Fundamentals of Land Law: Lease of Land - Essay Example

 Title: Lease Abstract: A lease of land involves both proprietary and contractual rights for both the landlord and the tenant, and so is subject to contradictory pressures. In order to evaluate how rights and interests in land are acquired, protected and lost it is necessary to discuss creation of lease, protection of rights and interest and termination of lease. The protections afforded to tenants with regard to implied terms within leases are also being discussed. A lease has always been difficult to define and there is still no adequate definition even today. However, a lease of land involves both proprietary and contractual rights for both the landlord and the tenant. A tenant is the ‘owner’ of land, albeit temporarily and subject to restriction but equally he is a consumer contracting for the provision of ‘service’. In Bruton v London & Quadrant Housing Trust1, have upheld the existence of contractual, non-proprietary rights lease where the landlord has no proprietary estate from which to grant a proprietary lease. According to s 1(1)(b) of the Law of property Act 1925 a lease or a term of years absolute is a legal estate and is also a proprietary estate in land. S 1 (1) …the only estates in land, which are capable of subsisting or of being conveyed or created at law, are: (a) An estate in fee simple absolute in possession; (b) A term of years absolute; However, it must be created in the proper manner and it must satisfy the definition contained in LPA 1925 s. 205(1)(xxvii). The 1925 scheme was reformed in 1986 (Land Registration Act 1986) and again by the 2002 Act, which has been accused of introducing yet more confusion to the law of leases. There are 3 kinds of lease, legal lease, equitable lease and tenancies by estoppel. Legal lease created by deed, this includes periodic tenancies (LPA 1925 SS. 52, 54). Due to the doctrine of Walsh v Lonsdale2, a contract for a lease operates as an equitable lease without any further action being necessary. The LP (MP) A3 1989 s. 2 supersedes s. 40 of the LPA 1925. A tenancy by estopple operates where the landlord has no title to the land when a lease is granted. The LRA 2002 has made substantial changes to the formalities required for leases, most of which require registration or protection on the land register. Three types of lease are recognised by the 2002 Act: Leases requiring substantive registration: Leases requiring protection by a notice on the register. Short leases, which override the register. Most leases, which fall outside the scope of compulsory first registration, can be enforced either if protected by a notice on the register or if they fall within the overriding category. The ultimate aim is for as many interests as possible to be entered on the registered. But Leases of three years or shorter cannot be protected by notice and so are ‘only’ overriding. Short leases (not exceeding seven years) can override the register. Where the tenant is in actual occupation, this protects his Leases on first registration (Sched. 1 para. 2), or on a transfer either under the ‘old’ law (LRA 1925 s.70 (1)(g)) or the LRA 2002 (Sched. 3 para. 2). In Street v Mountford4, Lord Templeman suggested that there are three characteristics of a lease, these are exclusive possession, a determinate period, for a rent or other consideration. Exclusive possession means that the tenant has control over any one who enters the premises and can exclude everyone, including the landlord. There will be no exclusive possession if: the landlord is entitled to move the occupier at any time from one room to another according to Westminister city Council v Clarke5, there was held to be no exclusive possession. Someone merely has exclusive occupation, such as a hotel guest or a student in a university hall of residence or a resident in a nursing home (Abbeyfield) (Harpenden) Society Ltd v Woods6; In Marcou v De Silvesa7 the agreement required the landlord to provide services. There may be exclusive possession even if: In Aslan v Murphy 8 the landlord retains a set of keys. In Antoniades v Villiers9, were an unmarried couple living together had exclusive possession. An employer provides premises, so long as occupation is not better performance of the tenant’s job. In Fachini v Bryson10, was found to be a tenancy even though the parties referred to it as a licence. In Say v Smith11, where the other terms of the lease are clear, such as the details of the rent and length of the actual term, the lease will be fail without a date of commencement. The term must commence at the time certain and exist for a definite period Lace v Chantler12. In Prudential Assurance Co Ltd v London Residuary Body13, the judgement in this case criticised the result in Ashburn v Arnold14. If it were followed, the term would have been sufficiently certain because the defendants had the right to call for the determination of the lease. The maximum date of must be certain at the start of the lease according to Prudential Assurance