A lease (also known as a tenancy) is a grant by a landlord to a tenant for the right to use land, usually for a specified period of time and in exchange for the payment of rent. This article covers important UK law cases where the courts established the elements of a lease.
A party, in exchange for selling his lease, was given permission to occupy certain premises rent-free for an indefinite period of time, until when he was given notice to leave the premises. The court held that this arrangement amounted to a tenancy, explaining that rent was not necessary to create a lease.
A prospective tenant was allowed to move into a property in exchange for 3 months’ rent. To avoid being evicted once negotiations fell through, the occupier argued that a periodic tenancy had arisen. A periodic tenancy is one which extends automatically from one period to another, unless either party gives notice to terminate. The court found no periodic tenancy because the parties hadn’t reached agreement on the basis for the occupation, other than anticipating the grant of a lease. Paying rent was thus not conclusive of a periodic tenancy.
A lease for a strip of land was granted until such time as the land would be needed to widen a nearby road. The courts held that this lease was void because leases must be for a definite or determinable period of time. However, since the tenant paid rent yearly, the court held the arrangement to be a yearly periodic tenancy. Therefore, a grant for an uncertain term (one without a maximum duration) doesn’t create a lease. Periodic tenancies work because the maximum period is certain at any point in time.
A housing association and a tenant entered into a contract for the latter to live at a property “from month to month until determined”. While this looked like a monthly periodic tenancy, the terms of the contract suggested that the parties had not intended and thus failed to create a periodic tenancy. In a move that has been described as ingenious, the court relied on old case law to claim that as long as there was no consideration, section 149(3) of the Law of Property Act 1925 had converted the agreement into a lease for 90 years terminable when the tenant died or stopped paying rent.
In order to seem like a lodger, an occupier of a basement room needed to vacate the premises for 90 minutes every day so the landlord could allegedly enter and clean the room. The court realised this was a sham since the landlord never intended to use the spare key nor provide services. The occupier was therefore a tenant under a lease, not a licensee. An occupier is a lodger if the landlord provides attendance or services which require them (or people authorised by them) to exercise unrestricted access to and use of the premises. In Westminster City Council v Clarke [1992] 2 AC 288, the court reaffirmed this and made it clear that neither a public nor a private landlord would be able to free themselves from legal protections afforded to tenants by simply adopting the language of a lodger.
In order to prevent his tenant from claiming fair rent under the Rent Acts, a landlord argued that the agreement between them was merely a licence to occupy. The court set out the principles to determine when an occupier had a tenancy, and found that although the contract between the landlord and tenant was titled a “license agreement”, a lease had been granted —the tenant was given exclusive possession of residential accommodation for a specified term and no services which would require the landlord to enter the property were being provided. The court in AG Securities v Vaughan [1990] 1 AC 417 went on to reaffirm that exclusive possession was conclusive of a lease.
A tenancy had been granted by a party who only had a license to the property, so the question arose of whether the occupier was a tenant or a licensee. The court held that the occupier was a tenant because the agreement met the criteria to create a lease i.e. it conferred exclusive possession for a certain period of time in return for rent. The fact that the landlord did not have a legal estate in the land was irrelevant; what mattered was that there was exclusive possession. However, in Kay v Lambeth LBC [2006] 2 AC 465, the court clarified that the Bruton lease is not a property right, it is only enforceable against the landlord.
In order to fight an eviction, a party argued that they had acquired a lease through a joint tenancy with their former partner. The court held that there was no joint tenancy because there was no unity of interest —when they moved in together, each partner was asked to pay half not all of the rent. The presence of all four unities is therefore crucial to establishing a joint tenancy.
Faced with the question of whether one tenant could end a joint periodic tenancy without the consent of the other tenant(s), the court held that a notice to terminate by one of two joint tenants is indeed effective to terminate the whole tenancy. Drawing upon contract law, the court reasoned that for a joint tenancy to continue, all tenants must desire its continuation and act together.
A tenant left a property after staying 15 months of a 3 year lease because of the landlord’s serious and repeated failure to repair the property. It’s unusual for a tenant to end a lease because of breach by the landlord, but in this case the breach of contract was so serious that the contractual notion of repudiatory breach (refusal by a contracting party to perform the duty owed to the other parties) was accepted. The court held that a lease could be terminated by the innocent party without notice if the other party failed to fulfil a fundamental term of the contract.