Leases

Requirements for a lease

1. Rent (implications for formalities - "best rent", parol rule s54(2) LPA 1925) 2. Term (implications for formalities and registration, parol rule (3 years) & registration (7 years)) 3. ExclusivePossession 4. Intention? 3. Rent, term & exclusive possession Street v Mountford [1985] AC 809 - In an agreement dated 7 March 1983, Roger Street granted Wendy Mountford the right to occupy two rooms for £37 per week subject to termination by 14 days' notice and subject to conditions set out in the agreement. This was called a "licence agreement" and contained a declaration signed by Mrs Mountford with a signed statement, that "I understand and accept that a licence in the above form does not and is not intended to give me a tenancy protected under the Rent Acts". (regardless of the wording was this a tenancy?) - This supposedly had the effect that she understood that the agreement did not give her a tenancy protected under the Rent Acts (ie. she had a licence rather than a lease). The landlord, Mr. Street, tried to evict Mrs Mountford, saying it was a licence and so Mrs Mountford sought an order in the county court that it was a tenancy (and so covered by the security of tenure provisions in the 1977 Rent Acts). It was unclear whether the owner or agent retained a key. The County Court held that it was a tenancy, the Court of Appeal held that it was a licence. Then it went to the House of Lords: Lord Templeman: "A tenancy is a term of years absolute. This expression, by section 205(l)(xxvii) of the Law of Property Act 1925, reproducing the common law, includes a term from week to week in possession at a rent and liable to determination by notice or re-entry. There can be no tenancy unless the occupier enjoys exclusive possession; but an occupier who enjoys exclusive possession is not necessarily a tenant. He may be owner in fee simple, a trespasser, a mortgagee in possession, an object of charity or a service occupier. To constitute a tenancy the occupier must be granted exclusive possession for a fixed or periodic term certain in consideration of a premium (fine, lump-sum) or periodical payments. The grant may be express, or may be inferred where the owner accepts weekly or other periodical payments from the occupier." (818, E-F) It is clear from his judgment that when the criteria existed, Lord Templeman considered this to be determinative: "In the case of residential accommodation there is no difficulty in deciding whether the grant confers exclusive possession. An occupier of residential accommodation at a rent for a term is either a lodger or a tenant. The occupier is a lodger if the landlord provides attendance or services which require the landlord or his servants to exercise unrestricted access to and use of the premises. A lodger is entitled to live in the premises but cannot call the place his own." (817H-818A) A lodger is a licensee. Why was Lord Templeman so emphatic? Given the power-dynamics in leases, and the protections that tenancies conferred at that time under the 1977 Rent Act), the courts have been keen to strike down terms of agreements which are "pretences", "shams" or "artificial" if they turn what would otherwise be a tenancy into a licence. Although academically, housing law and land law are often separated, they inevitably appear together in real life and before the courts. Lord Templeman in Street v Mountford: "Although the Rent Acts must not be allowed to alter or influence the construction of an agreement, the court should, in my opinion, be astute to detect and frustrate sham devices and artificial transactions whose only object is to disguise the grant of a tenancy and to evade the Rent Acts". He was emphatic because if the elements of the lease were there ("a spade is a spade") then wording in a document should not, he held, be able to transform the arrangement into a licence and avoid the protections of the 1977 Rent Act: "If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect of the agreement by insisting that they only created a licence. The manufacture of a five pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade." (819F)

Sub lease (Bruton)

Bruton v London & Quadrant Housing Trust [2000] 1 A.C. 406 A housing trust was granted a licence by the local authority to use properties acquired by the authority for redevelopment as temporary accommodation for homeless people. The trust undertook to ensure that no occupier was given security of tenure without the prior consent of the local authority. The plaintiff signed an agreement with the trust for the occupation of a self-contained flat in one of the properties on a temporary basis on a weekly licence. Mr. Bruton sought to enforce an alleged leasehold covenant to repair. "An agreement having these characteristics creates a relationship of landlord and tenant to which the common law or statute may then attach various incidents. The fact that the parties use language more appropriate to a different kind of agreement, such as a licence, is irrelevant if upon its true construction it has the identifying characteristics of a lease... The decision of your Lordships' House in Westminster City Council v. Clarke [1992] 2 A.C. 288 is a good example of the importance of background in deciding whether the agreement grants exclusive possession or not. But the classification of the agreement as a lease does not depend upon any intention additional to that expressed in the choice of terms. It is simply a question of characterising the terms which the parties have agreed. This is a question of law." (Lord Hoffman, 412 E-H) So Mr. Bruton had a tenancy, in Lord Hoffman's words: "the term "lease" or "tenancy" describes a relationship between two parties who are designated landlord and tenant. It is not concerned with the question of whether the agreement creates an estate or other proprietary interest which may be binding upon third parties. A lease may, and usually does, create a proprietary interest called a leasehold estate or, technically, a "term of years absolute." This will depend upon whether the landlord had an interest out of which he could grant it. Nemo dat quod non habet. But it is the fact that the agreement is a lease which creates the proprietary interest. It is putting the cart before the horse to say that whether the agreement is a lease depends upon whether it creates a proprietary interest" (para 415 B-C). "The agreement ... plainly gave Mr. Bruton a right to exclusive possession. There is nothing to suggest that he was to share possession with the Trust, the council or anyone else [cf Westminster CC v Clarke (1992)]" (Lord Hoffman 413 H). L&Q housing trust was granted a licence by the local authority to use properties acquired by the authority for redevelopment as temporary accommodation for homeless people. The trust undertook to ensure that no occupier was given security of tenure without the prior consent of the local authority. Mr. Bruton signed an agreement with the trust for the occupation of a self-contained flat in one of the properties on a temporary basis on a weekly licence. He then sought to enforce an alleged leasehold covenant to repair (which he could only do if he was a tenant). "An agreement having these characteristics creates a relationship of landlord and tenant to which the common law or statute may then attach various incidents. The fact that the parties use language more appropriate to a different kind of agreement, such as a licence, is irrelevant if upon its true construction it has the identifying characteristics of a lease... The decision of your Lordships' House in Westminster City Council v. Clarke [1992] 2 A.C. 288 is a good example of the importance of background in deciding whether the agreement grants exclusive possession or not. But the classification of the agreement as a lease does not depend upon any intention additional to that expressed in the choice of terms. It is simply a question of characterising the terms which the parties have agreed. This is a question of law." (Lord Hoffman, 412 E-H) What matters is relationship between parties - had exclusive possession, a term etc 'BRUTON LEASE' FH Licence LH •Nemo dat quod non habet? •The licence becomes irrelevant. What matters is the relationship between the freeholder (landlord) and the tenant. •"The agreement ... plainly gave Mr. Bruton a right to exclusive possession. There is nothing to suggest that he was to share possession with the Trust, the council or anyone else [cf Westminster CC v Clarke (1992)]" (Lord Hoffman 413 H). THE SPADE ARGUMENT (FROM STREET) "The decision of this House in Street v. Mountford is authority for the proposition that a 'lease' or 'tenancy' is a contractually binding agreement, not referable to any other relationship between the parties, by which one person gives another the right to exclusive occupation of land for a fixed or renewable period or periods of time, usually in return for a periodic payment in money. An agreement having these characteristics creates a relationship of landlord and tenant to which the common law or statute may then attach various incidents" (Lord Hoffman, 413E). Commentary on Bruton Bruton was a decision, which, it is fair to say, caused some consternation as it seemed to violate an ancient principle that a lease needs to be carved out of an estate. Jan Luba QC, for example, noted in a 1999 Editorial in the Landlord and Tenant Review that: "For decades landlord and tenant practitioners have learned and practised the proposition that an interest in land can only be acquired from another who has such an interest. Many of us were initially presented with the image of land-law as a tree. The trunk represented the fundamental interest in land (the freehold) from which could spring branches (leases) and from them the twigs (sub-tenancies). If you cut the branch "with it fell the twig, and so on. But now, it seems, a person with no interest in land can grant a tenancy or lease." A non-proprietary lease? M. Lower (in "The Bruton tenancy"(2010) Conveyancer 38) raised the question of whether a lease is only an estate in land (s1(1)(b) LPA 1925) or whether it can be "just" a contract? Can you have a "non-estate" lease? He suggested you could. "Lord Templeman's judgment in Street v Mountford expresses the clear understanding that the lease is to be viewed as an estate in land. It is possible, however, to read the judgment as authority for the proposition that a lease is any contract that confers exclusive possession (as against the landlord) for a term and at a rent. Thus, the way was left open for the idea that the lease is just a species of contract that need not create an interest in land; the 'landlord' need not have a reversionary interest out of which the lease can be created. The House of Lords' decision in Bruton v London & Quadrant Housing Trust confirmed that it was indeed possible to create this non-proprietary lease." Alternatively, can Bruton be justified by principles of relativity of title? Some argue that it can. In Mexfield, Lord Neuberger does not query Lord Hoffman's decision in Bruton saying only: "The Bruton case was about relativity of title which is the traditional bedrock of English land law" (974E). Relativity of title is the ancient land law principle that title is relative so that someone may come onto a piece of land hand and have title that prevails over some people, but is not absolute, and will not prevail against someone who has a superior claim. We will study this when we come to adverse possession (squatting) since in unregistered land a squatter can possess land adversely (ie. without the consent of the landowner) and can see of other people and eventually (after 12 years, under limitation rules) the freeholder. In registered land, the rules on adverse possession are now quite different (ss96 and 97 and Schedule 6, LRA 2002) and even more importantly the principle of relativity of title has been over taken in registered land by the vesting of ownership in the registered owner by registration (the "statutory magic" of s58 LRA 2002). Mark Thompson also thought that Bruton was justifiable in that way, giving the following example: "If a squatter goes into possession of freehold land, he occupies the land as the holder of an estate in fee simple. His title is good as against anyone except a person with a better title.. It is open to him to convey his possessory title to anyone else, in which case that person's title will be as good as that of the squatter. That is, his right to possession is only liable to be defeated by the owner of the paper title to the land. If, instead of conveying the land to a purchaser, the squatter purports to grant a lease of it, then similar reasoning should apply. As between the squatter and the tenant, the lease is perfectly valid, and the tenant's right of occupation can only be upset by title paramount: that is an action brought by the true owner of the land. Whether or not the parties to the original lease knew that the landlord had no title to the land should be quite irrelevant. If the squatter transfers his title to a purchaser then, as a person deriving title from the squatter, the purchaser will be in no better position than the squatter and so the tenancy will be binding on him. On this analysis, it should make no difference if the person purporting to create a licence is himself a licensee rather than a squatter. In both cases, one should look to the agreement between the parties to see if it is consistent with a lease or a licence." All in all, there is no clear view of whether Bruton is right or wrong. Many academics disagree with it but barristers and judges have assimilated the finding and do not raise it as problematic (notably Lord Neuberger in Mexfield). In Roynon v Camelot, HHJ Matthews does not raise the issue but it is almost certain the Camelot there had a licence from Bristol City Council rather than a lease (so creating a situation v similar to Bruton). One further argument for Bruton (and the one I have made in lectures) is that this protects residents, they can bring claims for repair against their landlord (either L&Q in Bruton or Camelot in Roynan and be protected). Seeing it from the tenant's point of view arguably is also arguably consistent in the move towards occupation contracts, outlined in the Law Commission's Consultation Paper 168 Renting Homes. In relation to the problem scenario in the lecture where Barney loses his room above the bar in the Water Buffalo Lodge: "Where is the justice in this for Barney, if he gets evicted. None of this is his fault". In the words of Lady Hale in Mexfield, "Quite so." One argument for the Bruton finding is that landowners have a straightforward remedy if they don't want to be bound by the tenancy, they can just withdraw the licence. This is what happened here. Following the decision in Bruton, Lambeth gave notice to L&Q to terminate the lease (they had given L&Q a lease during the Bruton litigation but the principle would be the same if they withdrew the licence). Lambeth then notified the occupiers that they were, or would become, trespassers and brought possession claims. The occupiers responded that they had become Lambeth's tenants following the termination of L&Q's1995 lease. This time, a Mr. Kay brought the litigation. Kay v Lambeth [2006] 2 AC 465 [do not read the whole case, only the paragraphs set out on the reading list] Lambeth could terminate their arrangement with L&Q and as the local authority had no relationship with the occupiers (Mr. Bruton and Mr. Kay), they would not become trespassers (because the licence was withdrawn) and would have to leave. Lord Scott held that: "the consensual termination of LQHT's contractual licence from Lambeth could not, in my opinion, turn the Bruton "non-estate" tenants into estate tenants of Lambeth ... the Bruton tenants were not bound by a transaction between Lambeth and LQHT to which they were not parties. But the contended for conclusion that they therefore became tenants of Lambeth is a non sequitur. They never were sub tenants holding, via a grant from LQHT, an interest created by Lambeth. They were tenants of LQHT holding an interest created by LQHT. This means that the non-proprietary arrangement binds only the immediate landlord, but not persons with a superior title and (presumably) other third parties" (Lord Scott, 525C). WHAT HAPPENED NEXT? KAY V LAMBETH [2006] 2 AC 465 - Bruton and Kay come as a two - need licence because when licence removed then no longer relationship between freehold and sublease so lease becomes trespasser Lambeth: FH --------------------------------------------------------------- L&Q: Licence/10 year lease ----------------------------- Bruton: sub-lease --------------------------- Following the decision in Bruton, Lambeth gave notice to terminate the lease. It then notified the occupiers that they were, or would become, trespassers and brought possession claims. The occupiers responded that they had become Lambeth's tenants following the termination of L&Q's1995 lease. The Flint Company owns the freehold to Water Buffalo Lodge. They grant Fred a licence to hold music events so that people come and spend money at the bar. They tell him that on no account is anyone to live at the Lodge. Betty and Barney are having a trial separation and Barney asks if he can stay at the Lodge. Fred says, of course, and they draw up a deed, creating a lease, with Barney paying £50 a week for a term of five years, with full exclusive possession of the room above the bar. Three years pass and the Flint Company never notice. Water begins dripping through the roof onto Barney's bed. As Fred is very busy running the music events, Barney writes to the Flint Company asking them to repair their property. The Flint Company are furious that Fred has let part of the lodge to Barney and insist that he evicts Barney immediately. Barney is in floods of tears and finds that he cannot do so. The Flint Company come to you for legal advice. If licence rescinded then no longer relationship between leasehold and freehold so the leaseholder becomes trespasser Bruton (rent, term exclusive possession then can have a lease granted by a licensee) - however, if licence removed by freeholder then not longer lease but trespass Always need Bruton and Kay cases together Flint Company (freehold) Fred (licence) Barney (lease?) What is the character of the terms of the lease? There is rent (£50pw), term (five years) and exclusive possession. Lord Templeman was insistent in Street v Mountford that there should not be a sham agreement. In Antoniades he preferred the language of a sham. However, Fred does not have an estate in the Water Buffalo Lodge - he has neither the FH nor a lease, only a licence. Since nemo dat quod non habet, is there a lease? Lord Hoffman in Bruton held there was a lease where the requirements (rent, term and exclusive possession) were not referable to any other relationship between the parties and that such an agreement creates a relationship of landlord and tenant. So Barney appears to have a lease, perhaps as is sometimes said, a non-proprietary lease. While the lease is binding between Fred and Barney, Kay v Lambeth confirmed that the Flint Company can end its relationship with Fred by revoking the licence. Once the licence is revoked, the middle-man falls out and there is no leasehold relationship between the Flint Company and Barney. Barney is then a trespasser and can be evicted from the Water Buffalo Lodge. Arguments against Bruton: -Nemo dat quod non habet (cannot give what you do not have) -Mr. Bruton can't have acquired an estate in this way Arguments in favour of the decision in Bruton - Non-proprietary (non-estate) lease -Relativity of title -Agreement between the parties (Mexfield type argument - it is a contract) -Fairnes

