bits of law

Main Section

Land | Ownership

Leases & Licences: Overview

Revision Note | Degree

Download Adobe PDF Icon

Introduction

  • a lease or tenancy is one of the two legal estates which can exist
    • s.1: only estates in land which are capable existing are:
      (a) an estate in fee simple absolute in possession, and
      (b) a term of years absolute (lease)
  • licence is capable of authorising use of land (right of access or temporary accommodation) & can vary in length
  • licence does not create proprietary interest in land

    Thomas v Sorrell (1673) Vaugh 330

    • lease: properly passeth no interest, nor alters or transfers property in anything, but only makes an action lawful, which without it had been unlawful
  • difficulties establishing whether licence or proprietary rights exist

    Hardwick v Johnson [1978] 2 All ER 935

    Facts:

    • mother purchased house for son & daughter-in-law
    • informal agreement for couple to pay monthly amount to mother (unclear whether rent or payments for house)
    • couple separate & mother seeks to end arrangement

    Issue:

    • what rights existed?

    Held:

    • wife had licence to occupy property & no circumstances which justified termination of licence
  • licences may be express or implied permission

    Robson v Hallett [1967] 3 WLR 28

    • When a householder lives in a dwelling house to which there is a garden in front and does not lock the gate of the garden, it gives an implied licence to any member of the public who has lawful reason for doing so to proceed from the gate to the front door or back door, and to enquire whether he may be admitted and to conduct his lawful business. Such implied licence can be rebutted by express refusal of it, as in this case the Robsons could no doubt have rebutted the implied licence to the police officers by putting up a notice on their front gate 'No admittance to police officers'
  • licence is permission to do something that would otherwise not be able to do without committing trespass
  • licence is distinguished from easements:
    no need to benefit land of licensee
    no need for dominant & servient land
    mere personal right
    created without formality
    creates no interest in land (legal or equitable)

Licence or tenancy?

  • distinguishing between types of occupation of land important as gives rise to different rights
  • unlike licensees tenants have a proprietary right & some statutory rights
  • identifying correct categorisation of occupation has given rise to much litigation

    Street v Mountford [1985] AC 809

    • hallmarks of tenancy:
      grant of exclusive possession
      for a term
      at a rent

    Ashburn Anstalt v Arnold [1989] Ch 1

    • rent is not essential for tenancy

    Antoniades v Villiers [1990] 1 AC 417

    • artificial means cannot be used by a landlord to try & circumvent exclusivity of possession (an essential element of tenancy but not mere licence)
    • court will find occupiers who have exclusive possession for a period at rent to be tenants not licensees

    AG Securities v Vaughan [1990] 1 AC 417

    • licensees not tenants: occupiers who are not living together (move in separately & under separate agreements), landlord leaves it up to them who uses which rooms & not each responsible for entire rent
  • distinction also drawn between lodgers & tenants

    Aslan v Murphy [1990] 1 WLR 766

    Facts:

    • D occupied one room in C's house
    • terms of purported licence stated that D ('licensee')was not permitted to occupy room between 10:30am 12:00pm & also allowed for C ('licensor') to share occupation of room as he wished
    • C also retained keys to D's room

    Issue:

    • was D a lodger or tenant?

    Held:

    • House of Lords: court should consider whether agreement was a sham, if not whether the provisions for sharing & need to vacate at certain times were part of true bargain or pretences
    • HoL found both provisions to be pretences
    • Not a requirement of a tenancy that the occupier should have exclusive possession of the keys to the property: depends why owner retains keys if for emergencies or carry work that his responsibility (not preclude tenancy) but if to provide housekeeping services (may imply lodger not tenant)
  • landlords may seek to infer a lodger not tenants by undertaking obligations

    Markou v Da Silvaesa (1986) 52 P & CR 204

    • obligation to provide attendance & services not conclusive occupier licensee but must amount to unrestricted access
    • amount to unrestricted access by landlord: removal of rubbish on daily basis/every other day, cleaning once a week, laundering sheets fortnightly

    Huwyler v Ruddy (1996) 28 HLR 550

    • test for unrestricted access involves landlords ability to access property at his convenience
    • important that contractually entitled to access for services, even though in practice not carried out

