Land Law T8 – Leases and licenses PDF

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Land Law T8 – Leases and licenses.

Reading Essential reading is asterisked (*) Textbooks *Either: Dixon, ch 6 and ch 9 (pp. 372-384); or Megarry ch 10, ch 11 and ch 12 (Note that it will be enough to skim through the sections on leasehold covenants) Cases *Mexfield Housing Co-operative Ltd v Berrisford [2011] UKSC 52, [2012] 1 AC 955 Prudential Assurance v London Residuary Board [1992] 2 AC 386, [1992] 3 WLR 279

Questions for Discussion Please come to the tutorial having prepared answers to the following questions, which are designed to guide you through the Mexfield Housing Co-operative Ltd v Berrisford case (essential reading) and develop your understanding of the law in this area. There will not be time in the tutorial to cover all of the questions, however your tutor will focus on and encourage in-depth discussion of specific aspects of the case.

Case analysis – Mexfield Housing Co-operative Ltd v Berrisford 1. What is the difference between a licensee and a tenant?     

A tenancy is a proprietary type of estate with property significance, it confers proprietary estate enforceable against everyone including the landlord. A license confers personal permission to occupy and binding only on the parties who created it. A lease/tenancy is a proprietary type of interest and it is capable of binding future purchasers. A tenant may sue any person in trespass (including his landlord), but a licensee enjoys only a very narrow right. Leases but not licenses fall within the statutory regulatory machinery of the Rent Act 1977 and Housing Act 1988, so restricting the ability of landlords to remove tenants and set rent.

2. a. Which landmark case set outs a framework for distinguishing a licence from a tenancy agreement? 

Street v Mountford

b. Which Supreme Court Justice discussed that case? 

Lord Templeman

c. What are the ‘hallmarks of a lease’ set out in that case?



Exclusive occupation, weekly payments (rent) for a periodical term.

3. What does the term forfeiture mean? 

The involuntary relinquishment of money or property without compensation as a consequence of a breach or nonperformance of some legal obligation or the commission of a crime.

4. What is the difference between forfeiture and proceedings for possession?  

Proceedings for possession is where one party reclaims your property. I.e if you fall behind with your rent your landlord can start court action to get back whatever money you owe them.

5. a. What does the term ‘determine a lease’ mean?  

This is where a lease for fixed term can be determined early. i.e where a ‘break clause’ in the lease allows for its early determination, or where a lease has a ‘frustration clause’ (which allows for early determination if the building is destroyed by fire)

b. Which case did Lord Walker cite to discuss whether a lease was determinable?  

Bass Holdings Ltd v Lewis [1986] Skipton Building Society v Clayton (1993) 66 P & CR 223

6. Why does Mexfield Housing Co-operative Ltd want this agreement to be classified as a periodic tenancy? 

As this would allow them to terminate the tenancy by notice.

7. What protection does the Protection from Eviction Act 1977 afford tenants?  

Precludes a residential property owner from physically excluding or evicting an existing or former licensee or tenant from the property without an order of the court. Entitles a residential occupier under a periodic tenancy to at lease four weeks notice to quit.

8. Which key cases did Lord Neuberger cite when discussing the uncertainty of a term of years? 

Say v Smith

9. What is the ratio of Prudential Assurance Co Ltd v London Residuary Body [1992] and how was it argued in this case?  

Prudential Assurance held that an agreement to create a lease for an uncertain time was void. It was used to argue that the House of Lords was wrong in that case and that Lord Templeman’s proposition that the certainty rule has applied to all leases and tenancy agreements for 500 years was wrong as a matter of legal history.

10. What is a ‘fetter on a right’? (See Lord Neuberger’s judgment, paragraph 28)



A restriction on the right of either parties to serve a notice to quit.

11. Why did Lord Neuberger think the ‘law is not in a satisfactory state’? 

Because he argued there is no apparent practical justification for holding that an agreement for a term of uncertain duration cannot give rise to a tenancy, or that a fetter of uncertain duration on the right to serve a notice to quit is invalid.

12. Why did Lady Hale state that ‘periodic tenancies obviously pose something of a puzzle if the law insists that the maximum term of any leasehold estate be certain’? 

As it has always been a problem as to how the rule is to apply to periodic tenancies. In one sense the term is certain as it comes to an end when the week, month or quarter which it has been granted for comes to an end. But that is not the practical reality as the law assumes a re-letting and the end of each period unless one or the other of the parties gives notice to quit. So the actual maximum term is uncertain.