Essay and PQ lease examples

Essay and PQ examples: The distinction between leases and licences is unworkable today. Do you agree? Yes - the lease/licence distinction is straightforward Rent - not needed (though note s.54(2) might be in some circumstances) Term - the rule is clear though the exceptions are introducing uncertainty but they can be managed Exclusive possession - this can be distinguished on the facts Intention? Shams, pretences? Contracts v Property - leases are a mix of contractual provisions and land rules. There is some flexibility at the edges but broadly, they are distinguishable. Need for reform in many areas of lease law, including certainty of term or from a policy point of view, e.g. occupation contracts. Please do not assume that leases - or any topic on the exam - will definitely come up as a PQ. It could come up as an essay question. It's really important that whatever you revise for the exam you prepare for either possibility - either a PQ or an essay in all topics. Fred owns Water Buffalo Lodge and agrees that Barney will move in for eight years, paying £1000 a year. Fred retains a key, offers to bring Barney breakfast each morning and asks if Fred can sleep on the sofa in the Lodge after poker night (which happens twice a year). All the formalities are completed. After a year Barney moves out and sublets the Lodge to Betty for the remaining four years. Betty pays the rent to Barney who pays it to Fred who pretends he doesn't notice what is happening. However Fred no longer brings breakfast and says he will never sleep on the sofa bed now. A year later Fred decides to sell Water Buffalo Lodge to Auntie Win, who comes round the property when Betty is at work. She sees some cosmetics but knows that Fred is a very modern man. Please advise Betty Formalities & Registration Fred owns Water Buffalo Lodge and agrees that Barney will move in for eight years... All the formalities are completed. Formalities are completed = legal lease, s52 LPA 1925 & s1(2) & (3) LP(MP)A 1989. However, registration is not mentioned so it appears that Fred did not register the lease as a registrable disposition (under s27(2)(b) LRA 2002). The lease can now only take effect in equity (s27(1) LRA 2002). Requirements for a lease Rent is paid (though not necessarily required but shows intention to create a leasehold agreement Street, Skipton, Ashburn Anstalt). Term is certain - as an eight-year lease (Lace v Chantler, Prudential, Mexfield & Southward). Is there exclusive possession? Street tests, key + services, Aslan suggests no EP bc of services. Sleeping on the sofa - is this a genuine condition? If so then Clarke & Roynan/Khoo would suggest it might negative EP. Perhaps a sham but not dishonest, consider Antoniades). Very likely no exclusive possession (EP) here. If no exclusive possession then haven't met the hallmarks of a lease according to Lord Templeman in Street. In that case would be a licence between Fred and Barney. Bruton & Kay - whenever looking at licence, sublease etc think of Bruton After a year Barney moves out and sublets the Lodge to Betty for the remaining four years. Betty pays the rent to Barney who pays it to Fred who pretends he doesn't notice what is happening. However Fred no longer brings breakfast and says he will never sleep on the sofa bed now. It looks as though, despite the licence between Fred and Barney (on the basis of lack of exclusive possession), Betty may have the hallmarks of a lease in her agreement with Barney. If so, then according to Bruton, she would have, what Lower has called a "non-estate" lease. Fred can still evict Betty by withdrawing the licence to Barney, and then, as Fred has no agreement with Betty, Betty would be a trespasser, as set out in Kay. However, on the facts, Fred has not withdrawn the licence to Barney, so Betty still presents an issue for the sale to Auntie Win as the problem stands. Registration A year later Fred decides to sell Water Buffalo Lodge to Auntie Win, who comes round the property when Betty is at work. She sees some cosmetics but knows that Fred is a very modern man. If Fred has not withdrawn the licence to Barney (as outlined in Kay), then Betty still has a lease according to Bruton. It is not a registrable disposition as it is less than 7 years (s27(2)(b) LRA 2002). While Betty might have protected it by notice under s32&34s (as it is a four-year lease, not excluded by s33), she has not done so. As it is a four-year lease, not executed by deed, it is not a legal lease and so will not be overriding under Sched 3, para 1. Betty's interest might be overriding under Schedule 3, para 2 as an interest + she is in actual occupation. WHAT IS MISSING FROM THIS PQ - DETAIL! This is an overview of the answer. Particular in dealing with the cases but also with the legislative provisions, you need much more detail in the exam. - term - joint tenancies (Antoniades/Vaughan & Hammersmith v Monk/Sims v Dacorum) - detail on actual occupation under Sched 3, para 2 - human rights THE ANSWER & THE MARK The mark you receive in land law reflects how well you understand the law and its limits ie. what the rules are, where the areas of uncertainty lie, what, exactly, the judges said in the cases. While land law problems can to a certain extent be "solved", they are in a common law system, far less like Maths and far more like English Literature where you read the texts and distill the key principles, terms (using quotes) and arguments as well as the uncertainties. You can improve your mark no end by reading the cases set in the original (rather than summarised into a line or two in a textbook). Once you've learned the language of (land) law, your mark will go up. We know it is hard but it does come with practice. The mark reflects your understanding of the legal provision and the cases rather than "the answer". PQs are often written on the cusp so sometimes there is no single solution. Exam answers that display a really good understanding of the legislative framework, cases and perhaps some journal articles will get the highest marks.

