Leases problem question PDF

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problem question on whether someone has a lease...

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3. Mohammed, Latchmi and Coco agree to share accommodation during their final year as students at the University of Leicester. They find a suitable flat near the University in April 2020, the registered freehold title to which is owned by Skylar. The students each sign a separate agreement on the 5 th May 2020 to begin on the 1 st September 2020 for twelve months at £500 each per month. The agreements have ‘LICENCE’ in bold lettering at the top of the document, and they all include a term that if any one person does not pay their rent, the others are liable for the money owed. Skylar retains a key to the flat, and agrees to provide laundry services to Mohammed, Latchmi and Coco every Friday morning. In May 2021, Skylar decides to sell the flat to Bilal, who is duly registered as the freehold owner. Bilal and Skylar are friends, and Skylar told Bilal during the sale that there are “some annoying students in the flat, but they should be easy to get rid of. They won’t have a leg to stand on.” One week later, Bilal bangs on the door of the flat, and tells Mohammed, Latchmi and Coco that they have 5 days to vacate the flat. They tell him that they have agreements which say they are entitled to stay in the flat until September. Bilal is furious. That evening, he finds their Facebook and Twitter profiles, and bombards them with hate messages. He also contacts their friends and families, concocting lies about how their regular drug-fuelled parties are in breach of the local Covid lockdown. He also arranges for the electricity to be stopped, just as the students are due to complete their final university exams online. Advise Mohammed, Latchmi and Coco.

This essay will discuss the issue of whether Mohammed, Latchmi and Coco have a lease or license in Skylar’s flat, and whether it can override Bilal’s interest.

Street v Mountford [1985] is used to determine whether they have a property right to the flat. A lease must be an exclusive possession to a property for a rent at a term. These requirements are objectively looked at to determine a lease regardless of whether Skylar had intended for it to be a license. It is evident that the students are paying a rent of £500 each per month over a fixed term of twelve months which proves certainty and is a valid term. We must then examine whether they have exclusive possession to the flat; the right to exclude all others including the landlord which can be assessed by the exclusive occupation test that is, establishing the presumption that the students the right of sole and exclusive enjoyment of the land. Although they signed the agreement and are living together, this can be regarded as unity of possession by multiple

occupation, that is, joint tenancy – a form of co-ownership in Land Law. A factor which can establish is the presence of an identical license agreement (Antoniades v Villiers [1990]) which proves that they have an identical unity of possession, interest, title, duration of tenancy in the land. Additionally, they had agreed and moved into the flat simultaneously which further proves their unified exclusive possession of the flat.

However, Skylar’s term of having the key to the flat to provide a laundry service can rebut the students’ presumption of exclusive occupation. It was held in Crancour v Da Silvaesa [1986] that only if the landlord acts upon this term and requires unrestricted access to provide the promised services, it will not presume exclusive occupation. However, if such term was inserted only to prevent the creation of a tenancy for the students and defeating the Rent Act, it will not constitute the agreement as a license ( Aslan v Murphy [1990]). By telling Bilal that the students are easy to get rid of because they ‘won’t have a leg to stand on’ proves that he had purposely included the term in the agreement, in hopes that it will rebut their presumption of exclusive occupation to prevent the creation of a tenancy. Thus, the students do have exclusive occupation in the flat and satisfy the three requirements to establish a lease. It is also important to note that although the agreement is titled ‘license’, this will be irrelevant because such labels are not determinative of the agreement’s actual substance and interests (Street v Mountford).

It must then be examined whether the students satisfy the formalities requirement of a lease. The fixed term in their agreement does not exceed three years and would usually fall under s.54(2) Law of Property Act 1925, and excludes the requirement for a deed. However, this provision does not apply to reversionary leases; where a lease is signed but does not start until a specified future date. Since the lease was signed in May and agreed to start in September, s.52(1) will apply instead and will require a deed for the conveyance of the leasehold. Furthermore, since the time gap between the signing and the start of the lease exceeds three months, a deed is not created here because it will require registration (s.27(b)(ii) Land Registration Act 2002). The absence of such formalities show that the students do not have a lease as a matter of law.

The evince of an equitable lease can prove otherwise. Under the Law of Property (Miscellaneous Provisions) Act 1989 constitute that to establish an equitable lease, the agreement must be done in writing where the terms have been signed by both parties and must be specifically enforceable, for example by a clause. According to case facts, the agreement was signed and agreed by each student and included the specific performance that if any of the students do not pay their rent, the rest must be liable for this payment. This proves that the students have an equitable lease.

The next issue is to establish whose interest has priority over the flat. The date of the agreement’s creation forms the basic rule of priority under s.28 LRA 2002; where interest of a registered estate is not affected by the disposition of the estate. However, s.29 then states that priority will be given to registered dispositions and win over interests which were not protected at the time of registration. Since Bilal has a registered disposition on the flat due to his purchase of the freehold, it will win over the students; equitable lease which has not been registered. However, an equitable lease can override Bilal’s registered disposition under Schedule 3, LRA 2002. The students’ overriding interest can be proven by Para 1 and 2 of schedule 3, as they satisfy all the requirements of having interest, actual occupation and purchaser’s knowledge of their occupation. Skylar informing Bilal of ‘annoying students in the flat’ prove that he had knowledge of their actual occupation, whether it be obvious or not. Thus, the students’ have an overriding interest over Bilal.

Following, we must take into account of Bilal’s behaviour and whether he has breached his duty under s.1, Protection from Eviction Act 1977 to not interfere with the residential occupier’s peace or comfort of the land. By bombarding the students with hate messages and spreading lies about them to their families, he is can be accused for an offence of intimidation and harassment (Kenny v Preen [1963]. Furthermore, by stopping the electricity, it will interfere with the students’ online exams which will go against the purpose of their tenancy; to accommodate them to finish up their final year at university. By creating the land to be unfit for the students’ purpose

of tenancy, he breaches his duty as a landlord ( Browne v Flower [1911]). The students can be remedied by termination, damages or withholding of rent....