13. Why did Lord Neuberger want to retain the requirement of certainty? 

  

For many centuries it has been regarded as fundamental to the concept of a term of years that it had a certain duration when it was created. It seems logical that the subsequent development of a term from year to year should carry with it a similar requirement, and the case law also seems to support this. The notion that the 1925 Act assumed that certainty requirement existed appears to be supported by the terms of section 149(6). The certainty requirement was confirmed only some 20 years ago by the House of Lords. There is a concern expressed by Lord Browne-Wilkinson that to change the law in this field “might upset long established titles”

14. a. What are the facts of Bruton v London & Quadrant Housing Trust [2000]? 

The council gave London and Quadrant Housing Trusts, a charitable association, a license to use land to accommodate the homeless. For a place at Flat 2, Oval House, Rushcroft Road, in Brixton London, Mr Bruton agreed with the Trust to pay weekly rent for a flat. There was a provision that the council and LQHT had access to the property at limited times. Then he claimed he was a tenant, and the Trust had an obligation to repair the flat under the Landlord and Tenant Act 1995 section 11. The Housing Trust argued that because they had no lease they could not grant a lease to Mr Bruton, and therefore they had no obligation to repair the property.

b. Why did Lord Neuberger dismiss Bruton v London & Quandrant Housing Trust as ‘having no bearing on the [Mexfield Housing] case’? 

Lord Neuberger said that the Bruton case was about relativity of title which is the traditional bedrock of English Land law, and that Lord Hoffmann’s observations have no bearing on a case where the nature of the agreement is such that it cannot, as a matter of law, be a tenancy even as between the parties.

15. Why did Lord Hope want to comment on Scots Law in this case?  

Because there are significant differences between the way English and Scots treat agreements of the kind that are at issue in this case. The first difference relates to the statues of Mexfield as compared with the status that a similar body would have in Scotland. It is a fully mutual housing association



(within the meaning of S1(2) Housing Associations Act 1985 and S5(2) Housing Act 1985). It cannot create an assured tenancy in England (s1(2) and para 12(1)(d) Schedule 1 to the Housing Act 1988). Nor can it create a secure tenancy there, because it is registered under the Industrial and Provident Societies Act 1965. A housing association is not a landlord for the purpose of creating a protected statutory tenancy. So its members has no statutory protection except that which is given to them by the Protection from Eviction Act 1977. Whereas in Scotland a fully mutual co-operative housing association which meets the conditions for registration set out in s58 and 59 of the Housing (Scotland) Act 2001 is eligible for registration as a social landlord under part 2 of that Act. Secondly under Scotts common law the starting point is that a lease is a contract which gives the tenant a personal right to the subjects…

16. What interested Lord Walker in the Skipton Building Society v Clayton [1993] case? 

The facts in that case illustrated the difficulties that can arise when a husband regularly forges his wife’s signature. The main point of law is whether the sale of a flat at a reduced price, with the retention of a rent free license for life, constituted a fine (that is a premium) foee the purposes of S149(6). The Court of Appeal held that it did. There is nothing in the judgement of Slade LJ that conflicts with any of the reasoning in Lord Neuberger MR’s judgement.

17. Why did Lady Hale consider that the courts have ‘now reached a position which is curiouser and curiouser’? 

As there is a rule against uncertainty which applies both to single terms of uncertain duration and to periodic tenancies with a curb on the power of either party to serve a notice to quit unless and until uncertain events occur. But this rule does not matter if the tenant is an individual, because the common law would have automatically turned the uncertain term into a tenancy for life, provided that the necessary formalities were complied with, before the Law of Property Act 1925.

18. a. Why did Lady Hale want the decision in Prudential Assurance Co Ltd v London Residuary Body to be reconsidered? (See Lady Hale’s judgment, paragraph 96) 



In Prudential Assurance Mr Nathan has sold a strip of land between his shop and the road to the London County Council, which had led it back to him at weekly rent, by an agreement which provided that the “tenancy shall continue until the…land is required by the council for the purposes of the widening of” the highway. His successors in title sought to enforce this restriction against the county council’s successors in title and the House of Lords held that they could not do so. As the House of Lords should have taken the view that this case involved a single term of uncertain, potentially perpetual, duration and thus incompatible with the long established rule of the common law. b. Who did she think should reconsider it?



By the Supreme Court or Parliament.

19. Why were the Supreme Court Justices asked to consider the law of contract? 20. Has there been any academic debate surrounding the decision in this case?...