License as a Personal Right Incapable of Binding Third Parties - Outline Example

1) To analyse the validity of the ment, “A licence is a personal right incapable of binding third parties”, it is important to make references to some literature. A licence is an informal agreement between say a landlord and an occupier of the land. The only problem in this kind of agreement is that the occupier is not protected by lease agreement legislation because the occupier has not expressed “an interest in the land”, hence the personal (property) right is always in the control of the landlord, and he or she could revoke it anytime (Netlawman, 2011). In Ashburn Anstalt v Arnold (1989), Fox LJ’s judgment confirms that based on principle, licences do not indicate “tenancy interest or interest in the land” on the part of the licencee; therefore, they cannot bind third parties as a result of this (Dixon, 2011). On the other hand, when a piece of land is given out as a lease, the landlord does not have the power to terminate the occupancy of the land on short notice (Netlawman, 2011). This means that tenant has the right of occupancy until the period of lease elapses. However, in Ashburn Anstalt v Arnold, it is clear that when a tenant is expected not to pay a rent, there is not legal relationship between him/her and the landlord. The landlord holds the licence, which he or she can revoke at anytime. And when this happens, the tenant has no power to challenge this decision in court because there has been no legal agreement between the landlord and him/her. Invariably, the tenant has not expressed interest in the occupancy of the accommodation and hence could not claim any damages due to the revocation of the licence by the landlord. On the other hand, a tenant would show his or her interest in an accommodation by entering into a legal agreement. 2 (2i) For the flat Andrew rent out to Beth, Catherine and Daniel, he created an interest of collective leasees in them, meaning that if he decides to sell his freehold to the flats, Beth, Catherine and Daniel have to buy the flats and become collective landlords. Even though it was just an oral agreement, they have the right to stay in the accommodation for the length of time agreed upon in the terms of tenancy which, in this case, is two years. Oral agreements are as binding as the written ones; but since court require believable pieces of evidence, it may be difficult to prove in court that an agreement has truly been entered into between the landlord and the tenant (Williston and Lord, 1999). In other words, it will be impossible for Andrew to terminate their tenancy before the two years have elapsed. However, since it is an oral agreement which may be difficult to enforce in the absence of concrete evidence, Andrew could make an attempt whatsoever to terminate their tenancy early; and he may be lucky that Beth, Catherine and Daniel may decide not to pursue the case again him for lack of concrete evidence to tender at the court. In Gilbert Steel Ltd. v University Const. Ltd. (1976), there is a demonstration of how verbal or oral agreement may not be regarded as viable legal relationship. An oral agreement was reached in the course of a construction project, but the court struck out the agreement because it did not have the power to replace the written agreement that was previously agreed upon by the two parties. This supports the fact that an oral agreement, somehow, may still be regarded as invalid in a court. 3 (2ii) Andrew has created an interest of joint-leasee in his three tenants when he decided to let the flats out to Ethan, Fred and Gareth. If he sells his freehold of the flats, the three tenants automatically become the joint landlords. Hence, they would have to take care of the flats’ management, upkeep and insurance. However, the written agreement between Andrew and Ethan, Fred and Gareth are binding, and the tenants should be allowed to enjoy the occupancy of the accommodation for eight years as stipulated in the written tenancy agreement. Therefore, it will be impossible for Andrew to terminate the tenancy early because his tenants have in their possession the concrete evidence to fight the case against him in court. More so, there are no implied terms in the written agreements that provide any opportunities for Andrew to terminate the tenancy agreement. Normally, some contracts are full of implied terms that grant the landlords some rights to call for the eviction of the tenants when it appeared that the tenants have broken some of the agreements (Furmston and Poole, 2008). Similarly, by law, Andrew has the right of carrying out some repairs in his property. So, he is free to periodically inspect the structure and exterior of the premises, including drains, gutters and external pipes; he can also check the water and gas pipes and electric wiring (including, for example, taps and sockets); it is also his duty to repair the basins, sinks, baths and toilets fixed heaters (for example, gas fires) and water heaters (but not gas or electric cookers) (Citizens Advice, 2011). But he stops to carry out these functions as soon as he transfers the freehold of the flats to them through the sale of the flats. 4 (2iii) Andrew has created in Henry an interest of a leasee. If he decides to sell off his freehold of the flats, Henry has the right to buy it and become the landlord. Hence, according to the terms of the lease, Henry has the right to stay in the accommodation Andrew had let to him for four years without any interruption (Barclay, 2011). However, both Andrew and Henry agreed on including the “break clause” in favour of the landlord which gives Andrew the right to terminate the lease early in case Henry rears a pet in the accommodation (Mulcahy and Tillotson, 2004). Naturally, the implied term here gives the landlord some legal framework to end a tenancy agreement before the ending date. Courts may strike out the implied term if one of the parties claim to have been deceived into the agreement without the clear understanding of what it entails (Karp et al., 2003). And according to this scenario, Henry has a dog; based on this breach of agreement, Andrew has got the right to terminate his previous agreement with Henry and calls for his early eviction (Bien and Griswold, 2006). The court may strike out this clause from the agreement if Henry has enough evidence to prove that he had had no clear understanding of the agreement before signing it (Hodgkinson, 2008). Normally, it is a serious offence in the United Kingdom to breach any term of a tenancy agreement. The Landlord and Tenant Act 1985 give the landlord under this circumstance to terminate the existing contract as result of the tenant’s disrespect for the agreement. 5 References Barclay, L., 2011. UK law and your right for dummies. Indianapolis, IN: For Dummies. Citizens Advice, 2011. Renting from a private landlord, Citizens Advice Bureau. [Online] Available at: Bien, M., and Griswold, R., 2006. Renting out your property for dummies. London: John Wiley and Sons. Dixon, M., 2011. Modern land law. London: Taylor & Francis. Furmston, M., and Poole, J., 2008. Contract formation: law and practice. Oxford: Oxford University Press. Hodgkinson, L., 2008. The complete guide to letting property: including information on buy-to-let, HIPS, and tenancy deposit schemes. London: Kogan Page Publishers. Karp, J., Klayman, E.I., and Gibson, F., 2003. Real estate law. La Crosse, WI* Dearborn Real Estate. Mulcahy, L., and Tillotson, J., 2004. Contract law in perspective. London: Routledge. Netlawman, 2011. Lease or licence—which do I need? Netlawman. [Online] Available at: [Accessed 8 August 2011]. 6 Williston, S., and Lord, R.A., 1999. A treatise on the law of contracts, volume 9. Eagan, MN: Lawyers Cooperative Publishing. Read More