Land Law: Analysis of Agreement - Case Study Example

Land Law Is the agreement signed by Linford valid? The first issue that arises is whether the agreement signed by Linford is valid. The formality provisions that are spelt out for disposition of any kind of interest in property must be duly executed in writing with at least two witnesses present1. Therefore Linford’s agreement is not valid and will have to be re-executed. Another aspect to be considered is the fact that since Linford’s house proposes to house several occupants who are not related to each other, it must be duly registered and licensed as a HMO (House in Multiple Occupation)2. Moreover, the Housing Act of 2004 which has become operational since 6th April 2006 mandates certain minimum amenities in respect of the number of persons3. Hence if Linford’s house has only one bathroom and one WC and permits more than 4 occupants, it could be in violation of the Act and the local housing authority in Nottingham could restrict the number of occupants or impose other conditions. Clause (a) of the agreement allowing rights of occupation to multiple parties will therefore have to be amended or revised to ensure that it is in compliance with the requirements spelt out by the local Housing authority in Nottingham. If the number of occupiers in Linford’s house cannot be more than four in accordance with licensing requirements spelt out on par with available amenities, it may be illegal for Linford to permit more occupiers to live in the same premises. Repairs to the property: Local authorities in Nottingham could apply licensing requirements even for properties less than three storeys and occupied by less than five people, therefore Linford’s property could well qualify as an HMO4. Under the new licensing requirements for HMO’s, repairs to the property are to be carried out by the landlord to keep it suitable for multiple tenants. Moreover, the landlord is not allowed to evict tenants to keep their number below specified limits. Therefore, the clause (b) in the agreement requiring the students to carry out repairs – especially external repairs – can be contested by the students, since such repairs are the landlord’s duty under the new provisions of the Housing Act for HMOs. Does the agreement signed by Linford constitute a license or a lease? The question of determining whether an agreement is a license or a lease has traditionally been based upon the conferring of exclusive possession5 of the premises to the occupier, to the exclusion of the landlord and others6, which makes him a tenant under Part II under the Landlord and tenant Act of 1954. In this case however, Linford’s intent appears to be not to give exclusive possession which can be relevant in the context of tenancy rights7 and the question of determining possession is especially significant in the context of shared accommodation.8 In the case of Family Housing Association v James, the general rule existing in favor of a tenancy was reiterated. The question of the lease/license distinction was raised in the recent case of Bruton9 and the Court held that irrespective of the intention of the parties to create only a license, the occupier will have the status of a tenant if the right to exclusive possession is provided for a certain term. When the licensor has limited rights to enter the premises for certain defined purposes, the presumption of a tenancy is enhanced. Linford is permitted to enter the premises once a week to enter the building and empty rubbish and the students have exclusive possession of their individual bedrooms. Hence this agreement could qualify as a tenancy by applying the principles in Bruton. However, Bruton has been criticized10 on the grounds that the defendant was itself a licensee and therefore not in a position to confer exclusive rights to the tenant, but this will not apply in the students’ case because Linford is the owner of the property. Although he has expressly reserved other rooms to be sublet to other parties, nevertheless the exclusive possession of individual rooms for each of the four tenants and limited entry rights support a grant of tenancy. Does Linford’s agreement with the four students confer a shared tenancy? In the case of A.G. Securities v Vaughan/Antoniades v Villiers11 two separate appeals were filed where multiple occupiers were involved. In Vaughan, four occupants signed licenses with the licensor at different times for shared accommodation with common areas to be used by other lodgers. Since these agreements had been created at different times, the court concluded that the only right bestowed was that of using the premises and no tenancy was created. However in the case of Antoinades, where two occupants – a husband and wife – signed separate licenses for personal use of a flat, the Court held that despite the negating of exclusive possession in the agreement, it did confer a joint tenancy with exclusive possession. Therefore, applying these precedents, it may be noted that all the students have signed the license agreement concurrently and enjoy exclusive possession of their individual bedrooms. Therefore, it may be