case. Periodic tenancies are saved as each period is determined by the period for which rent is payable. Section 205(1) (xxvii) of LPA 1925 defines a lease as taking ‘whether or not at a rent’ and it is possible to create a rent-free lease according to Ingram v IRC15 and Ashburn v Arnold. However, the absence of rent usually indicates that the occupier occupies the property as a licensee rather than as a tenant. If rent is paid, it must be a fixed sum and not a fluctuating amount (Bostock v Bryant)16. The Terms In A Lease: Both the landlord and the tenant have obligations under the lease. These may be expressly or impliedly included in the lease, for example if the lease itself is implied such as an implied periodic tenancy then the covenants will be implied into that lease. There are a number of covenants, which are implied into every lease and most leases include a number of express covenants. There is implied into every lease a covenant by the landlord that the tenant shall enjoy quite enjoyment of the property. A number of covenants can be implied into the lease both at common law and also under statute. Implied covenants: A covenant to allow the tenant quiet enjoyment: It is implied in every lease that the landlord shall allow the tenant quite enjoyment of the premises let. A covenant that the landlord will not derogate from his grant: The general principle is that you must not take away that which you have given. So the landlord cannot take away from the tenant any rights that have been granted under the lease17. However tenant cannot claim if the landlord did not know about the tenants intended use of the land. A covenant that the premises are fit for the purpose for which they are let or are habitable: A Covenant To Allow The Tenant Quiet Enjoyment: It is implied in every lease that the landlord shall allow the tenant quiet enjoyment of the premises let. Ways Of Determining A Lease: Leases can be brought to an end in a number of different ways. Many of the old common-law means of ending a lease have been affected by the large number of statutory provision, which have been passed to protect tenants. There Are Nine Ways In Which A Lease Can Come To An End At Common Law: Notice to quit: either party can serve on the other a notice to quit, which will indicate that they no longer wish the tenancy to continue. Generally, the length of notice required is the same length as the period of the tenancy. Forfeiture: if the tenant is in breach of any covenants in the lease then the landlord may be entitled to forfeit the lease; the landlord has to decide whether the lease is continuing or whether he wishes to treat it as forfeited. Surrender: a lease can be determined by the surrender of the interest of the tenant to his immediate landlord. If the interest is expressly surrendered then it must be contained in a deed in order to comply with s 52(1) of the LPA 1925. Lord Millett in Barrett v Morgan 18 said that ‘a surrender is simply an assurance by which a lesser estate is yielded up to, and the term is usually applied to the giving up of a lease or tenancy before its expiration’. Disclaimer: a right to disclaim the lease usually arises under the lease itself or under statute. The most usual examples under statute occur when the trustees in bankruptcy and liquidators of companies disclaim what is termed onerous property, which they may have taken over in their role. The tenant would then be released from the tenant’s obligations. Expiry: a fixed term lease or tenancy will automatically end when the term comes to an end. Merger: if the tenant acquires the landlord s freehold interest then the tenancy will immediately come to an end. A break clause: some lease may contain a clause, which allows one party or even both parties to determine the lease on notice before the term expires. Frustration: where frustration operates on the lease it destroys the whole basis of the agreement and so the tenancy comes to an end according to (National Crriers Ltd v Panalpina Ltd)19. Repudiation: if there is a breach by either side that is sufficiently serious then the courts may allow the other party to repudiate the contract. However, the 2002 Act is very repetitive in the way it deals with leases, using similar but separate provisions relating to leases in compulsory first registration, grant of leases out of existing registered titles, and transfer of leases. This appears unnecessarily complex. Parliament and the courts have shown a disregard for the wishes of the parties20 to leases and have interfered to an unnecessary extent. Reference: 1. Dr Martin Dixon, Modern Land Law, 5th edition, (2005), Cavendish Publishing Limited. 2. Jacqueline Martin & Chris Turner, Unlocking Land Law, 1st edition, (2004), Hodder &Stoughton. pg. 390-431. 3. Gray & Gray, Elements of Land Law, 4th edition, (2004), Oxford University Press. 4. Margaret Wilkie & Peter Luxton, Land Law, 5th edition, (2005-2006), Oxford University Press. 5. Mark Thompson, Modern Land Law, 1st edition, (2004), Oxford University Press. Read More