Lecture 4 and 5 Leases and Licences – OMSSDCT
Oliver – Brutin has control and practical needs
McFarlene tenancy is a properitary right
Sarah fox – capping right
Susan Bright- street v mountford simple, parties intention, block sham -SIB
Dixon – lacks properitary interest, nemo qat should be apply and should be a licence not a
lease , blurs distinction – PNB
Cooper v lees – land reg
Thomas Allen – Art. 8
A lease (or tenancy) is a legal estate in land, provided it meets the requirements under
section 1(1)(b) of (LPA 1925). This section states that the only estates capable of existing at
law are:
Fee simple absolute in possession (freehold) Fee simple absolute in possession (freehold)
means full ownership of land that lasts forever.
(B) Term of years absolute (leasehold) term of years absolute (leasehold) means you have
the right to use or live on land for a set period of time.- this is for leases
When is a Lease Equitable? A lease will only be equitable if:
1.It does not comply with the necessary legal formalities (e.g., it is not created by deed
when required under s. 52(1) LPA 1925).
2.It is an agreement to lease rather than an actual lease (e.g., under the doctrine of Walsh v
Lonsdale (1882), where equity treats as done that which ought to be done).
Key Distinctions: Legal leases bind third parties automatically. Equitable leases only bind
third parties if they are registered or subject to actual notice under equitable principles.
• Actual notice is direct knowledge.
• Constructive notice – person should investigate.
• Imputed notice is knowledge through their agents.
Lease or Licence? Why Does the Distinction Matter? The distinction between a lease and a
licence is crucial because it determines the extent of a person’s rights over a property.
A lease creates an estate in land and gives the tenant exclusive possession for a fixed term. It
is a legal estate under s.1(1)(b) LPA 1925. A lease creates a proprietary interest in land.
, A licence is merely a personal permission to occupy land, creating a personal right rather
than a right in rem. It does not grant exclusive possession or a proprietary interest.
Why the Distinction Matters:
1.Security of Tenure – A tenant under a lease has statutory protections (e.g., the Landlord
and Tenant Act 1954). A licensee can generally be evicted more easily.
2.Binding Third Parties – A lease can be assigned and may bind future owners. A licence is
usually personal and does not bind successors in title.
3.Eviction – A tenant can only be evicted following proper legal procedures. A licensee may
be removed more easily unless protected by a contractual right.
: Errington v Errington & Woods [1952] 1 KB 290 (CA) Facts: Errington v Errington & Woods
[1952] 1 KB 290 (CA)
Facts: Mr. Errington bought a house for his son and daughter-in-law, Mrs. Errington, and
told them they could live there as long as they paid the mortgage installments. After Mr.
Errington died, his widow (Mrs. Woods) sought possession of the house. The son moved
out, but Mrs. Errington remained and continued paying the mortgage.Held: The Court of
Appeal ruled in favor of Mrs. Errington. The court held that she had a contractual licence to
stay in the property, provided she kept up the mortgage payments. This licence could not be
revoked arbitrarily because it was tied to her ongoing obligation. However, the court
confirmed that she did not have a proprietary interest such as a lease or equitable interest.
Types of Licences: Bare Licence – A simple permission to enter land, revocable at will (e.g., a
guest in a house).
Contractual Licence – A licence supported by a contract, which may limit the licensor’s right
to revoke it (as in Errington v Errington & Woods).
What is a Lease? A lease is defined in s.205(1)(xxvii) of the Law of Property Act 1925 as a
“term of years absolute.”
: Street v Mountford [1985] AC 809 Facts: Street granted Mountford a written agreement
allowing her to occupy a property at a rent. The agreement expressly stated it was a licence,
not a lease. Street retained only limited rights of inspection and did not provide attendance
or services. The issue was whether Mountford had a lease despite the agreement stating it
was a licence. Held: The House of Lords ruled in favor of Mountford, holding that she had a
lease, not a licence. The court found that a residential occupier who has exclusive
possession, for a term, at a rent, is a tenant—regardless of what the agreement calls it. Lord
Templeman famously stated: If something works like a fork, it’s a fork — even if you call it a
spade.This means that calling an agreement a licence does not prevent it from being a lease
if it meets the legal criteria.