Exclusive possession

Exclusive possession is when the tenant is able to exclude all from the property (including the landlord, except for reasonable repairs etc, see later). If the tenant is not able (given the legal circumstances) to exclude the landlord in this way, they will not have exclusive possession (and so will not have a lease). Megarry & Wade (available on Westlaw) summarise the position as follows: "It had always been of the essence of a lease that the tenant should be given the right to exclusive possession, that is the right to exclude all other persons, including the landlord, from the premises. be a tenancy if the person granting the right remains in general control of the property. Such an arrangement will take effect instead as a licence. The typical case is where the landlord provides services, such as cleaning, for the occupant." While there was "an experiment with intention" in caselaw between 1951 and 1985, orthodoxy was imposed through the decision in Street v Mountford (1985). Street v Mountford (1985) The landlord had conceded that exclusive possession had been granted (818D) •"Exclusive possession is of first importance in considering whether an occupier is a tenant; exclusive possession is not decisive because an occupier who enjoys exclusive possession is not necessarily a tenant." •According to Lord Templeman exceptions to exclusive possession include an "owner in fee simple, a trespasser, a mortgagee in possession, an object of charity or a service occupier", defining a "service occupier" as "a servant who occupies his master's premises in order to perform his duties as a servant. In those circumstances the possession and occupation of the servant is treated as the possession and occupation of the master and the relationship of landlord and tenant is not created". There needs to be exclusive possession in order for there to be a tenancy. In Street v Mountford, the landlord had conceded that exclusive possession had been granted (818D) so the point was not argued before the court, however this did not stop Lord Templeman dedicating quite a lot of his judgment to the question of exclusive possession. The general rule is that exclusive possession entitles the occupier to exclude all persons from the property including the landlord. It should be noted that the term is exclusive possession not occupation; possession being a much broader term, including the receipt of rents and profits from the property (see s205xix LPA 1925). In Street v Mountford Lord Templeman said (at 823D, quite late in the judgment): "Exclusive possession is of first importance in considering whether an occupier is a tenant; exclusive possession is not decisive because an occupier who enjoys exclusive possession is not necessarily a tenant." According to Lord Templeman exceptions to exclusive possession include an "owner in fee simple, a trespasser, a mortgagee in possession, an object of charity or a service occupier", defining a "service occupier" as "a servant who occupies his master's premises in order to perform his duties as a servant. In those circumstances the possession and occupation of the servant is treated as the possession and occupation of the master and the relationship of landlord and tenant is not created". Lord Templeman held that there would not be exclusive possession here if the landlord provides "attendance or services". In that situation, the person will be a lodger and the agreement will be a licence. "If on the other hand residential accommodation is granted for a term at a rent with exclusive possession, the landlord providing neither attendance nor services, the grant is a tenancy; any express reservation to the landlord of limited rights to enter and view the state of the premises and to repair and maintain the premises only serves to emphasise the fact that the grantee is entitled to exclusive possession ~ and is a tenant. In the present case it is conceded that Mrs. Mountford is entitled to exclusive possession and is not a lodger." (818 C-D) A lodger is a licensee. Four factual scenarios have emerged questioning whether or not there was exclusive possession. 1. Keys. Could the retention of keys by the landlord negative exclusive possession by the tenant? Lord Donaldson in Aslan v Murphy held, not necessarily: "Provisions as to keys do not have any magic in themselves ... what matters is what underlies the provisions as to keys. Why does the owner want a key?" So, for example, if the landlord retains a key for essential repairs, that does not negate a grant of exclusive possession. 2. Services including clean linen, tidying the property or meals. Lord Templeman in Street v Mountford held that in this case the occupier is likely to be a lodger, as the landlord requires unrestricted access to and use of the premises. This point was taken up by Lord Donaldson in Aslan, where he said: "if the true bargain is that the owner will provide genuine services which can only be provided by having keys, such as frequent cleaning, daily bed-making, the provision of clean linen at regular intervals and the like, there are materials from which it is possible to infer that the occupier is a lodger rather than a tenant. But the inference arises not from the provisions as to keys, but from the reason why those provisions formed part of the bargain." 3. Reserving the right to enter and inspect the property. This assumes, said Lord Templeman in Street v Mountford that exclusive possession has been granted, otherwise there would be no need for the landlord to reserve these limited rights of entry. 4. Alternative accommodation. Sometimes landlords reserve the right to move the occupier to an alternative property. While often such a clause would be a pretence occasionally it may negative a grant of exclusive possession. For example, in Westminster CC v Clarke the council managed a hostel and the House of Lords held that although Clarke, physically occupied his room in the hostel, he did not enjoy possession of it exclusively of the council. But this was a very special case - council housing a homeless person in transitory accommodation. Aslan v Murphy (No 1) [1990] 1 WLR 766 The agreement was for a basement room measuring 1.4m x 3.7m where the occupant was required to vacate the room between 10.30 and noon each day. The agreement also conferred the ability on "licensor" to introduce additional "licensee" to the room. And the "licensor" retained the keys. It was a lease. Lord Donaldson M.R. held that these two provisions (re vacating the premises and introducing new licensees) were "wholly unrealistic and were clearly pretences" (773 A). "A landlord may well need a key in order that he may be able to enter quickly in the event of emergency: fire, burst pipes or whatever. He may need a key to enable him or those authorised by him to read meters or to do repairs that are his responsibility. None of these underlying reasons would of themselves indicate that the true bargain between the parties was such that the occupier was in law a lodger. On the other hand, if the true bargain is that the owner will provide genuine services which can only be provided by having keys, such as frequent cleaning, daily bed-making, the provision of clean linen at regular intervals and the like, there are materials from which it is possible to infer that the occupier is a lodger rather than a tenant. But the inference arises not from the provisions as to keys, but from the reason why those provisions formed part of the bargain." So it depends on the circumstances of the case and the retention of keys does not automatically mean that, as an arrangement is a licence. Westminster City Council v Clarke [1992] 2 AC 288 This was a house for homeless residents with 31 single rooms, each with a bed and limited cooking facilities, which were used as a hostel for homeless single men, including men with personality disorders or physical disabilities. There was a warden supported by a team of social workers. There was an 11pm curfew and residents were allotted rooms. "This is a very special case which depends on the peculiar nature of the hostel maintained by the council" (Lord Templeman 302 B). He held that it was a licence. Shared exclusive possession A.G.Securities v Vaughan; Antoniades v Villiers [1990] 1 AC 417 (the two cases were heard together) (the HoL judgment starts at 460, you do not need to read the decisions in the CofA). In Vaughan four occupants were flat-sharing a four-bedroomed flat under four different agreements, each paying their own rent: "four separate agreements with four separate persons between 1982 and 1985" (460A). In Antoniades there were two occupants "living as husband and wife" who had entered separate but identical agreements at same time for an attic converted into furnished residential accommodation "comprising a bedroom, a bed sitting-room, kitchen and bathroom. The furniture in the sitting-room consisted of a bed-settee, a table-bed, a sideboard and a chair." (para 456D). The agreements were expressed to be licences and stated, inter alia, that the Rent Acts did not apply, that "the licensor is not willing to grant . . . exclusive possession" and that the use of the rooms was "in common with the licensor and such other licensees or invitees as [he] may permit from time to time to use the said rooms." At no time had he allowed any other occupant into the flat although he had consented to a friend of theirs staying in the flat for a period on the bed-settee. In both cases, the question was did the residents have exclusive possession and so a joint tenancy? Lord Templeman held that in Vaughan the four sharers did not, but in Antoniades the couple did have exclusive possession and a joint tenancy: "If a landlord who owns a three-bedroom flat enters into three separate independent tenancies with three independent tenants each of whom is entitled to one bedroom and to share the common parts, then the three tenants, if they agree, can exclude anyone else from the flat. But they do not enjoy exclusive occupation of the flat jointly under the terms of their tenancies. In the present case, if the four respondents had been jointly entitled to exclusive occupation of the flat then, on the death of one of the respondents, the remaining three would be entitled to joint and exclusive occupation. But, in fact, on the death of one respondent the remaining three would not be entitled to joint and exclusive occupation of the flat. They could not exclude a fourth person nominated by the company." (460G-H). "In [Vaughan] the four agreements were independent of one another. In [Antoniades] the two agreements were interdependent. Both would have been signed or neither. The two agreements must therefore be read together. Mr. Villiers and Miss Bridger applied to rent the flat jointly and sought and enjoyed joint and exclusive occupation of the whole of the flat. They shared the rights and the obligations imposed by the terms of their occupation. They acquired joint and exclusive occupation of the flat in consideration of periodical payments and they therefore acquired a tenancy jointly." (460H-461A) Lord Jauncey also held that the four residents did not have exclusive possession together: "there were four licence agreements relative to shared occupation of the flat which did not in aggregate confer exclusive possession thereof upon the four defendants." (474G) In Antoniades, Lord Templeman considered clause 16: "The licensor shall be entitled at any time to use the rooms together with the licensee and permit other persons to use all of the rooms together with the licensee." "Clause 16 is a reservation to Mr. Antoniades of the right to go into occupation or to nominate others to enjoy occupation of the whole of the flat jointly with Mr. Villiers and Miss Bridger. Until that power is exercised Mr. Villiers and Miss Bridger are jointly in exclusive occupation of the whole of the flat making periodical payments and they are therefore tenants. The Rent Acts prevent the exercise of a power which would destroy the tenancy of Mr. Villiers and Miss Bridger and would deprive them of the exclusive occupation of the flat which they are now enjoying. Clause 16 is inconsistent with the provisions of the Rent Acts." (462D) "Clause 16 was not a genuine reservation to Mr. Antoniades of a power to share the flat and a power to authorise other persons to share the flat. Mr. Antoniades did not genuinely intend to exercise the powers save possibly to bring pressure to bear to obtain possession. Clause 16 was only intended to deprive Mr. Villiers and Miss Bridger of the protection of the Rent Acts. Mr. Villiers and Miss Bridger had no choice in the matter. ... Mr. Villiers is reported as saying that: "He [Mr. Antoniades] kept going on about it being a licence and not in the Rent Act. I didn't know either but was pleased to have a place after three or four months of chasing." The notes of Miss Bridger's evidence include this passage: "I didn't understand what was meant by exclusive possession or licence. Signed because so glad to move in. Had been looking for three months." (Lord Templeman, 462F-G) Antoniades were protected - interdependent as opposed to independent In Street v. Mountford [1985] A.C. 809, 825, I said "Although the Rent Acts must not be allowed to alter or influence the construction of an agreement, the court should, in my opinion, be astute to detect and frustrate sham devices and artificial transactions whose only object is to disguise the grant of a tenancy and to evade the Rent Acts." It would have been more accurate and less liable to give rise to misunderstandings if I had substituted the word "pretence" for the references to "sham devices" and "artificial transactions ... The facts must prevail over the language in order that the parties may not contract out of the Rent Acts. In the present case clause 16 was a pretence." (Lord Templeman, 462H-463D) Lord Oliver: "There is an air of total unreality about these documents read as separate and individual licences in the light of the circumstance that the appellants were together seeking a flat as a quasi-matrimonial home. A separate licensee does not realistically assume responsibility for all repairs and all outgoings. Nor in the circumstances can any realistic significance be given to clauses 16 and 17 of the document. It cannot realistically have been contemplated that the respondent would either himself use or occupy any part of the flat or put some other person in to share accommodation specifically adapted for the occupation by a couple living together... The unreality is enhanced by the reservation of the right of eviction without court order, which cannot seriously have been thought to be effective, and by the accompanying agreement not to get married, which can only have been designed to prevent a situation arising in which it would be quite impossible to argue that the "licensees" were enjoying separate rights of occupation." (467H-468C) The difference between the two cases was that in Vaughan, the documents reflected the reality of the situation, whereas in Villiers they did not. In Vaughan, the reality of the situation was that these were genuinely independent agreements to cater for a fluctuating body of people occupying the same household. While it was accepted that there could have been separate tenancies of a part of the house, this did not occur in the present case, perhaps because the practice was that, when one of the occupants left, the remaining occupants chose whether they wished to move into the vacated room. Neither could they, collectively, be seen as joint tenants, as there was no unity of time, title, or interest between them. In Villiers, on the other hand, the view was taken that 'the two agreements were interdependent. Both would have signed or neither. The two agreements must therefore be read together.' Reading them together, the effect was that the couple were joint tenants, each being jointly and severally liable for the rent. The provision in the agreements to introduce a third person into the property was seen as being quite unrealistic and, in any event, as the original agreement had been held to create a joint tenancy, the introduction of a third person was not something which the landlord could do. To do this would have involved the termination of the original lease and the creation of a new licence and this is not permitted by the Rent Act 1977." The Four Unities for a joint tenancy (Interest, Title, Time (move in same time), Possession (be entitled to use all of the house) have in Antoniades but not in Vaughan Lord Jauncey and Lord Oliver also referred to the four unities in their decision in Vaughan and Antoniades (although Lord Templeman did not). The used the principle to confirm their findings. Lord Jauncey: "I should be surprised indeed if a joint lease could be created by four separate documents of different dates in favour of four independent persons each paying a different rent and also for different periods of six months. Such an arrangement would... be notably deficient in the four unities of interest, title, time and possession." (474F). Lord Oliver: "... No unity of interest, no unity of title, certainly no unity of time and no unity of possession". Rejects "the strange and unnatural theory that, as each occupant terminates his agreement, there is an implied surrender by the other three and an implied grant of a new joint tenancy to them together with the new incumbent when he enters under his individual agreement." (472 A-C) Exclusive Possession v Exclusive Occupation Exclusive possession is different from exclusive occupation. Exclusive occupation means that the person living there is able enjoy the property and exclude third parties but not the landlord. This pretty clear distinction - between exclusive possession (which can exclude the landlord) and exclusive occupation (which cannot exclude the landlord) was sadly muddled by Lord Templeman in Antoniades and Vaughan where he used the term "exclusive occupation" throughout the judgment rather than the term "exclusive possession" as he had done in Street. The most recent law on distinction between exclusive possession and exclusive occupation is the Court of Appeal decision in Watt v Stewart, where Sir Terence Etherton said: "there is a distinction between legal exclusive possession or a legal right of exclusive possession, on the one hand, and a personal right of exclusive occupation, on the other hand ... Legal exclusive possession entitles the occupier to exclude all others, including the legal owner, from the property. Exclusive occupation may, or may not, amount to legal possession. If it does, the occupier is a tenant. If it does not, the occupier is not a tenant and occupies in some different capacity." (para 31) In Watts v Stewart the Court of Appeal held that Mrs Watts had only exclusive occupation, not possession, and was not a tenant (also on intention). Exclusive possession is the right to exclude all (including the landlord, apart from emergencies etc.) from a property. The term is not defined in the LPA (s205, the definitions section). Exclusive possession is a prerequisite of a tenancy, rather than a consequence (Hill, MLR, 1989, 409). Watts v Stewart (2016) Mrs Watts lived in an almshouse owned by the Trustees of Ashtead United Charity. She engaged in anti-social behaviour and caused disturbance for other residents. Was she a tenant? Specifically, did she have a "tenancy at will"? (see above p.4 for a definition of tenancy at will). The Court of Appeal held that she did not have exclusive possession and so was not a tenant at will in the way her barrister (Mark Wonnacott) had suggested. Sir Terence Etherton MR: "Mr Wonnacott's starting point on this issue was that Lord Templeman (with whom all the other members of the Judicial Committee agreed) in Street v Mountford [1985] 1 AC 809 was correct when he said (at page 818E) that there can be no tenancy unless the occupier enjoys exclusive possession, but he was plainly wrong when he said: "an occupier who enjoys exclusive possession is not necessarily a tenant. He may be ... an object of charity" (para 28) [An object of charity is someone who receives charity, for example, good housing at a lower rental rate]." Sir Terence Etherton did not accept this argument by the barrister: "Mr Wonnacott's attack on that part of the speech of Lord Templeman is bold, not least because he was unable to refer us to any authority or scholarly commentary in support of his criticism." (para 30) He rejects the authority cited by Mark Wonnacott of Earl of Pomfret case in1752. More importantly, Sir Terence Etherton went on to confirm a distinction between exclusive possession and exclusive occupation: "there is a distinction between legal exclusive possession or a legal right of exclusive possession, on the one hand, and a personal right of exclusive occupation, on the other hand ... Legal exclusive possession entitles the occupier to exclude all others, including the legal owner, from the property. Exclusive occupation may, or may not, amount to legal possession. If it does, the occupier is a tenant. If it does not, the occupier is not a tenant and occupies in some different capacity. In the reported cases, including the passage in Street v Mountford which Mr Wonnacott has criticised, the expression "exclusive possession" does not refer to legal possession but to exclusive occupation" (para 35). So exclusive possession entitles the occupier to exclude all others including the legal owner (ie. the landlord). Legal occupation does not allow the occupier to do this. Here, Mrs Watts was not a tenant at will in part as she didn't have exclusive possession (she only had occupation): "The status of a beneficiary occupying trust property will depend upon the terms and conditions on which the occupation was permitted... the terms on which Mrs Watts was permitted to occupy the property excluded the grant of legal possession. There is simply no scope in those circumstances to infer the grant of a tenancy at will" (para 45) While the almshouse factual context is an unusual one, in an exam setting, the key points to be taken from Watts v Stewart are the distinction between exclusive possession and exclusive occupation and the emphasis Sir Terence Etherton placed on the types of situations Lord Templeman set out in Street v Mountford which would negative the intention to create a tenancy e.g. being in receipt of charity (as the Mrs. Watts was here, living in an almshouse)

