This document contains the law required to answer questions relating to leases and licenses. Reference is made to the requirements to distinguish between a lease or license and the court's approach.
Characteristics of a Lease LEASES Examining ‘exclusive possession’
S.1(1)LPA 2915: A Lease is capable of Daily Services
being a Legal Estate (if 3 req satisfied) Street v Mountford: The occupier is a lodger if the landlord
Proprietary Right – alienable (sold/rent)
Relationship is contractual provides services which requires his servants to exercise
unrestricted access to & use of the premises
Landlord retains freehold reversion
Distinction between Leases and Licences Retention of Keys
Significant statutory protection
Aslan v Murphy: Retention of Keys by the Grantor does not
3 Essential Requirement of a Lease – negate the existence of a Lease
Street v Mountford
1. Estate must be of a Duration permitted: must be
LEASE LICENCE - Unless retained to carry out daily services
Proprietary right Personal Right that Sole Occupancy
fixed or periodic with an identifiable time: Only have to determine the person’s relationship with that
× Lease for life Alienable (sold, given cannot be assigned
away, left by will) Does not bind property and what is intended
(auto converts to 90years) Marchant v Charters: Was it intended that the occupier
× An uncertain period Binds 3P purchasers purchasers, unless in
should have a stake in the room, or only a permission for
× Perpetually renewable lease of the Landlord’s cases of Proprietary
himself to occupy the room? – Lord Denning
(converts to 2000years) reversion estoppel or
Shared Accommodation
2. Grant must give Exclusive Possession Protection by Statute: Constructive trust Also determine the relationship between the people
Distinguishes between Lease from a Licence subject to security of Licences generally who rented the property
3. Grant must have correct formalities tenure legislations outside the scope of Helpful to examine if the 4 unities are present
Legal (deed) or Equitable? (writing) (Rent Acts etc) such legislation Lord Templemen on Somma v Hazel Hurts
* Calling a lease a licence does not make it a licence! OTF of Somma, couple signed separate agreement (no
unity of interests) and were not jointly and severally
2. Exclusive possession liable. Agreement also indicated that a new person
Key distinction to Leases and Licences may be introduced.
1. Duration permitted for Leases Street v Mountford: Whether a transaction is a lease or BUT: examining the relationship between the couple
Fixed Termed Leases a licence depends entirely on whether there is and the property, it is clear that they wanted to live by
Duration must be certain and identifiable themselves and would only rent the property tgt
exclusive possession, and the label attached to the
Lace v Chantler: Lease for the ‘Duration of War’ is not Therefore the separate licenses were a sham
transaction is irrelevant
transaction to avoid the responsibilities imposed
permitted Factual Matrix Test upon the Landlord if it was a JT.
Note: One may agree on a lease for ‘x’ amount of years, Examine relationship between the parties * Living arrangements are important, but not necessarily
and include a ‘forfeiture clause’ - on what basis did they rent the property for? decisive
(e.g. when war ends.. lease comes to an end) - what is their relationship? (husband and wife?) AG Securities Ltd v Vaughan
Periodic Tenancies Nature and extent of the property 4 bedroom flat – individual agreements with different
May continue indefinitely until terminate by either Intended and Actual use of property rent paid & different period of occupation
parties (with appropriate notice) Real control retained by the Landlord Landlord direct from start with nature of property
Can be weekly, monthly, or yearly Subjective intentions of parties broadly irrelevant Held: genuine independent agreements which reflected
Period of Notice for termination (prima facie) Q: Has the grantee been given general control of the the de facto situation – indeed licenses
corresponds to the period for payment (monthly Property? Wells v Kingston upon Hull Antoniades v Villers
payment = min 1 month notice) Q: Is he allowed to exclude all others, including the Identical to Somma, but two bedrooms instead of 1
Yearly payments – only 6 months notice period Landlord, from the property? Co-habitating couple only occupying 1 room
Parties may shorten period of notice, but not Sham transactions & False Labels Held: The two agreements between the couple should be
extend it Landlords may refer to Tenants as Licensees to avoid read together, & as contracts interdependent upon each
Prudential Assurance v London Residuary obligations under the Housing Act and Rent Acts other (either both sign or non would; if one stops paying,
HOL: Parties may not restrict their Right to terminate - Therefore subjective intentions & labels irrelevant the other would step in)
Tenancy by giving reasonable notice Purposive approach – unrealistic to introduce 3P in a
quasi-marital relationship even with a second bedroom.
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