    Westminster CC v Clarke [1992] 2 AC 288

    • council ran a hostel for homeless people the special circumstances of the council's control over rooms meant occupiers were licensees
      council could move occupiers form room to room, require sharing & restrict visitors

Types of licences: Bare licences

  • bare licence: granted for no consideration & provides limited rights

    The Calgarth [1927] P 93

    • when you invite a person into your house to use the staircase, you do not invite him to slide down the banisters
  • bare licences can be revoked by licensor:
    at any time
    at common law must give reasonable time to allow licensee to leave land
    if licensee complying with request to leave: not allowed to use force
    if licensee refusing to comply with request: only use reasonable force
    must be clear that licence is being revoked immediately or following expiry of reasonable time
  • request to leave must be clear

    Gilham v Breidenbach [1982] RTR 328

    Facts:

    • G was seen driving without lights & police stopped him outside his house
    • G was seen to be walking unsteadily up the path to his house & police detected smell of alcohol
    • G refused police request to be breathalysed, stating Fuck off you planks

    Issue:

    • did G's statement terminate the licence?

    Held:

    • coarse abuse rather than request to leave so not attempt made to revoke licence
  • benefit & burden of bare licence: purely personal & cannot pass to another

Types of licences: licence coupled with an interest

  • in some circumstances licence is connected with some other interest
  • right to catch & take away fish from a river:
    profit à prendre & capable of being legal interest
    in order to exercise must have access to river (implied licence to cross land to access)
  • if licence coupled with an interest: licensor cannot revoke licence during period of interest granted & burden of licence will pass with benefit & burden of interest

Types of licences: contractual licences

  • contractual licences: licence to enter a building for a concert, by purchasing ticket licence acquired to remain in building for duration of concert
  • if required to leave prior to end of concert may have claim for damages for breach of contract or in in tort for assault (removal from premises), depends whether licensor has right to terminate licence

    Wood v Leadbitter (1845) 13 M & W 838

    • mere licence revocable at law but licence coupled with grant is not
    • without being grant by deed cannot rely on there being a grant

    Hurst v Picture Theatres [1915] 1 KB 1

    Facts:

    • C was evicted from cinema before end of film

    Issue:

    • could C claim damages?

    Held:

    • right to watch the film was a grant & licence to enter cinema was licence coupled with a grant & irrevocable
    • lack of deed not fatal as court can apply equitable rules
    • alternatively, there was agreement not to revoke licence until end of film & therefore revocation of licence was breach of contract & tort to remove C
    • Phillmore LJ (dissenting): no grant made as even if contract enforceable not interest in land, no inconsistency in finding licensor had right to revoke licence (so no damages in tort) & allowing damages in contract ( if revocation amounted to breach of contract)

    Winter Garden Theatre v Millennium Productions [1946] 1 All ER 678

    • equity has the power to grant an injunction to prevent a breach of contract
  • if licence given for particular purpose, no right to revoke whilst purpose still exists & licensee remains within terms of licence
  • necessary to consider terms of contract
  • courts may use imply contractual licence to protect person from eviction

    Tanner v Tanner [1975] 1 WLR 1346

    Facts:

    • mother of twins gave up fairly secure rented accommodation to live with father
    • father sought to evict

    Issue:

    • could she prevent eviction?

    Held:

    • contractual licence to occupy house: father could not revoke for as long as children were of school age & reasonably required the house
  • licensee may assign benefit of contractual licence
  • licence does not create an interest in land so no propriety right capable of binding successors

Constructive trusts & proprietary estoppel

  • burden of licence will not bind third party itself courts may impose via constructive trust or proprietary estoppel

    Binions v Evans [1972] Ch 359

    Facts:

    • whenever the owner sells the land to a purchaser, and at the same time stipulates that he shall take it 'subject to' a contractual licence... a court of equity will impose on the purchaser a constructive trust

    Ashburn Anstalt v Arnold [1989] Ch 1

    • disagreed with interpretation under Binions v Evans that term in contract could bind successor in title
    • however, conceded that situation may be different if conscience of buyer was affected

    Lyus v Prowsa Developments Ltd [1982] 1 WLR 1044

    Facts:

    • reason for including term subject to licence in the contract not to confer any new right, but merely to fulfil seller's duty to disclose to buyer all possible incumbrances
  • proprietary estoppel: owner of land may be estopped from denying a person expectation of a licence (or revoking it) if expectation encouraged by owner's representations

Types of lease

  • term of years absolute: fixed term, maximum length is certain
  • periodic tenancies (weekly, monthly, quarterly or yearly): may continue indefinitely, legal estate but no written deed required as period less than 3 yrs, regardless show long tenancy lasts
  • tenancy at will: relationship between tenant & landlord & no period which tenant entitled to land

    Wheeler v Mercer [1957] AC 41

    • tenancy at will: mutual agreement that tenant occupies at his own will, at the express or implied will of landlord
    • no rent or term necessary
    • tenant & landlord may terminate at any time & ends automatically on death of either

    Errington v Errington [1952] 1 KB 290

    Facts:

    • F permitted C to occupy property in return for payment if mortgage instalments, with promise to transfer fee simple when mortgage satisfied

    Issue:

    • what type of tenancy existed?

    Held:

    • not tenancy at will: F could not evict C at will so long as C continued to pay instalments
    • C: licensee, having permissive occupation as long mortgage instalments were paid but with contractual right (or at least equitable) to good equitable title to house itself once full mortgage paid
  • tenancy by estoppel: occurs if landlord has no or insufficient title to land when lease is granted

    Industrial Properties v AEI Ltd [1977] QB 580

    • if landlord has no legal estate in property cannot grant a legal lease but is estopped from denying tenancy
    • if tenant disturbed by being evicted by title paramount or equivalent: can dispute landlord's title (to require purported landlord to repay rent paid & enable to be free of covenants)
    • adverse claim necessary or tenant would be able to keep possession of property without paying any rent or performing covenants
  • tenancy on sufferance: occurs when tenant holds over at end of lease without landlord's permission (results in either a periodic tenancy or tenancy at will) or direct prohibition (result in trespass)
  • equitable lease: if contract signed to take a lease & landlord then refuses grant of lease, remedy of equitable performance of contract available

    Walsh v Lonsdale (1882) 21 ChD 9

    • if tenant holds under agreement for lease, holds in equity as if holds under grant of lease

    Manchester Brewery v Coombs [1901] 2 Ch 608

    • distinction between legal & equitable lease remains, decision in Walsh v Lonsdale narrow & does not affect rights of third parties
  • contract to be granted a lease is contract to create legal estate in land (interest affecting registered estate) therefore needs to be protected by entry of notice on charges register (s.29 Land Registration Act 2002)
  • some debate over whether contractual-based approach or a property-based approach should eb taken to leases

    Bruton v London & Quadrant Housing Trust [1998] QB 834

    Facts:

    • 1975 council acquired property under compulsory purchase powers with view to redeveloping are
    • pending redevelopment council granted licence to LQHT to provide short term housing for homeless (partly to fulfil council obligations)
    • 1989: LQHT entered into agreement with B, permitting him to occupy flat in property (agreement made clear he was granted a licence & that LQHT only had licence themselves)
    • 1995: B took proceeding against LQHT claiming he was tenant & entitled to benefit of implied covenant to repair premises under s.11 Landlord and Tenant Act 1985

    Issue:

    • was B a licensee or tenant?

    Held:

    • Court of Appeal (majority): B was licensee
    • House of Lords (unanimously): B was a tenant
    Lack of title:
    • Street v Mountford established person granted exclusive possession of property for a term at a rent normally tenant, but in exceptional circumstances not (including example if grantor has no power to create tenancy )
    • CoA: LQHT had capacity to make tenancy but lacked legal title to create
      tenancy legal estate capable of binding the world
      LQHT not able to exclude council so no exclusive possession & could not confer exclusive possession
    • HoL: B granted exclusive possession so was a tenant
      tenancy arises if landlord & tenant relationship not dependant on whether tenant has propriety interest binding on third parties
      tenancy creates proprietary interest not other way round
    Estoppel:
    • party who has no title can create tenancy & bound by it on basis of estoppel
    • CoA: LQHT not estopped from denying tenancy as never purported to grant one
    • HoL: not necessary to consider estoppel as it is not the estoppel that creates the tenancy, but the tenancy which creates the estoppel
    Special circumstances:
    • CoA: decision B licensee prevented saddling the trust with statutory obligations of a landlord, which it never intended to undertake, and which would effectively disable it from carrying out the socially valuable functions which it performs
    • HoL: character of landlord irrelevant, B had been granted exclusive possession & therefore had tenancy

    Kay v Lambeth BC [2006] 2 WLR 570

    Facts:

    • council granted LQHT licence of properties which were not suitable to meet normal housing needs
    • LQHT granted licences to As in respect of each property occupied by them
    • 1995: council replaced licence to LQHT with lease of 10yrs including term that council could end lease after 6 months by giving one week written notice
    • after HoL decision in Bruton v London & Quadrant Housing Trust, council gave LQHT notice to terminate lease
    • As informed they had to leave their properties
    • As argued they were tenants of council
    • 1st argument: LQHT surrender licence in 1995 but was not entitled to surrender As' tenancies (acquired as result of Bruton)
      tenancies in existence when council granted lease to LQHT & were binding on council
      lease merely interposed LQHT as As' immediate landlord & did not deprive of tenancies binding on council
    • 2nd argument: council giving notice to LQHT only affects their relationship & not status of As' tenancies (acquired before notice)
    • essentially a tenant who voluntarily surrendered his interest to his landlord could not end lease to sub-tenant & landlord bound by sub-tenants' lease as tenant could not surrender interest did not belong to them

    Issue:

    • were As tenants of council?

    Held:

    • 1st argument: accepted surrender by tenant of head lease could not bring a sub-lease to an end (in absence of any provision allowing for early termination)
      however no head lease in existence when Bruton tenancies were granted & no estate out of which they could be created
      As' rights only enforceable against LQHT not council
    • 2nd argument: accepted granting of lease to LQHT had effect of feeding Bruton tenancies (transformed from non-estate tenancies into estate tenancies)
      however, As' estate was always subject to terms of lease between council & LQHT which allowed council to end on giving written notice
      Bruton tenancies could not survive ending of the LQHT lease in accordance with its terms (& council entitled to regard As as trespassers)

Lease requirements

  • tenancy must give tenant exclusive possession & usually requires payment of rent (although not essential)
  • terms of lease (as a contract) must be sufficiently certain
  • fixed term tenancy : date of commencement of tenancy & length of time it is to run must be known at very beginning of tenancy

    Prudential Assurance v London Residuary Body [1992] 2 AC 386

    • tenancy granted for duration of the war was void
    • Lord Templemansuggested no reason why tenancy could not be granted for fixed term with provision for early ending of term if a particular event occurred
  • periodic tenancy: certainty rule is explained as at any given point in time, maximum length of the period is known, either party may make length of entire tenancy certain by serving a notice on the other party to end it
  • certainty rule has been criticised

    Berrisford v Mexfield Housing Co-operative [2011] UKSC 52

    • Lord Dyson commented on certainty rule: there is much to be said in favour of getting rid of the rule. But I think that, rather than the court introducing a change to such a fundamental tenet of the law of landlord and tenant, it would be better if this were done by Parliament after full consideration of interested parties of the kind that is routinely undertaken by the Law Commission
    • Lord Clarke: it is a mystery to me why in 2011 the position of a tenant who is a human being and a tenant which is a company should in this respect be different. There is in my opinion much to be said for the view that the certainty of the rule should now be abandoned
  • rule can defeat intention of parties, if agreement they have reached results in a lease that is void

    Ingram v Little [1960] 3 WLR 504

    • The true spirit of the common law is to override theoretical distinctions when they stand in the way of doing practical justice
  • however, certainty rule in relation to fixed term tenancies does ensure position is clear
This site is best viewed with style sheets (CSS) enabled and an up-to-date browser.