Term

Fixed - a 12 month term - Periodic - weekly, monthly or annual Tenancies 1. Fixed term leases are leases for a fixed term. So, if your tenancy is for six or 12 months, that is the fixed term. According to the common law, it ends at the end of the fixed term. However, statute intervenes in the types of tenancies you have so that it can in fact run on. 2. Periodic tenancies are tenancies for a period which roll on at the end of the first term. So, for example, a weekly tenancy has a period of one week, but rolls on to further periods of one week, until either party determines it. Where a person goes into occupation of property and pays a weekly fee for it, the law usually implies the creation of a weekly tenancy that it takes from the rental period unless there is contrary evidence. A periodic tenancy ends on the giving of notice. Uncertainty of Term Leases should have a certain term. The history of this rule is set out by Lord Neuberger in Mexfield Housing Co-op v Berrisford [2011] UKSC 52 in paras 23-33. This can mean either that a lease would not automatically be valid if the term itself is uncertain (as in Lace v Chantler) or that the terms of the lease may be incompatible with certainty of duration (as in Mexfield v Berrisford or Southward Cooperative where there was a "fetter" on the parties' ability to end the agreement, so that the agreement couldn't take effect as a weekly periodic or any tenancy). A fetter is a restriction or constraint ie. one or both of the parties are unable or wouldn't know when they are able to determine (ie. end) the tenancy. The simple version of the rule that leases should have a certain term was set out in Lace v Chantler. Lace v Chantler [1944] K.B. 368 - A tenancy "for the duration of the war". Was this a sufficiently certain term? The House of Lords held not. "Normally there could be no question that this was an ordinary weekly tenancy, duly determinable by a week's notice, but the parties in the rent-book agreed to a term which appears there expressed by the words "furnished for duration", which must mean the duration of the war. The question immediately arises whether a tenancy for the duration of the war creates a good leasehold interest. In my opinion, it does not. A term created by a leasehold tenancy agreement must be expressed either with certainty and specifically or by reference to something which can, at the time when the lease takes effect, be looked to as a certain ascertainment of what the term is meant to be. In the present case, when this tenancy agreement took effect, the term was completely uncertain. It was impossible to say how long the tenancy would last." (Lord Greene MR, at 370) - Lord Greene said that the uncertainty would have been cured if the lease had been granted for a life tenancy terminable at the end of the war (371) but that had not been done. That would have been certain because, at the outset, you could see that the lease could not last for longer than the person's life. As the clause was drafted, the term was too uncertain, and it could not be a lease. - As these types of leases were quite common, section 1 of the Validation of Wartime Leases Act 1944, s. 1 was introduced, which rescued these types of leases by converting them into ten-year leases determinable by either party giving one month's notice to the other to determine the lease upon the end of hostilities. This was a practical legislative solution to the common law problem giving certainty to these leases which the parties (or their drafters) had failed to confer. - In 1992, the certainty rule was reviewed in Prudential Assurance, where it was upheld (albeit with significant doubts) and the interrelation of fixed and periodic tenancies was emphasised. "whichever is earlier" enables the parties to know how the lease is to be determined (ie. ended) Prudential Assurance v London Residuary Body [1992] 2 AC 386 - first look for fixed then periodic — - Uncertainty of term rule is confirmed - Even if no fixed tenancy, might be a periodic tenancy - Periodic tenancies are not uncertain - In 1930 the owner of a strip of land fronting a highway sold the land to the council, which contemporaneously leased it back to him upon terms set out in a memorandum of agreement providing in clause 6 that "the tenancy shall continue until the . . . land is required by the council for the purposes of the widening of" the highway. On that condition being satisfied, the agreement could be determined on two month's notice. Prudential paid rent of £30 per annum. By the time the London Residuary Body took the property, they had no road-widening powers as they were not a highway authority. Lord Templeman, 299H - 390A: "By the agreement, the tenant was authorised to erect "temporary one-storey shops or buildings of one storey and for the retention of such shops or buildings as temporary structures" until the land was required for road widening and he was then bound to remove the temporary structures and clear the land. The council agreed to pay all the costs of road making and paving works. The agreement was clearly intended to be of short duration and could have been secured by a lease for a fixed term, say five or ten years with power for the landlord to determine before the expiry of that period for the purposes of the road widening. Unfortunately the agreement was not so drafted. Over 60 years later Walworth Road has not been widened ... the defendants have no road making powers and it does not appear that the road will ever be widened." - In the House of Lords, Lord Templeman made it clear that the restriction on termination invalidated the fixed term lease: "When the agreement in the present case was made, it failed to grant an estate in the land" (Lord Templeman, 392A), because of the uncertainty of term, following Lace v Chantler. - However, Lord Templeman held that there was a periodic tenancy here because once the lease was held void; there was unexplained possession on the land with the payment of rent, which implied a periodic tenancy: (in possession and paying rent- periodic tenancy- to end it, the landlord need to serve a notice to quit) "The tenant however entered into possession and paid the yearly rent of £30 reserved by the agreement. The tenant entering under a void lease became by virtue of possession and the payment of a yearly rent, a yearly tenant holding on the terms of the agreement so far as those terms were consistent with the yearly tenancy. A yearly tenancy is determinable by the landlord or the tenant at the end of the first or any subsequent year of the tenancy by six months' notice unless the agreement between the parties provides otherwise." (392 B-C) - So there was a yearly, periodic tenancy here, determinable by the landlord or the tenant by six months notice after the first year unless the agreement said otherwise (which it did not). The landlord had served such a notice (to end the tenancy). Why? Lord Templeman explains - why he is going to uphold the rule on certainty of term - why periodic tenancies are not uncertain "My Lords, I consider that the principle in Lace v. Chantler [1944] K.B. 368 reaffirming 500 years of judicial acceptance of the requirement that a term must be certain applies to all leases and tenancy agreements. A tenancy from year to year is saved from being uncertain because each party has power by notice to determine at the end of any year. The term continues until determined as if both parties made a new agreement at the end of each year for a new term for the ensuing year. A power for nobody to determine or for one party only to be able to determine is inconsistent with the concept of a term from year to year ... there was no "clearly expressed bargain" that the term should continue until the crack of doom if the demised land was not required for the landlord's undertaking or if the undertaking ceased to exist. In the present case there was no 'clearly expressed bargain' that the tenant shall be entitled to enjoy his 'temporary structures' in perpetuity if Walworth Road is never widened. In any event principle and precedent dictate that it is beyond the power of the landlord and the tenant to create a term which is uncertain. A lease can be made for five years subject to the tenant's right to determine if the war ends before the expiry of five years. A lease can be made from year to year subject to a fetter on the right of the landlord to determine the lease before the expiry of five years unless the war ends. Both leases are valid because they create a determinable certain term of five years. A lease might purport to be made for the duration of the war subject to the tenant's right to determine before the end of the war. A lease might be made from year to year subject to a fetter on the right of the landlord to determine the lease before the war ends. Both leases would be invalid because each purported to create an uncertain term. A term must either be certain or uncertain. It cannot be partly certain because the tenant can determine it at any time and partly uncertain because the landlord cannot determine it for an uncertain period. If the landlord does not grant and the tenant does not take a certain term the grant does not create a lease." (393H onwards) Lord Templeman here emphasises that a "term of years absolute", a lease, must be certain and any ability to determine it must also be expressed in a way that is certain (see the quote above). If a term is uncertain, there is no fixed lease (tenancy). A periodic tenancy, however, can be certain because each party has power by notice to determine at the end of the period (in this case, at the end of any year). Although there was no fixed tenancy here, a periodic tenancy was implied. As the landlord had served a notice to quit the periodic tenancy, it could be brought to an end. Lord Browne-Wilkinson added his views (with which Lords Griffiths and Mustill agreed): "As a result of our decision Mr. Nathan's successor in title will be left with the freehold of the remainder of No. 263-265 which, though retail premises, will have no frontage to a shopping street: the L.C.C.'s successors in title will have the freehold to a strip of land with a road frontage but probably incapable of being used save in conjunction with the land from which it was severed in 1930, i.e. the remainder of No. 263-265. It is difficult to think of a more unsatisfactory outcome or one further away from what the parties to the 1930 agreement can ever have contemplated. Certainly it was not a result their contract, if given effect G to, could ever have produced. If the 1930 agreement had taken effect fully, there could never have come a time when the freehold to the remainder of No. 263-265 would be left without a road frontage. This bizarre outcome results from the application of an ancient and technical rule of law which requires the maximum duration of a term of years to be ascertainable from the outset. No one has produced any satisfactory rationale for the genesis of this rule. No one has been able to point to any useful purpose that it serves at the present day. If, by overruling the existing authorities, this House were able to change the law for the future only I would have urged your Lordships to do so. But for this House to depart from a rule relating to land law which has been established for many centuries might upset long established titles. I must therefore confine myself to expressing the hope that the Law Commission might look at the subject to see whether there is in fact any good reason now for maintaining a rule which operates to defeat contractually agreed arrangements between the parties (of which all successors in title are aware) and which is capable of producing such an extraordinary result as that in the present case." (396H - 397A) The picture of 263-265 Walworth Road in the lecture illustrates this (practical) point. Mexfield Housing Co-op v Berrisford [2011] UKSC 52 Mexfield Housing Co-operative's standard form occupancy agreement purported to grant a tenancy from month to month which was terminable by Ms Berrisford giving one month's notice to quit (clause 5), and was terminable by Mexfield only in the following circumstances (clause 6) including failure to pay rent, failure to perform any conditions or provisions of the Agreement, if the Member ceases to be a member of the Association or if a resolution is passed under the Association's Rules regarding a proposal to dissolve the Association. In short, the tenancy here was described as a monthly tenancy, but in circumstances where a notice to quit could only be given in limited circumstances and where there was also a standard forfeiture clause. In 2008, Mexfield served a notice to quit on Mrs. Berrisford owing to rent arrears (which were subsequently paid) and began possession proceedings. In the Supreme Court, Mexfield relied on the decision in Prudential Assurance Co Ltd v London Residuary Body (1992) as authority for the proposition that a term of uncertain duration cannot create a lease and that consequently, the entire occupancy agreement was void (including clause 6). In the absence of the agreement, Mrs Berrisford enjoyed exclusive occupation of the property from month to month. By implication, this amounted to a monthly periodic tenancy in accordance with Street v Mountford and Prudential. Such a tenancy, the argument went, would be terminable by notice to quit at the end of the period (ie. at the end of the month). The Supreme Court held that the periodic tenancy contained invalid terms (clauses 5 and 6, in relation to ending the tenancy) but that as the common law, pre-1925 would have converted this tenancy into a tenancy for life, so too now did s149(6) LPA 1925. Section 149(6) LPA: "Any lease or underlease, at a rent, or in consideration of a fine, for life or lives or for any term of years determinable with life or lives . . . made before or after the commencement of this Act . . . shall take effect as a lease, underlease or contract therefor, for a term of 90 years determinable . . . by at least one month's notice in writing given to determine the same . . ." How does the conversion from a periodic tenancy into a 90 year tenancy for life happen? Lord Neuberger says (in para 36) that this is the effect of s149(6) LPA 1925 (if got tenancy for life no one knows how long going to live so just place it at 90 years: "...this provision effectively converts a life tenancy into a determinable term of 90 years. A tenancy for life is a term of uncertain duration, and it was a species of freehold estate prior to 1926, but, in the light of section 1 of the 1925 Act, if it was to retain its status as a legal estate, it could only be a term of years after that date. Presumably it was converted into a 90-year term because those responsible for drafting the 1925 Act thought it could not be a term of years otherwise." The judgment then is that s149(6) LPA 1925 converts an uncertain periodic tenancy into a tenancy for life (of 90 years) for individuals - can only apply to people not to companies. This seems to challenge both the ratio in Lace v Chantler as well as ignore the solution offered by Prudential Assurance (an implied periodic tenancy). The decision gave Mrs. Berrisford great security. Had there been no lease (as in Lace v Chantler, she could have been evicted following the service by Mexfield of a notice to quit) and had there been a periodic tenancy (as in Prudential Assurance, as Mexfield's lawyers argued) she could have been evicted following the service by Mexfield of a notice to quit at the end of the period (in this case she paid rent monthly). Why didn't the Supreme Court in Mexfield change the rule on uncertain term? Lord Neuberger gives five reasons for this (paras 35-37): 1.For many centuries the prohibition on uncertain terms has been regarded as fundamental; 2.The 1925 Act appears to support this conclusion in s1, 149 and 205; 3.The certainty requirement was confirmed only some 20 years ago by the House of Lords (in Prudential Assurance); 4."[W]hile not a very attractive point, there is the concern expressed by Lord Browne-Wilkinson, at p 397A, namely that to change the law in this field "might upset long established titles". 