Key Principles from Street v Mountford: A lease exists if:
Oliver – Brutin has control and practical needs
McFarlene tenancy is a properitary right
Sarah fox – capping right
Susan Bright- street v mountford simple, parties intention, block sham -SIB
Dixon – lacks properitary interest, nemo qat should be apply and should be a licence not a
lease , blurs distinction – PNB
Cooper v lees – land reg
Thomas Allen – Art. 8
A lease (or tenancy) is a legal estate in land, provided it meets the requirements under
section 1(1)(b) of (LPA 1925). This section states that the only estates capable of existing at
law are:
Fee simple absolute in possession (freehold) Fee simple absolute in possession (freehold)
means full ownership of land that lasts forever.
(B) Term of years absolute (leasehold) term of years absolute (leasehold) means you have
the right to use or live on land for a set period of time.- this is for leases
When is a Lease Equitable? A lease will only be equitable if:
1.It does not comply with the necessary legal formalities (e.g., it is not created by deed
when required under s. 52(1) LPA 1925).
2.It is an agreement to lease rather than an actual lease (e.g., under the doctrine of Walsh v
Lonsdale (1882), where equity treats as done that which ought to be done).
Key Distinctions: Legal leases bind third parties automatically. Equitable leases only bind
third parties if they are registered or subject to actual notice under equitable principles.
• Actual notice is direct knowledge.
• Constructive notice – person should investigate.
• Imputed notice is knowledge through their agents.
Lease or Licence? Why Does the Distinction Matter? The distinction between a lease and a
licence is crucial because it determines the extent of a person’s rights over a property.
A lease creates an estate in land and gives the tenant exclusive possession for a fixed term. It
is a legal estate under s.1(1)(b) LPA 1925. A lease creates a proprietary interest in land.
, A licence is merely a personal permission to occupy land, creating a personal right rather
than a right in rem. It does not grant exclusive possession or a proprietary interest.
Why the Distinction Matters:
1.Security of Tenure – A tenant under a lease has statutory protections (e.g., the Landlord
and Tenant Act 1954). A licensee can generally be evicted more easily.
2.Binding Third Parties – A lease can be assigned and may bind future owners. A licence is
usually personal and does not bind successors in title.
3.Eviction – A tenant can only be evicted following proper legal procedures. A licensee may
be removed more easily unless protected by a contractual right.
: Errington v Errington & Woods [1952] 1 KB 290 (CA) Facts: Errington v Errington & Woods
[1952] 1 KB 290 (CA)
Facts: Mr. Errington bought a house for his son and daughter-in-law, Mrs. Errington, and
told them they could live there as long as they paid the mortgage installments. After Mr.
Errington died, his widow (Mrs. Woods) sought possession of the house. The son moved
out, but Mrs. Errington remained and continued paying the mortgage.Held: The Court of
Appeal ruled in favor of Mrs. Errington. The court held that she had a contractual licence to
stay in the property, provided she kept up the mortgage payments. This licence could not be
revoked arbitrarily because it was tied to her ongoing obligation. However, the court
confirmed that she did not have a proprietary interest such as a lease or equitable interest.
Types of Licences: Bare Licence – A simple permission to enter land, revocable at will (e.g., a
guest in a house).
Contractual Licence – A licence supported by a contract, which may limit the licensor’s right
to revoke it (as in Errington v Errington & Woods).
What is a Lease? A lease is defined in s.205(1)(xxvii) of the Law of Property Act 1925 as a
“term of years absolute.”
: Street v Mountford [1985] AC 809 Facts: Street granted Mountford a written agreement
allowing her to occupy a property at a rent. The agreement expressly stated it was a licence,
not a lease. Street retained only limited rights of inspection and did not provide attendance
or services. The issue was whether Mountford had a lease despite the agreement stating it
was a licence. Held: The House of Lords ruled in favor of Mountford, holding that she had a
lease, not a licence. The court found that a residential occupier who has exclusive
possession, for a term, at a rent, is a tenant—regardless of what the agreement calls it. Lord
Templeman famously stated: If something works like a fork, it’s a fork — even if you call it a
spade.This means that calling an agreement a licence does not prevent it from being a lease
if it meets the legal criteria.
Key Principles from Street v Mountford: A lease exists if:
