession:
(Street v Mountford)
- Payment of rent is not essential (s205(1)(xxvii) LPA 1925), but it is a factor to take into account.
Certainty of term
- The estate must be held for a certain duration of time.
Fixed Term: maximum duration of the arrangement is known from the Periodic Term: arrangement
outset (Lace v Chantler). runs from period to period and
the period is automatically
renewed until a notice to quit is
- Once created, a fixed term lease cannot be terminated unilaterally by served.
either party.
- EXCEPTION: there is a break clause which allows such termination. Periodic terms can be:
1) Expressly stated in a written
Anstalt v Arnold: arrangement not for a fixed term, but the court held agreement,
that it was a lease because both parties had the ability to bring the 2) Implied by looking objectively
arrangement to an end, therefore the term was not uncertain. – has now at all relevant circumstances,
been overruled by the case below. including the acceptance of
rent payments on a periodic
Prudential Assurance v LRB: leased to tenant until the land was basis.
required for road widening – new freehold owners, had no rights to build
road and sent the lessee a notice to quit.
Leaseholds
Leasehold (term of years absolute) = created when one party with an estate in land grants temporary
rights to the other party to enjoy exclusive use of that land.
Lease = for a lesser term than the landlord has.
Leases can be used for residential, commercial and agricultural property.
It is important to distinguish a lease from a licence.
- Lease = proprietary right in land: s1(1)(b) LPA 1925
- Licence = personal right
LPA 1925
s1(1)(b) LPA 1925: leasehold = term of years absolute
s205(1)(xxvii) LPA 1925: ‘years’ includes a term of less than a year
Grantee: tenant/lessee/leaseholder
Terminology Grant: original creation of a lease
Leases are also Assignment: passing on/selling an existing lease
described as: Head lease: original lease out of which a sub-lease is made
- A tenancy: usually Reversion: the right that the landlord has after leasing a property
short term leases
- A demise
- A term of years
Grantor = landlord
Essential characteristics of a lease
- A lease must have:
1) Certainty of a term
2) Exclusive possession:
(Street v Mountford)
- Payment of rent is not essential (s205(1)(xxvii) LPA 1925), but it is a factor to take into account.
Certainty of term
- The estate must be held for a certain duration of time.
Fixed Term: maximum duration of the arrangement is known from the Periodic Term: arrangement
outset (Lace v Chantler). runs from period to period and
the period is automatically
renewed until a notice to quit is
- Once created, a fixed term lease cannot be terminated unilaterally by served.
either party.
- EXCEPTION: there is a break clause which allows such termination. Periodic terms can be:
1) Expressly stated in a written
Anstalt v Arnold: arrangement not for a fixed term, but the court held agreement,
that it was a lease because both parties had the ability to bring the 2) Implied by looking objectively
arrangement to an end, therefore the term was not uncertain. – has now at all relevant circumstances,
been overruled by the case below. including the acceptance of
rent payments on a periodic
Prudential Assurance v LRB: leased to tenant until the land was basis.
required for road widening – new freehold owners, had no rights to build
road and sent the lessee a notice to quit.