5.At least where the purported grant is to an individual, as opposed to a company or corporation, the arrangement does in fact give rise to a valid tenancy, as explained below. ie. there is a solution - s149(6) Should we still have the uncertainty of term rule? There is widespread judicial, academic and professional agreement that the certainty of term rule is undesirable. However, it is still binding and courts have been ingenious at finding ways around it (see notably the criticism in Prudential and in Mexfield). In particular, a distinction has developed between agreements with an apparently uncertain term where the tenant is a corporation and agreements where the tenant is a person. Lady Hale's reasons for not changing the rule (para 96) are "leave it to Parliament": "it seems to me obvious that the consequence of our having reached the conclusions which we have on the first issue is to make the reconsideration of the decision in the Prudential case [1992] 2 AC 386, whether by this court or by Parliament, a matter of some urgency. As former Law Commissioner Stuart Bridge has argued [2010] Conv 492, 497: 'If the parties to a periodic tenancy know where they stand, in the sense that the contract between them is sufficiently certain, then that should be enough. If a landlord, in this case a fully mutual housing association, decides that its tenants should be entitled to remain in possession unless and until they fall into arrears with their rent or break other provisions contained in the tenancy agreement, it is difficult to see what policy objectives are being furthered in denying the tenant the rights that the agreement seeks to create.' Corporation: If the term is uncertain and the occupier is a corporation then if the tenant is in possession and paying a periodic rent, a periodic tenancy may be implied (as in Prudential Assurance). Person: If the term is uncertain and the occupier an individual (ie. not a corporation), then it may be a tenancy for 90 years subject to earlier termination in accordance with the contract (under s149(6) LPA 1925, as in Mexfield v Berrisford). Is Mexfield v Berrisford good law? It is certainly binding as the Supreme Court decided it in 2011 but it has been criticised. The decision does not apply to "tenancies which were capable of standing on their own two feet as legal estates without statutory help" (per Laing J in Hertfordshire CC v Davies [2017] EWHC 1488, citing Lord Walker in Mexfield (para 84)). HHJ Paul Matthews doubted Mexfield in Gilpin v Legg [2017] EWHC 3220. The decision was worked around in Southward, another first instance decision. Southward Cooperative v Walker [2015] EWHC 1615 - goes for contractual analysis - about parties' intentions Hildyard J interpreted Mexfield more narrowly in Southward Cooperative v Walker The claimant, a fully mutual housing association, granted a weekly tenancy of a residential property to the Walkers. The term was alleged to be uncertain as the grounds on which the Cooperative could give a notice to quit (and so end the tenancy) included a persistent delay on paying rent. This is only a first instance decision (Southward Cooperative decided not to appeal) and Hildyard J found a contractual licence instead of a tenancy. The reason it is significant, however, is that it provides a way round Mexfield (though this is itself not uncontroversial). Hilyard J cites Lord Neuberber, in para 17 of Mexfield, where his Lordship said that: "a tenancy agreement has to be interpreted in the same way as any other written contract, so the precise rights and obligations of the parties under it must depend on the terms which the parties have agreed and the circumstances in which they were agreed. However, in some circumstances, there may be principles of law which result in the parties' intentions being frustrated or modified, and, as is clear from the reasoning in Street v Mountford [1985] AC 809, the legal consequences of what the parties have agreed is a matter of law rather than dependent on what the parties intended." Hildyard J draws on this and then concludes that (91-93 ff): "I have concluded that the "rule" [in s149(6)] does not depend for its application on the parties' intentions; but the judgments of the Supreme Court in the Mexfield case leave open the possibility that it may be disapplied where those intentions and fundamental aspects of their agreement would be confounded by it. I am fortified in this conclusion by the consideration that the origin of the "rule" must have been intended to save agreements that would otherwise fail, in accordance with the maxim "ut res magis valeat quam pereat", not to destroy the essence of their bargain and foist on them a long term relationship against their will and which one of them may not be able to terminate. Further, even though not perhaps directly in point, cases such as Lace v Chantler ..., do at least serve to illustrate and emphasise the ordinary reluctance (in each case, in fact, refusal) of the court to foist on the parties a "new bargain which neither of the parties ever intended to enter into" (per Lord Greene MR in Lace v Chantler, at p 372)." ["ut res magis valeat quam pereat" means it is better for a thing to have effect than to be made void]. So Hildyard J. holds that if there is no other solution, s149(6) LPA would apply but that courts should not change the terms of the contract between the parties. This approach offers something of a compromise position. S149(6) is not a "rule" but should be applied if the arrangement would otherwise be void although the courts should not re-write the parties bargain if an alternative solution (in Southward Cooperative, a contractual licence) is available. Woodfall distinguishes Southward Coop v Walker from Mexfield as follows: "[Noting the uncertainty of term in both cases]...where it was considered that this case differs from Mexfield is in the next stage of the analysis, as to whether this means that a tenancy for life must have arisen. In Mexfield, the Supreme Court concluded that it was indeed intended that in the circumstances of that case, the tenant should enjoy the premises on a lease for life, determinable by the tenant on one month's notice and by the landlord on the happening of certain events. So, there, the Supreme Court did not have to grapple with the conundrum where that is not the intention of the parties and whether notwithstanding that absence of intention, the "inexorable application of a rule that transmogrifies into a 90 year term an agreement that is incapable of constituting a tenancy ... defeats the intention of the parties." This raises a difficult question of law that did not arise for decision in Mexfield. Hildyard J, "with diffidence and anxiety" held that where the application of the rule would be contrary to the parties' intentions, it should not apply. Accordingly, it was held that the agreement should be treated not as a lease for life but rather a contractual licence." Some people dislike this approach as much as others dislike Mexfield. Mark Thompson, for example, in the previous edition of Thompson's Land Law wrote at p.378: "This decision introduces an unwelcome aspect of uncertainty into an area where, it had been thought, such problems had been significantly reduced." Instead, he found the solution to the problem in s149(6) LPA 1925. In the latest edition of Thompson, I was much more sympathetic towards Southward but you should use your own judgement! [Note, spelling judgement/judgment - if you use your own critical faculties, you exercise judgement, if you are writing about a case it's a judgment [no "e']. As a biographical curiosity, it is worth noting that Lord Neuberger (David Neuberger Q.C. as he then was) was the losing barrister in Prudential Assurance in the House of Lords, asking, rhetorically back then: "what is actually wrong with a tenancy of uncertain duration?" But when Lord Neuberger was in the Supreme Court, with the opportunity to overrule the rule on certainty of leases, he declined to do so (for quite understandable separation of powers reasons). Woodfall note on Southward: "In the end, all lines of defence failed and an order for possession was made. However, this case is ripe for consideration by the appellate courts and the numerous and wide-ranging issues are likely to be revisited if the defendants choose to appeal." How do Lace v Chantler, Prudential Assurance & Mexfield v Berrisford sit together? Lord Neuberger says (in para 52) that they are compatible because s149(6) LPA 1925 was not argued before the court in either Lace v Chantler or Prudential Assurance: "The fact is that it was not argued in either of those two cases that the arrangement involved would have created a life tenancy as a matter of common law, and that, following section 149(6), such an arrangement A would now give rise to a 90-year term, determinable on the tenant's death (and Mr Wonnacott was kind enough to point out that such an argument would not have assisted, and may even have harmed, the unsuccessful respondent's case in the Prudential case). Some of the statements about the law by Lord Greene MR and Lord Templeman can now be seen to be extravagant or inaccurately wide, but it is only fair to them to repeat that this was, at least in part, because the tenancy for life argument was not raised before them." Section 149(6) was not argued before the court in Lace v Chantler (concerning an individual) and could not be for Prudential Assurance concerning a company (see Lady Hale's point on this at paras 92-93, noting that as it was a company and the company owner had already died by the time the litigation took place, this would not have helped the Prudential in their argument). Because s149(6) LPA 1925 was not argued, there is no inconsistency according to Lord Neuberger. You should know that not everyone agrees with this suggestion. One question here is whether the rule in s149(6) applies to all uncertain periodic tenancies or whether it depends on the factual matrix of the case. While Lord Neuberger sets it out as a general rule, Lady Hale (who agrees with Lord Neuberger) ties it to the intention of the parties saying that in this case the 90-year tenancy did accord with the intentions of the parties. (Mexfield was a Housing Cooperative aimed at providing secure housing for people who could not pay their mortgages (see Mexfield para 1). It was, in other words, a very unusual kind of landlord. However, in para 94, Lady Hale also seems to see it as a general rule noting that it could apply to parties who did not have this intention, though she notes that it is always open to them to contract out of it, fixing a maximum term instead, determinable by a prior event (whenever that might happen): "As it happens, in the particular agreement with which we are concerned, it is not difficult to conclude that the parties did in fact intend a lease for life determinable earlier by the tenant on one month's notice and by the landlords on the happening of certain specified events. So our conclusions are in fact reflecting the intentions of the parties. But it is not difficult to imagine circumstances in which the same analysis would apply but be very far from the intentions of the parties. And that analysis is not available where the tenant is a company or corporation. So there the court is unable to give effect to the undoubted intentions of the parties. Yet, as the court pointed out in the Midland Railway case, it is always open to the parties to give effect to those intentions by granting a very long term of years, determinable earlier on the happening of the uncertain event. The law, it would seem, has no policy objection to such an arrangement, so it is difficult to see what policy objection it can have to upholding the arrangement to which the parties in fact came." If we think of a lease as both property and a contract, then it is always open to parties to negotiate terms. As Lady Hale says, the parties have to negotiate something a bit odd: "a very long term of years, determinable earlier on the happening of the uncertain event", but it can be done. One problem of course is that thousands of leases - like Mrs Berrisford's - have already been completed and are now (effectively) 90 year leases for lives (even though few people might realise this). Also, just as there is a distinction between a lease and a licence, there is in housing law a difference between different types of tenancies, in particular a tenancy from a housing association (colloquially, a "social housing tenancy") is a statutory tenancy that protects the tenant - and cannot be ended as easily - as a private landlord's assured shorthold tenancy. Lord Hope, makes this point, held that if English housing law were the same as Scottish housing law (which it is not) it would be open to Mexfield to register as a social housing provider, creating a secure tenancy for Mrs. Berrisford (975E-976A ("it is normal practice for eligible bodies to apply for registration"). This is not possible in England but it shows that there are other policy options available to cure situations like Mrs. Berrisford's but of course this too would require Parliamentary time and interest. Why didn't the Supreme Court in Mexfield change the rule on uncertain term? Lord Neuberger gives five reasons for this (paras 35-37): 1. For many centuries the prohibition on uncertain terms has been regarded as fundamental; 2. The 1925 Act appears to support this conclusion in s1, 149 and 205; 3. The certainty requirement was confirmed only some 20 years ago by the House of Lords (in Prudential Assurance); 4. "[W]hile not a very attractive point, there is the concern expressed by Lord Browne- Wilkinson, at p 397A, namely that to change the law in this field 'might upset long established titles'." 5. At least where the purported grant is to an individual, as opposed to a company or corporation, the arrangement does in fact give rise to a valid tenancy, as explained below. ie. there is a solution - s149(6) Lady Hale's reasons for not changing the rule (para 96) are "leave it to Parliament": "... it seems to me obvious that the consequence of our having reached the conclusions which we have on the first issue is to make the reconsideration of the decision in the Prudential case [1992] 2 AC 386, whether by this court or by Parliament, a matter of some urgency. As former Law Commissioner Stuart Bridge has argued [2010] Conv 492, 497: 'If the parties to a periodic tenancy know where they stand, in the sense that the contract between them is sufficiently certain, then that should be enough. If a landlord, in this case a fully mutual housing association, decides that its tenants should be entitled to remain in possession unless and until they fall into arrears with their rent or break other provisions contained in the tenancy agreement, it is difficult to see what policy objectives are being furthered in denying the tenant the rights that the agreement seeks to create.' Quite so." Prudential Assurance, in other words, was too recent and Parliament has not intervened. Had the Supreme Court changed in the rule in Mexfield, this might have raised quite sharp questions about the separation of powers. McFarlane et al write (at p781): "Whatever one's view as to the effect or validity of the Supreme Court's reasoning in Berrisford, one can also ask if, rather than adopting a technical work-around to the certainty of term rule, it would be simpler and better to remove the rule itself. It must be emphasized that, as the Supreme Court was not asked by either party to overrule Prudential Assurance, it would have been inappropriate for it to do so. Nonetheless, it may seem odd that the law is left with a rule for which judges in the highest court in the land have twice been unable to find a persuasive justification." Fred agreed with Barney in June 2016, inviting him to rent Flint Cottage "until the Brexit negotiations are completed", paying £500 a month in rent. Both Fred and Barney signed the agreement, which incorporated the terms. This included a clause saying that Barney could serve a notice to quit whenever the sky is green. Barney moved in and has been paying him rent ever since. Now, however, Fred has said that he is going to need Flint Cottage to rent to students as he needs the money. Can Fred evict Barney without serving a notice to quit? Two uncertain terms - when Brexit negotiations are completed & when the sky is green (not clear how to determined) Need certainty of term & to know how to determine the lease - Lace v Chantler Even if a fixed term tenancy isn't possible, there might be a periodic tenancy - Prudential Assurance. Is the tenancy a tenancy for life following Mexfield? Or should we look to the terms of the contract/intentions of the parties as suggested in Southward v Walker? TERM •Lace v Chantler [1944] KB 368 •Prudential Assurance Co. Ltd v LRB [1992] 2 AC 386 •Mexfield Housing Co-op v Berrisford [2011] UKSC 52 •Southward Coop v Walker [2015] EWHC 1615 + Uncertain term = tenancy for life Lace v Chantler - an uncertain duration ("for the duration of the war") cannot be a valid term and so there is no lease. Prudential - a term that cannot be validly determined (ended) cannot be a certain fixed term but if the occupant is in possession and paying rent on a periodic basis, then it can be a periodic tenancy. Mexfield v Berrisford - a term that cannot be validly ended cannot be a valid fixed term but if the tenant is a human (ie. not a company) and they are in possession then although, per Lord Neuberger, the arrangement could not take effect as a tenancy according to its terms, then "by virtue of well-established common law rules and s149(6), the arrangement is a tenancy for a term of 90 years determinable on the tenant's death ..." (para 54). This was in effect a work around Prudential bc the SC didn't want to just give Mrs Berrisford a monthly periodic tenancy: "given the circumstances in which the agreement was entered into, it seems unlikely that Ms Berrisford's security was intended to be so tenuous as to be determinable by Mexfield on one month's notice at any time from the day the agreement was made" (para 19). Southward Coop v Walker - Hildyard J held that s149(6) LPA 1925 was not a rule and that "the judgments of the Supreme Court in the Mexfield case leave open the possibility that it may be disapplied where those intentions and fundamental aspects of their agreement would be confounded by it" (by drawing on Lord Neuberger in para 17 in Mexfield) if the agreement would otherwise fail since "ut res magis valeat quam pereat" ie. "it is better for a thing to have effect than to be made void".

