The Fate of Alice and Peter According to Legal Principles - Essay Example

? Leases and Licences Case Study Jeffrey Marten owns a house at 29 Georgia Road, Georgetown. Jeffrey purchased the house in 2002. Three years later he married Alice, who moved into the property in 2005 and over the course of next few years invested a large amount of her savings in renovating of the property and converting the top floor into an apartment, which the couple could rent out. In 2010, Peter Taylor signed a lease agreement with Jeffrey, allowing Peter occupy the top floor flat for a period of five years. Peter travels a lot for business and so spends a number of months each year outside of the country. Currently, Jeffrey has found himself with financial constrains, and his marriage is being under increased strain. He thinks of selling the property and moving away in future. Two weeks ago, while his wife was away visiting his elderly mother and Peter was on a business trip, he found a buyer, David Matthews who was prepared to offer cash for quick sale. The Fate of Alice and Peter According to Legal Principles and Authorities A licence is a contractual right to use a property particularly land that would otherwise be illegal. Conversely, a lease is an interest of land that is given by the lesser to a lessee for a defined period of time while granting exclusive possession. In light of this, it is clear that Jeffrey has the legal rights over the property at Georgetown, and hence has title to the property. Needless to mention, Jeffrey is among the people who have indefeasibility of title. According to property law, this means that Jeffrey is included in the title as the owner who has an indefeasible or unquestionable title of the property. Besides, the state guarantees the correctness of the information contained on the title and is, therefore, liable to provide compensation under assurance fund. Thus, legal interests are solely concerned with ownership of property as in the case of Jeffrey who has control that is associated with the ownership.1 With this regard, it is entirely challenging for his wife Alice to claim any legal right for the property even though she is married to him. The fact that Alice moved into the property in 2005, and has continually spent a considerable amount of her savings in renovating the property to an extent of converting the top floor into an apartment, which Jeffrey later leases out to Peter, a businessman for five years, a situation that does not recognise her as an exclusive or shared possessor. Simply, Alice could only be recognised by Law, only if she was registered as one with ‘equitable interest’ to the property. This way Alice would be entitled to the benefits of the property. None the less, individuals with ‘equitable interests’ are not in a position to lay claims against an innocent third party who purchases the legal interest of the property. Apparently, the quick sale of the property of Jeffrey to Matthews leaves Alice with no right of ownership or claim for ownership even if she had ‘equitable interest’ for the property. Jeffrey then leases part of the property to Peter, an international businessman for a period of five years even though, Peter is an absentee lessee for a certain period of the year. According to Law, leasehold interest on the property is created by a formation of lease, which mainly comprises of lessor (Jeffrey) and lessee (Peter). A lease (Jeffrey) gives the lessee (Peter) exclusive possession of property for a specific period of time which in this case is five years in exchange for payment or rent. Of important note is that, a lease can be registered on the title, for a set period.2 This gives the right to sublet, assign or sell unexpired portion with the landlord’s consent, right to exclusive possession, over and above, the right to sue in case of trespass. Indeed, business that exist between Jeffery and Peter is recognised as leasing according to Property Law for the reason that it exceeds three years and therefore a deed is necessary to conform its validity. Additionally, the type of lease existing between Peter and Jeffrey revolves around exclusive possession of property by Jeffrey and periodic possession of the same property for Peter, over and above, having the requirement of a specific period of time, which according to the lease agreement indicates that Peter occupies the top floor apartment of the property for five years. In the lease agreement, details such as the sum of rent must be paid by Peter for the five years he will be occupying the apartment, the top floor as the space to be occupied by the lessee, the extent of the lease and frequency of rent review, as well as, the rights, obligations and liabilities of the lessor and the lessee mutually. It is worth noting that, before signing a lease, the lessee should negotiate with the lessor on the terms of lease that are favourable before the agreement commences.3 Currently, Jeffrey is undergoing some financial constrains with his marriage also experiencing increased strain to a point where he thinks of selling the property and moving to another place. Peter is away for business and the leasing agreement has only gone for three years meaning that he is still legally attached to the property under exclusive possession for another two years with or without renewal. In light of Jeffrey’s financial constrains, it is obvious that he will be enthusiastic to sell the property to Matthews through a quick sale. Never the less, it is crystal clear that part of the property does not entirely belong to him as the lease agreement is still valid for the next two years. Additionally, he has no consent from Peter suggesting that he has been allowed to sell the property to a third party who is Matthews. In case, Jeffrey decides to follow his heart and is able to convince, Matthews to buy the property, he will be left with the mandate of compensating Peter for dishonouring and terminating the lease agreement before the due time. In essence, the Law stipulates that if lessor breaks a lease agreement without the approval of the lessee, then he is liable to him or her for any or all expenses that will be incurred in search of new housing, over and above, any housing cost that the lessee will incur particularly if he is unable to find a suitable housing at the time of the termination. Besides, the lesser are also entitled to moving costs, utility set-up costs and deposits. Further, the Law indicates that if the lessee is unable to find housing that is equal or lower in terms of price for comparable accommodations, they are at liberty to hold the lessor responsible for the difference in cost between the current rental and the new rental property.4 Simply, Jeffrey is liable for the termination of the lease agreement. Hence, it is only advisable that upon the unexpected return of Peter from his business trip, Jeffrey offers to pay for moving cost and ‘buy him’ out of their lease agreement by offering a good amount of money to offset the cost Peter may incur as he searches for a new accommodation, a deal which is expensive but worth settling down such an agreement. Through this kind of arrangement, Jeffery will be able to sort out his financial constrains from the total cash he receives from Matthews after the sale of property, and the compensation he gives to Peter with regard to the breach of contract. In contrast, the latest owner of the property, Matthews will not have any challenge of ownership of property from Peter or Alice. First, Alice will not be able to challenge the sale of the property as there is no likely event that associates her with co-ownership of the property as stipulated in the law. The much effort she had put in renovation of the property by use of her own savings, and the fact that she is married to Jeffrey can only be regarded as free will to manage the property of Jeffrey. As it stands now, the property was bought by Jeffrey three years before he married Alice and as such was registered as exclusive possession of property for him and did not have transfer or co –ownership thereafter. Second, the only right that Peter had in relation to the property was through the lease agreement where he had exclusive possession of a part of the property for five years. Although the agreement was terminated abruptly by Jeffrey, after the five years the ownership would remain with Jeffrey as the lesser. In addition, the obligation of Jeffrey to compensate Peter for breach of contract and the expected consent from Peter upon compensation gives affirmation to Matthews that there will be no tussle of ownership of property. In the unlikely event that, Alice was at a point included in the ownership of the property, she automatically has the right to dispute the sale in court with reference to the new owner who is Matthews. Moreover, if Peter returns and does not consent to compensation from Jeffrey or Jeffrey is out of reach, which is to say that he has become a former property owner, he has the right to claim compensation for the remaining part of the agreement as it was stated in the legal contract.5 Thus, Matthew is safe from the wrath of Peter and Alice only if Jeffrey was the sole owner of the property with exclusive possession and he genuinely compensates Peter for breach of contract. Bibliography: MAKDISI, J and BOGART, D, Inside Property Law: What Matters and Why (New York: Aspen Publishers/Wolters Kluwer Law & Business, 2009). MATTEI, U, Basic Principles of Property Law: a Comparative Legal and Economic Introduction (Westport, Conn. [u.a.]: Greenwood Press, 2000). Read More