argued that individual tenancy in each bedroom is conferred upon the four students and a shared tenancy of the common areas. Disparities in rent could have undermined the unity of interest required to create a joint tenancy12, however since the students are each paying the same rent and for the same period of time, i.e, one year commencing from Sept 1, 2007, the unity of interest is preserved. On this basis therefore, the students could be advised to sign fresh agreements with Linford on the basis of shared tenancy, since the fact that they are sharing common areas is unlikely to affect statutory protections against eviction, etc that apply under the Rent Act of 1977 and the Housing Act of 2004. Determination of the Lease: Another aspect that supports the validity of a lease in this context is the fact that the certainty of term doctrine can be applied because the maximum period of the lease is specified13 to be one year. The case of Prudential Assurance Co Ltd v London residuary Body14 was significant15 because it exploded the certainty of term by pointing out that in some instances a periodic tenancy may still be valid when uncertainty exists, provided both parties agree on indeterminate time frames. However, the significance of this case in the context of the students’ agreement with Linford is that each party should have the right to terminate the lease. However, it must be noted that in Linford’s agreement, there is no provision for the students to terminate the lease if the landlord does not satisfy his part of the agreement. Therefore it cannot be held to be valid unless each party has the right by notice to quit, while in this case only Linford has the right to do so with two weeks notice. This principle is known as the doctrine of repugnancy which does not allow a total clampdown on one party’s right to issue notice to quit the premises.16 In this case, Whitford J held that a tenancy that was determinable only by the lessee was repugnant to the nature of a tenancy and therefore declared it void. Accordign to Clause (d) of Linford’s agreement with the individual students, the license is determinable only at licensor’s option and therefore the doctrine of repugnancy would apply in this case and this clause would have to be voided, since it is violative of the rights of one of the parties. Moreover, under the new protections afforded to licensees and tenants under the Housing Act of 2004, an occupier is protected from eviction and the students will be entitled to appeal to the Nottingham City Housing Council in the event that Linford attempts to evict them Advice: On the basis of the above, it must be stated that the license agreement signed by Linford is questionable in validity because its signature has not been witnessed. Moreover, its provisions are slated unfairly in favor the Linford and do not adequately protect the right of the students under the Housing Act of 2004 and the Landlord and Tenant Act of 1954. The question of whether this agreement can in fact be termed a license must also be questioned, since it appears to confer a joint shared tenancy for the four students by virtue of the limited entry rights of the licensor that are spelt out in the agreement and the exclusive possession allowed for individual bedrooms. Additionally, this property may have to be duly registered as an HMO and necessary licenses obtained from the local Housing Council, with maximum number of permissible occupants clarified before the students take it over. Hence the students are advised to enter into another agreement with Linford – one that is duly executed according to the formalities requirements, after licensing as an HMO. Moreover, the agreement should be signed on the basis of a shared tenancy rather than a license agreement. Furthermore, repairs will have to be set out as the responsibility of Linford and there must be provision made in the agreement for determination of the lease by either of the parties, with a duly specified notice period as mutually acceptable to the parties. Bibliography Cases: * A.G. Securities v Vaughan/Antoniades v Villiers (1990) 1 AC 417 * Bruton v London and Quadrant Housing Trust (2000) 1 AC 406 * Centaploy Ltd v Matlodge Ltd (1974) Ch 1 * Lace v Chantler (1944) KB 368 * Marchant v Charters [1977] 1 W.L.R. 1181 * Mikeover Ltd v Brady (1989) 3 All ER 618 * Prudential Assurance Co Ltd v London residuary Body (1992) 3 WLR 279 * Street v Muntford (1985) AC 809 * Westminster C.C. v Clarke [1992] 2 A.C. Journal Articles: * Biles, M, 1994. “One thing is certain and the rest is lies” New Law Journal, 156 * Hill, J, 1989. “Shared possession and exclusive licenses” Modern Law review 408 * Pawlowski, M and Greer S, 2000. “Leases, licenses and contractual tenancies.” 9(1), Nottingham Law Journal 85 * “What is a House in Multiple occupation?” [online] available at: http://www.communities.gov.uk/index.asp?id=1164086 Legislation: * Housing Act 2004 – Implementation [online] available at: http://www.communities.gov.uk/pub/316/HousingAct2004ImplementationLettertoStakeholders_id1165316.pdf * Rent Act of 1977 * Section 53(1) of the Land and Property Act of 1925 Read More