Human rights

Hammersmith v Monk (1992) was decided before the Human Rights Act 1998. On similar facts, in Sims v Dacorum (2014), Mr. Sims who was in a similar position as Mr. Monk, argued that the decision, or the effect of the decision, in Hammersmith v Monk should be reconsidered. Mr. Sims argued that his rights (a) to respect for his home under article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms and/or (b) peacefully to enjoy his possessions under article 1 of the First Protocol to the Convention ("A1P1") would be wrongly infringed if Dacorum BC's claim succeeded. Article 8, ECHR Right to respect for private and family life 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic wellbeing of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. Article 1, Protocol 1 Protection of property Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties. Sims v Dacoram BC [2015] AC 1336 Lord Neuberger rejected Mr. Sims' human rights claim. "Given that Mr Sims was deprived of his property in circumstances, and in a way, which was specifically provided for in the agreement which created it, his A1P1 claim is plainly very hard to sustain. The point was well put in the written case of Mr Chamberlain QC on behalf of the Secretary of State: 'the loss of [Mr Sims's] property right is the result of a bargain that he himself made'." (1341E) Lord Neuberger thereby rejected Mr. Sims' claim on the basis of A1P1. What about Article 8? Lord Neuberger noted that at first instance the judge had held that Dacorum BC had engaged in a "careful decision-making process amply accorded with article 8.1 [and] that the decision that the council made was one to which it could reasonably have come". So he did not find a breach of Article 8 either: "The fact that the service of the notice to quit put Mr Sims's right to stay in his home at risk does not mean that it therefore operated as an infringement of his right to respect for his home. No judgment of the Strasbourg court begins to justify such a proposition. Mrs Sims had the right to serve the notice, and, as already observed, the service of such a notice and its consequences were specifically covered by the agreement which gave Mr Sims the right to occupy the house as his home in the first place ... The fact that the service of the notice to quit put Mr Sims's right to stay in his home at risk does not mean that it therefore operated as an infringement of his right to respect for his home. No judgment of the Strasbourg court begins to justify such a proposition. Mrs Sims had the right to serve the notice, and, as already observed, the service of such a notice and its consequences were specifically covered by the agreement which gave Mr Sims the right to occupy the house as his home in the first place: see clauses 100 and 101. 23 I accept that the effect of the service of the notice to quit was to put at risk Mr Sims's enjoyment of his home. I also accept that different considerations may very well apply for article 8 purposes to Mr Sims, who is at risk of losing what has been his family home for many years, from those considerations that apply to temporarily housed homeless people who are at risk of losing their temporary accommodation as in R (N) v Lewisham London Borough Council. However, I do not consider that that undermines the point that full respect for Mr Sims's article 8 rights was accorded by the facts that (i) his tenancy was determined in accordance with its contractual terms to which he had agreed in clause 100 of the tenancy agreement, (ii) he was entitled to the benefit of clause 101 of his tenancy agreement, (iii) under the Protection from Eviction Act 1977, he could not be evicted without a court order, and (iv) the court would have to be satisfied that Dacorum was entitled to evict him as a matter of domestic law, and (v) the court could not make such an order without permitting him to raise a claim that it would be disproportionate to evict him." (paras 22-23). So, there was no breach here of either A1P1 or Article 8, the rule in Hammersmith v Monk stands. It took some time for a court to consider Article 8 definitively. This happened in McDonald, which reached the Supreme Court in 2016 McDonald v McDonald [2016] UKSC 28 Art. 8 and A1P1 The landlords here were Mr and Mrs McDonald, and the tenant was their daughter, Fiona, who held under an assured shorthold tenancy. She suffered from a severe form of mental disorder, that disorder being of such gravity that the psychiatric evidence was that forcing her to move home, even were it possible to find accommodation for her, would probably require her admission to hospital and could also lead to self-harm and the risk of suicide. The house had been acquired on a buy-to-let basis, the object of the exercise being to provide a home for Fiona. The purchase price was provided by a company, CHL. The plan was to repay the loan through housing benefit payable to Fiona. This plan did not work and arrears accrued. CHL appointed a receiver who, as they were entitled to do, terminated the tenancy. The consequence of this was that there now existed a mandatory ground for possession in favour of the parents who, although the litigation was instigated by the receiver, were, technically, the claimants in the case. The most important issue to be raised was for our purposes was whether art. 8 had a direct effect on private landowners. The Supreme Court summarised the starting point for the law on Article 8 and housing: "In the Pinnock case [2011] 2 AC 104, para 49, this court concluded that, in the light of the Strasbourg court's clear and constant jurisprudence: 'if our law is to be compatible with article 8, where a court is asked to make an order for possession of a person's home at the suit of a local authority, the court must have the power to assess the proportionality of making the order, and, in making that assessment, to resolve any relevant dispute of fact.' However, the Supreme Court [has made clear] ... that it would 'only be in "very highly exceptional cases" that it will be appropriate for the court to consider a proportionality argument' and that 'where . . . the local authority is entitled to possession as a matter of domestic law, there will be a very strong case for saying that making an order for possession G would be proportionate'." (para36) The difference here is that the landlord were not a public authority but were private individuals (in this case, the tenant's parents). Should courts be able to assess the proportionality of decisions made by private landlords? The Supreme Court held not. "It is unlawful for a public authority to act in a way which is incompatible with a Convention right": s. 6(1), HRA A court is a public authority: s. 6(3)(a) "[A] argues that, because 'a court' is specifically included within the expression 'public authority' by section 6(3)(a) of the 1998 Act, no judge can make an order for possession of a person's home without first considering whether it would be proportionate to do so, and, if so, what terms it would be proportionate to include in the order." So while Article 8 might be engaged, the Supreme Court did not think it could unsettle the balance of responsibilities implemented by Parliament through the range of legislation cited. As the barrister for the daughter accepted: "unlike in the case of a public sector landlord, a judge invited to make an order for possession against a residential occupier by a private sector landlord would, if the tenant's argument is correct, have to balance the landlord's A1P1 rights against the occupier's article 8 rights. Either party would have a potential claim against the United Kingdom in Strasbourg if the balance were struck in the wrong place." (para 39) "In the absence of any clear and authoritative guidance from the Strasbourg court to the contrary, we would take the view that, although it may well be that article 8 is engaged when a judge makes an order for possession of a tenant's home at the suit of a private sector landlord, it is not open to the tenant to contend that article 8 could justify a different order from that which is mandated by the contractual relationship between the parties, at least where, as here, there are legislative provisions which the democratically elected legislature has decided properly balance the competing interests of private sector landlords and residential tenants. In effect the provisions of the Protection from Eviction Act 1977, section 89 of the Housing Act 1980 and Chapters I and IV of the 1988 Act, as amended from time to time, reflect the state's assessment of where to strike the balance between the article 8 rights of residential tenants and the A1P1 rights of private sector landlords when their tenancy contract has ended." (para 40) Confirms cannot have art. 8 rights against private landlord The Supreme Court gave six reasons why they have concluded that Article 8 should not bind private sector landlords: 1. Para 41: Because this would effectively make the Convention directly enforceable as between private citizens so as to alter their contractual rights and obligations, whereas the purpose of the Convention is to protect citizens from having their rights infringed by the state. To hold otherwise would also mean that the Convention could be invoked to interfere with the A1P1 rights of the landlord, and in a way which was unpredictable. Indeed, if article 8 permitted the court to postpone the execution of an order for possession for a significant period, it could well result in financial loss without compensation for instance if the landlord wished, or even needed, to sell the property with vacant possession (which notoriously commands a higher price than if the property is occupied). 2. Para 42: The contrary view would also mean that article 8 could only be invoked in cases where a private sector landowner, or other private sector entity entitled to possession in domestic law, was either required by law, or voluntarily chose, to enforce its rights through the court, as opposed to taking the law into its own hands eg by changing the locks when the residential occupier was absent... 3. Para 43: More broadly, it would be unsatisfactory if a domestic legislature could not impose a general set of rules protecting residential tenants in the private sector without thereby forcing the state to accept a super-added requirement of addressing the issue of proportionality in each case where possession is sought. In the field of proprietary rights between parties neither of whom is a public authority, the state should be allowed to lay down rules which are of general application, with a view to ensuring consistency of application and certainty of outcome. Those are two essential ingredients of the rule of law, and accepting the tenant's argument in this case would involve diluting those rules in relation to possession actions in the private rented sector. 4. Para 44: It is, of course, true that a court, which is a public authority for the purposes of the 1998 Act (and is regarded as part of the state by the Strasbourg court), actually makes the order for possession which deprives the tenant of his home and indeed puts an end to the AST. However, as Lord Millett explained in Harrow London Borough Council v Qazi [2004] 1 AC 983, para 108, the court is "merely the forum for the determination of the civil right in dispute between the parties" and "once it concludes that the landlord is entitled to an order for possession, there is nothing further to investigate" 5. Para 45: This conclusion does not mean that a tenant could not contend that the provisions of the 1988 Act did not, for some reason, properly protect the article 8 rights of assured shorthold tenants: that would involve arguing that the legislature had not carried out its obligations under the Convention. However, quite rightly, no such argument was advanced on behalf of the tenant in this case. 6. Para 46: Of course, there are many cases where the court can be required to balance conflicting Convention rights of two parties, e g where a person is seeking to rely on her article 8 rights to restrain a newspaper from publishing an article which breaches her privacy, and where the newspaper relies on article 10. But such disputes arise not from contractual arrangements made between two private parties, but from tortious or quasi-tortious relationships, where the legislature has expressly, impliedly or through inaction, left it to the courts to carry out the balancing exercise. It is in sharp contrast to the present type of case where the parties are in a contractual relationship in respect of which the legislature has prescribed how their respective Convention rights are to be respected. The Supreme Court find no contrary authority in the Strasbourg jurisprudence (para 59): "In these circumstances, while we accept that the Strasbourg court jurisprudence relied on by the tenant does provide some support for the notion that article 8 was engaged when Judge Corrie was asked to make an order for possession against her, there is no support for the proposition that the judge could be required to consider the proportionality of the order which he would have made under the provisions of the 1980 and 1988 Acts." Even though it was obiter, the SC considered the proportionality point and considered that in an equivalent set of facts against a public-sector landlord, the best the daughter might have obtained was an order for possession in six weeks time (para 75). Watts v Stewart [2016] EWCA Civ 1247 - need exclusive possession for a tenancy Cannot have exclusive possession if an object of charity Barristers for Mrs Watts had conceded that the charity was not a public authority for the purposes of the Human Rights Act (HRA) 1998. Question was whether the dispute engaged Article 8 and also, Article 14 on discrimination "The enjoyment of the rights and freedoms set forth in this European Convention on Human Rights shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status." Sir Terence Etherton MR: "Mr Wonnacott's starting point on this issue was that Lord Templeman ... in Street v Mountford [1985] 1 AC 809 was correct when he said (at page 818E) that there can be no tenancy unless the occupier enjoys exclusive possession, but he was plainly wrong when he said: "an occupier who enjoys exclusive possession is not necessarily a tenant. He may be ... an object of charity" (para 28) Sir Terence Etherton MR (in the Court of Appeal) reviews MacDonald and then says at para 75: "The question as to when Article 8 is engaged therefore remains unclear on the authorities. However, for the purposes of the present case we are prepared to proceed on the assumption that its facts do fall within the ambit of Article 8 for the purposes of engaging Article 14." Nevertheless, Sir Terence Etherton finds no breach in any case: "the denial of security of tenure to almspersons is clearly justifiable as a proportionate measure which secures a fair balance between the interests of charities and current and future almspersons." So even if Article 8 and 14 were engaged (which Sir Terence Etherton does not decide on), the decision to evict Mrs. Watts would not have ben a disproportionate one and so would be compliant with convention rights in any case. Difference between "exclusive possession" and "exclusive occupation" Sir Terence Etherton: "... there is a distinction between legal exclusive possession or a legal right of exclusive possession, on the one hand, and a personal right of exclusive occupation, on the other hand ... Legal exclusive possession entitles the occupier to exclude all others, including the legal owner, from the property. Exclusive occupation may, or may not, amount to legal possession. If it does, the occupier is a tenant. If it does not, the occupier is not a tenant and occupies in some different capacity.... the terms on which Mrs Watts was permitted to occupy the property excluded the grant of legal possession. There is simply no scope in those circumstances to infer the grant of a tenancy at will." (paras 31 and 45) "Mr Wonnacott's attack on that part of the speech of Lord Templeman is bold, not least because he was unable to refer us to any authority or scholarly commentary in support of his criticism." (para 30) Rejects the authority cited by Mark Wonnacott of Earl of Pomfret case in1752. There was no tenancy at will. Proportionality and fair balance tests FJM v UK (2018) Application no. 76202/16 In November 2018, the European Court of Human Rights dismissed Ms McDonald's claim for a breach of Article 8 - art. 8might be engaged but no right to be enforced against landlord. The court concluded that the rules on ending assured shorthold tenancies were proportionate: [43] "As the Supreme Court made clear, a tenant entering into an assured shorthold tenancy agrees to the terms - clearly set out in the 1988 Act - under which it could be brought to an end and if, once it comes to an end, he or she could require a court to conduct a proportionality assessment before making a possession order, the resulting impact on the private rental sector would be wholly unpredictable and potentially very damaging. 44. Furthermore, the Court notes that the domestic legislation has, in fact, made provision for cases where exceptional hardship would be caused by requiring possession to be given up within fourteen days of the making of an order; in such cases, the courts may postpone the giving up of possession for up to six weeks after the making of the order (see paragraph 24 above; see also the findings of the Supreme Court, set out at paragraph 20 above). 45 ...while the applicant's particular circumstances are undoubtedly deserving of sympathy, having regard to the considerations set out above they cannot justify the conclusion that in cases where a private sector landlord seeks possession, a residential tenant should be entitled to require the court to consider the proportionality of the possession order. 46. In light of the foregoing, the Court considers that the authorities of the respondent State were entitled to regulate tenancies such as the applicant's assured shorthold tenancy through legislation intended to balance the Convention rights of the individuals concerned. Moreover, the applicant does not challenge the Convention compliance of that legislation as such. Her Article 8 complaint must therefore be rejected as manifestly ill-founded pursuant to Article 35 § 3 (a) of the Convention." McDonald (2016) in the Supreme Court and FJM v UK (2018) in the ECHR confirm that, at least for now, tenants with private sector landlords, cannot raise their Article 8 rights in disputes about home or property.

Property or contract?

Lease is an estate and contract One of the recurring themes in the law of leases - around since feudal times as Mark Wonnacott's history shows - is the extent to which a lease is real or personal property, or to re-phrase it an estate in land or a contract. One way to think about this is to consider how often judges talk about "constructing" the contract when deciding cases on leases. This is particularly noticeable in Street v Mountford and more recently in Khoo. For example Lord Templeman in Street v Mountford: "Although the Rent Acts must not be allowed to alter or influence the construction of an agreement, the court should, in my opinion, be astute to detect and frustrate sham devices and artificial transactions whose only object is to disguise the grant of a tenancy and to evade the Rent Acts". Also: "826F - 827E "My Lords, the only intention which is relevant is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent. Sometimes it may be difficult to discover whether, on the true construction of an agreement, exclusive possession is conferred. Sometimes it may appear from the surrounding circumstances that there was no intention to create legal relationships. Sometimes it may appear from the surrounding circumstances that the right to exclusive possession is referable to a legal relationship other than a tenancy. Legal relationships to which the grant of exclusive possession might be referable and which would or might negative the grant of an estate or interest in the land include occupancy under a contract for the sale of the land, occupancy pursuant to a contract of employment or occupancy referable to the holding of an office. But where as in the present case the only circumstances are that residential accommodation is offered and accepted with exclusive possession for a term at a rent, the result is a tenancy." And Butcher J. in Khoo: [18] "(2) In the process of construction, the court will consider the words used in the document in its context by reference to its subject-matter and in light of other relevant circumstances known, or which may be presumed to be known, to both parties at the time of the conclusion of the agreement, other than prior negotiations as to the terms of the agreement. In this respect, the process of construction of such agreements is not different from that of other contracts and the proper approach is that which has been considered by the Supreme Court in inter alia Arnold v Britton [2015] UKSC 36; [2015] AC 1619 and Wood v Capita Insurance Services Limited [2017] UKSC 24. (3) In this exercise of construction, there is no requirement that, before considering the context and background circumstances in which the agreement was entered into, there should be a finding of ambiguity in the words used in the agreement. On the other hand, it is normally safe to assume that the parties intended to give the words they chose their natural meaning and that the clearer the natural meaning of the words used, the less willing the court will be to depart from it. The court will not, however, be bound by the label which the parties have attached to their agreement." Construction of leases as constracts will always be part of their analysis, particularly around tricky questions of intention re term or exclusive possession. But leases are also estates ie. different from contracts, so the analysis is often trying to balance the two. It can be both, but if the two legal systems conflict, which should win? This was the question before the courts in two cases concerning local authority social housing provision (which is an incredibly rare resource). Hammersmith v Monk [1992] 1 AC 478 The appellant and a Mrs Powell were granted a joint secure tenancy by the respondents of a flat where they co-habited. The tenancy was terminable by four weeks' notice to expire on a Monday. In 1988, the appellant and Mrs Powell fell out and Mrs Powell left the flat. The respondents agreed to re-house her if she would terminate the tenancy of the flat by notice to quit, which she did. The notice was given without the appellant's knowledge or consent. Hammersmith sought possession of the flat. Mr. Monk and Mrs Powell were granted a joint secure tenancy by Hammersmith LBC of a flat where they lived together (co-habited). The tenancy was terminable by four weeks' notice to expire on a Monday. In 1988, the appellant and Mrs Powell fell out and Mrs Powell left the flat. Hammersmith LBC agreed to re-house her if she would terminate the tenancy of the flat by notice to quit, which she did. The notice was given without the Mr. Monk's knowledge or consent (so his leasehold estate in land was ended without his consent). Hammersmith LBC sought possession of the flat (and to evict Mr. Monk). Could the lease be ended in this way, solely by Mrs. Powell saying she no longer wanted to be bound by it? What about Mr. Monk's property rights? Hammersmith v Monk suggests that a person's property rights (in this case the leasehold estate) can be ended by someone else (the joint tenant)'s decision to end the tenancy, and no longer be bound by the contract. "There are two instinctive reactions to this case which lead to diametrically opposite conclusions. The first is that the flat in question was the joint home of Mr. Monk and Mrs. Powell: it therefore cannot be right that one of them unilaterally can join the landlords to put an end to the other's rights in the home. The second is that Mr. Monk and Mrs. Powell undertook joint liabilities as tenants for the purpose of providing themselves with a joint home and that, once the desire to live together has ended, it is impossible to require that the one who quits the home should continue indefinitely to be liable for the discharge of the obligations' of the other." (Lord, Browne-Wilkinson 491F) These two instinctive reactions are mirrored in the legal analysis of the position... The revulsion against Mrs. Powell being able unilaterally to terminate Mr. Monk's rights in his home is property based: Mr. Monk's property rights in the home cannot be destroyed without his consent. The other reaction is contract based: Mrs. Powell cannot be held to a tenancy contract which is dependent for its continuance on the will of the tenant. Lord Browne Wilkinson agreed with Lord Bridge who had concluded that "unless the terms of the tenancy agreement otherwise provide, notice to quit given by one joint tenant without the concurrence of any other joint tenant is effective to determine a periodic tenancy" (at 491A). So, if property and contract conflict in this way, principles of contract carry the day according to Hammersmith v Monk. Rights in Personam: A personal right (a right in personam) is a right in or against a person. It is usually only enforceable against one other person, against whom the right originally arose. E.g. a contract to buy a cup of coffee where the parties can demand performance, but others cannot be affected by the obligation (privity of contract). Rights in Rem: A property right (a right in rem, a right in or against a thing) creates more extensive rights. Rights in rem can and do affect third parties (and explains "the durability of property rights"). Property rights can be enforceable against third parties. Equally, in theory, everyone has an obligation not to interfere with another's property rights without their consent. Miss X and Mr Y and sign a tenancy agreement with their local housing association to rent a three bedroom flat for themselves and their children. After 3 years, Miss X leaves with the children because Mr Y is subjecting her to domestic violence. Miss X and the children are rehoused after they serve an notice to quit (NTQ) to the housing authority. Does Mr Y have an basis on which to challenge the end of his lease?

Property guardians

Property Guardians - the lease/licence distinction today They get somewhere cheap to live and you get security/building gets protected Although the Rent Act 1977 is long gone (repealed by Thatcher's housing legislation in the 1980s), there are still differences today between residents with leases and people with licences. These differences are set out in some detail in the White Paper on Property Guardians uploaded into Readings on Blackboard but it is not part of the syllabus. Very broadly, there are four broad differences: (1) Statutes generally only protect tenants e.g. security of tenure under s21 Housing Act 1988. (2) Licences can be determined by reasonable notice, subject to the contract between the parties, if any, and statute. Often this will be "at will". Tenancies, on the other hand, require certain periods of notice and have technical rules as to their determination. (3) Licences are purely personal rights that do not bind third parties; tenancies are property rights that do. (4) Generally, licensees are not entitled to sue for tortious acts to the land other than through the estate owner. Tenants are entitled to sue in their own right. Property Guardians Property guardians illustrate that the distinctions between leases and licences today are alive again today. Property guardians are people who live in buildings that are not necessarily adapted for residential occupation (old schools, offices and even fire stations, for example). They usually pay less rent but their paperwork gives them a licence, rather than a tenancy. There are estimated to be around 5,000 property guardians in the UK, including some in Bristol, which is where the litigation has also happened. Camelot v Greg Roynon County Court at Bristol, 24 February 2017. Greg Roynan moved into a former old people's home owned by Bristol City Council in 2014. In 2016 he was served a notice to quit the licence by Camelot. The question for the court was whether he was a tenant or a licensee. As the decision is a county court decision, it is not an authority which is binding on any other court, however it is a useful, modern analysis of the lease/licence distinction and shows that the law is as uncertain today as it has been for some time. Mr Roynon had been offered and accepted specific rooms by Camelot in accommodation that had formerly been used by the local authority as a residential care home for the elderly. He had keys to those rooms and could lock them but it was Camelot who controlled assignment of rooms, not the Guardian occupiers, although the agreement did not contain a power for Camelot to move Mr Roynon. Matthews HHJ held that the absence of an express reserved right to enter for inspection or repair was not fatal to the agreement being a tenancy (even though only tenants - not licensees - have rights of repair). The judge noted the extent of the restrictions on Mr. Roynan in his rooms and the property as a whole (including no smoking, having no more than two guests at a time and escorting guests from the premises (all in clause 10). However, he held that these restrictions were not incompatible with a finding of exclusive possession. "A landlord's control of premises can be a factor in determining whether an occupier has exclusive possession or not. For example, where a landlord reserves the right to move occupiers from room to room as occasion demands, then that would generally indicate that the occupier does not have exclusive possession in his room, even though he may have the exclusive use of whichever room he is occupying for the time being. However, that is not the case here. Clause 10 does not enable Camelot to move a Guardian from room to room, nor does it require a Guardian to allow certain classes of people into his room. - distinction from Westminster v Clarke Instead, Clause 10 places restrictions upon the way in which a Guardian can use his room. This is a common feature of tenancies and is not incompatible with exclusive possession. For example, it would be unremarkable if a tenancy agreement contained a restriction that prevented an occupier from keeping a pet in his room. Such a restriction would not be incompatible with exclusive possession. In the same way (and by way of example) Clause 10.7 contains a restriction that prevents an occupier from having more than two guests in his room at a time. This may be an onerous restriction, but it is not incompatible with exclusive possession" (paras 40-41)." The judge also held that Camelot's monthly inspections of the rooms did not remove exclusive possession: "the fact of a landlord exercising limited rights of entry for the purposes of inspect/ viewing/repairing the premises, is not incompatible with exclusive possession" (para 43). Matthews HHJ found that Mr Roynan had exclusive possession of his rooms, that the term was monthly and that Mr. Roynan had an assured shorthold tenancy. Camelot v Khoo (2018): Finds the other way to Roynan case - finds Khoo does not have a tenancy This was another dispute between Camelot and a property guardian (Mr. Khoo) who lived in office space owned by Westminster City Council. After a while, Westminster wanted to redevelop the property and Camelot issued Mr. Khoo with a notice for possession. Challenging this notice, Mr. Khoo brought his action. This was an appeal to the high court from a decision by Mr Recorder Cohen QC in May 2018 (Butcher J. heard the dispute in July 2018). Butcher J. summarised the law as follows: "(1) If an agreement confers exclusive possession of residential premises for a fixed or periodic term certain in consideration of a premium or periodical payments, then, subject to what follows, there is a tenancy (Street v Mountford [1985] 1 AC 809 at 818E-F and 827A-B per Lord Templeman). (2) There are exceptional cases in which, even though there has been a grant of legal exclusive possession, the circumstances show that that right is referable to a legal relationship other than a tenancy (Street v Mountford at 821A-C and 827A-B) and it was common ground before me that the categories of such exceptional cases are not closed." however ... the process of construction is not confined to considering the words of the Agreement in isolation but can and should take into account the background and other circumstances existing at the time of the conclusion of the Agreement which must be taken to be known to both parties." [24-25] He found that there was no exclusive possession and so no tenancy. It's worth noting that one of the selling points for Property Guardian companies is that the owners of empty buildings will have their premises protected by people living there and as they are residential, the buildings will not be liable for business rates (which they would be after a while, even if they are empty). If there is no tenancy, and the occupation is not residential, then landowners will be liable for business rates on their property. See this note & summary by Giles Peaker at Nearly Legal: https://nearlylegal.co.uk/2018/10/property-guardians-licence-not-tenancy-in-office- building/?highlight=%22property%20guardian%22 NOTE also "accommodation clubs" by Giles Peaker at Nearly Legal: https://nearlylegal.co.uk/ 2018/05/on-the-naughty-step-accommodation-clubs/?highlight=%22property%20guardian%22 The decision in Khoo is the more authoritative of these two cases but as the judgment illustrates, it really does depend both on the wording of the contracts (which will often be templates) and the circumstances (or factual matrix? - background facts) of the living arrangement. If licensee rather than a tenant then do not get the same level of protection Derek Whayman (2019): Whayman argues that it would be better to think of property guardian contracts as forms of employment: "If the courts do think that reduced protection for guardians is justifiable, the better route is that of the service occupancy cases. A licence is granted irrespective of exclusive possession if the occupation is required by and is of material assistance in carrying out the occupier's employment duties. Both the test and its driver look to true nature of the relationship between landlord and occupier—status—rather than the terms, which can be gamed. By this route the courts could hold that if one has exclusive possession of one's room but not of the common parts, no tenancy is created. If contract does not work, we must revert to status. At least the doctrinal and practical benefits would accrue.

Registration

Registration (registration not examinable in exam other than conceptually in WIP) Legal leases of over seven years are registrable dispositions (s27(2)(b) LRA 2002). If legal leases of over seven years are not registered, they cannot take effect "at law" (and so must take effect in equity) (s27(1) LRA 2002). Leases of less than three years are excluded interests under section 33(ii)(b) LRA 2002. This means that you can enter a notice (ss32 and 34 LRA 2002) for leases between three years and one day and seven years (when leases become registrable dispositions, s27(2)(b) LRA 2002 above). As legal leases of seven years would be overriding (see below) this would be "belt and braces" for legal leases. Entering a notice under s32 & 34 LRA 2002 is, however, a good way to protect equitable leases. Equitable leases might be protected under Schedule 3, para 2 if they are an interest at the time of disposition belonging to a person in actual occupation and the rest of the conditions are met. This will depend on a case-by-case analysis and would be risky to rely upon. Legal leases under seven years are interests that override (Schedule 3, para 1, "a leasehold estate in land") which override registered dispositions. The reasons for this overriding interest are practical. If all short leases (ie less than seven years) needed to be registered at the Land Registry it would create a huge amount of work. On the other hand, fairness suggests that people occupying (particularly residentially) on short leases should be protected in their home. For example, if a purchaser were to buy the house you are living in from your landlord, your lease would bind this new purchaser (the third party) if it is a legal lease because it is an interest that overrides (Sched 3, para 1). You could then live in the house until the end of the lease. NOTE Note - these are not part of the syllabus if you read about them in a textbook: - Leasehold covenants (e.g. covenant of quiet enjoyment or of repair) - Rent Reviews - Service Charges - Frustration of Leases - Commonhold S. 27 - start of PQ on leases 27 Dispositions required to be registered (Registrable Dispositions) (1) If a disposition of a registered estate or registered charge is required to be completed by registration, it does not operate at law until the relevant registration requirements are met. (2) In the case of a registered estate, the following are the dispositions which are required to be completed by registration— (a) a transfer, (b) where the registered estate is an estate in land, the grant of a term of years absolute— (i) for a term of more than seven years from the date of the grant ... (d) the express grant or reservation of an interest of a kind falling within section 1(2)(a) (easement) (f) the grant of a legal charge. S. 27-30 registrable dispositions - things you do to registered land - four things need to be registered (a, b, c, d above) - in order for lease to be binding must register it otherwise ony equitable not legal A legal lease of seven years or more must be registered (s27(2)(b) LRA 2002. If it is registered, the lease will have priority in accordance with section 29 LRA 2002. If a legal lease of more than seven years is not registered in accordance with s27(2)(b), it cannot operate at law, ie. it operates in equity (s27(1) LRA 2002). Fred grants Barney a legal lease (with all the formalities completed) for 8 years of the Flintcave in November 2019. Nothing else happens. In January 2020 Fred sells the Flintcave to Auntie Win. Is Auntie Win bound by Barney's lease? It is not a legal lease as it has not been registered at the time of disposition, it can only take effect in equity. Legal lease less than seven years: A legal lease of less than seven years can't be registered with its own title as it's not a registrable disposition (s27(2)(b) LRA 2002) Can it be protected by entering a notice? Only, if it is more for than three years. S. 33(b)(i) 33 Excluded interests No notice may be entered in the register in respect of any of the following— (a) an interest under— (i) a trust of land, or ... (b) a leasehold estate in land which— (i) is granted for a term of years of three years or less from the date of the grant, and (ii) is not required to be registered, Notices & Restrictions Sections 32, 33, 34 & 40 Fred grants Barney a legal lease (with all the formalities completed) for 4 years of the Flintcave in November 2019. Barney knows that Fred is interested in selling the Flintcave to Auntie Win and asks you whether he can protect his lease. Yes, he can enter a notice under s32 & 34 LRA 2002 which will confer priority. Fred grants Barney a legal lease (with all the formalities completed) for 4 years of the Flintcave in November 2019. Barney knows that he can enter a notice under s32 & 34 LRA 2002 but asks you whether there is any other way that his lease might be protected? SCHEDULE 3 Unregistered interests which override registered dispositions 1 Leasehold estates in land A leasehold estate in land granted for a term not exceeding seven years from the date of the grant ... Interests that Override: Schedule 3 Fred grants Barney a legal lease (with all the formalities completed) for 4 years of the Flintcave in November 2019. Barney knows that he can enter a notice under s32 & 34 LRA 2002 but asks you whether there is any other way that his lease might be protected? As it is a legal lease of less than seven years, it will be an interest that overrides any sale to Auntie Win (her registrable disposition, even if she registers it) under Sched 3, para 1 LRA 2002. A legal lease over seven years is a "registrable disposition" and must be registered (with its own title number) if it is to take effect at law ie. stay legal and bind the world (ss27(2) & 29 LRA 2002). If a legal lease over seven years is not registered it cannot take effect at law ie. it must take effect in equity (s27(1) LRA 2002). If a legal lease is for less than seven years it is an interest that overrides (ie. binds third parties) Sched 3, para 1. Schd. 3 para 2 for equitable lease Fred grants Barney a legal lease (with all the formalities completed) for 8 years of the Flintcave in November 2019. Nothing else happens. In January 2020 Fred sells the Flintcave to Auntie Win. Is Auntie Win bound by Barney's lease? It is not a legal lease as it has not been registered at the time of disposition, it can only take effect in equity. What about Barney's equitable lease? An equitable lease is not a registrable disposition (s27(2)(b) LRA 2002). An equitable lease might be protected by a notice - if it is for more than three years (ss32-34). An equitable lease might be an overriding interest if the person is in "actual occupation" in accordance with Sched 3, para 2. Loading... SCHEDULE 3 Unregistered interests which override registered dispositions 2 Interests of persons in actual occupation An interest belonging at the time of the disposition to a person in actual occupation, so far as relating to land of which he is in actual occupation, except for— (b) an interest of a person of whom inquiry was made before the disposition and who failed to disclose the right when he could reasonably have been expected to do so; (c) an interest— (i) which belongs to a person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition, and (ii) of which the person to whom the disposition is made does not have actual knowledge at that time) ... Interests that Override Schedule 3 Fred grants Barney a legal lease (with all the formalities completed) for 8 years of the Flintcave in November 2019. Nothing else happens. In January 2020 Fred sells the Flintcave to Auntie Win. Is Auntie Win bound by Barney's (now equitable) lease? Yes, if Barney is in actual occupation, he has not said that he doesn't have a lease if he was asked (under Sched 3, para 2 (b)) and his occupation is obvious on a reasonably careful inspection of the land (under Sched 3, para 2(c) LRA 2002). Why are there all these rules about formalities and registration? Fairness (Sched 1 & 3) & practicality for the land registry (Sched 3, para 1

Rent

Rent - for formalities may need rent but for lease may not) (Yes) Street v Mountford [1985] 1 AC 809 - need rent to query - need rent (Lord Templeman) - intention (No) Ashburn Anstalt v Arnold [1989] Ch 1 (not overruled on this point by HL) - authority for proposition do not need rent for lease despite Lord Templeman's judgement No rent was paid when the parties entered into arrangement to re-develop the shop. The lease was to begin after the shop had been re-developed. In the Court of Appeal, Fox L.J. (at 9E) held that: "In Street v. Mountford [1985] A.C. 809 Lord Templeman, who gave the leading speech, regarded three hallmarks as decisive in favour of a tenancy of residential accommodation, namely exclusive possession, for a term, at a rent ... [Here] We treat the case as one where no rent was payable. Did that prevent ... a tenancy? We do not think so. We are unable to read Lord Templeman's speech in Street v. Mountford as laying down a principle of 'no rent, no lease'. It would be inconsistent with section 205(1) (xxvii) of the LPA 1925 and caselaw." So rent was not required in order for there to be a lease. Skipton BS v Clayton (1993) 25 H.L.R. 596 - cannot afford to run it - no rent paid was it a license or tenancy? - do not need rent for tenancy Here the freehold was transferred as part of a sale and rent back scheme. That is, the property was sold at an undervalue with the sellers (the former owners) agreeing to the deal in return for a licence for life. The new purchasers, however, mortgaged the property and failed to repay the mortgage. The bank - Skipton Building Society - brought an action to possess the house. In these circumstances, the CofA held this was a lease even though there was no rent. Sir Christopher Slade held that: "The decision of the House of Lords in Street v. Mountford ... clearly establishes that, whether the label which the parties choose to attach to their arrangement be a tenancy or a licence, an arrangement under which exclusive possession of residential property is granted for a term at a rent will normally be regarded by the law as the grant of a tenancy. Furthermore, as Lord Templeman recognised (at p. 818E), the same legal result will ensue if the occupier is granted exclusive possession for a fixed or periodic term certain in consideration of a premium." So, although Lord Templeman seemed to suggest that rent was an essential attribute of a valid lease, this is not necessarily so. Note, however, that when it comes to formalities (deciding whether a lease is legal or equitable), s 54(2) LPA 1925 makes it clear that "best rent" is required. Here the undervalue was held to constitute a "fine" (albeit for the purposes of s149(6) LPA 1925, although this decision is often read across to the parol rule in s54(2) LPA 1925. For all other leases, the most that can be said is that the payment of rent is an indicator of an agreement to enter into a legal relationship. The absence of a rental payment is an indicator that there was no intention to enter into legal relations.

Lease PQ

SEVEN CASES TO NOTE AND ANALYSE Wilma invites Barney and Betty to come and live in the Flint House with her and Fred (which they own) for four years, paying rent of £100 a week. Fred is worried that Betty might be a bad influence on Thelma and so imposes certain "rules" which are contained in the deed, including: -No poker nights in Barney and Betty's room; -Inspections for whatever reasons, whenever Fred feels like it; -Fred reserves the right to sleep on the sofa in Barney and Betty's room if he so chooses (though Wilma tells Barney and Betty she would not let this happen). After three months, Fred wants Barney and Betty to leave. Can he require them to go? This agreement has rent (£100 pw) and term (4 years) so if there is exclusive possession (of "first importance" according to Lord Templeman in Street) then it would appear to be a tenancy. The restriction on using the room for poker does not mean that Barney and Betty do not have exclusive possession, as HHJ Matthews held in Roynan, a restriction on use, e.g. not to have pets, does not negate exclusive possession. Roynan also built on Street to confirm that inspections are also compatible with exclusive possession. However, tenants should be able to live their lives and you need to assess the "degree of control" per Butcher J. in Khoo. Lord Donaldson MR in Aslan confirmed that if the landlord still retains keys, unless this is for "cleaning, daily bed-making, the provision of clean linen", this is not incompatible with exclusive possession. The right to sleep on the sofa is also likely to be a sham if it was indicated in advance that the landlord would not exercise this right (Wilma says that this will not happen), see Lord Templeman in Antoniades. The situation here is quite distinctive from Westminster v Clarke where the local authority had a statutory duty in relation to the property, there was a warden and residents could be moved from room to room. There is no information on the details of the agreement Betty and Barney are given but if they are the same document(s) and have the four unities (of time, interest, title and possession) then there will be a joint tenancy as the agreements will be inter-dependent, not independent as in AG Securities v Vaughan. Reserving the right to sleep on the sofa could, however, negative exclusive possession. This is not as clear cut as joining the couple in their double bed in Antoniades and it may depend on whether it has "an air of total unreality" about it per Lord Oliver, in Vaughan. If there is exclusive possession, then ..., if not, then ... keep options open

Types of lease

There are a few different types of lease, including (but not limited to): - Fixed term leases are leases for a fixed term. So, if your tenancy is for six or 12 months, that is the fixed term. According to the common law, it ends at the end of the fixed term. However, statute intervenes in the types of tenancies you have so that it can in fact run on. - Periodic tenancies are tenancies for a period which roll on at the end of the first term. So, for example, a weekly tenancy has a period of one week, but rolls on to further periods of one week, until either party determines it. Where a person goes into occupation of property and pays a weekly fee for it, the law usually implies the creation of a weekly tenancy that it takes from the rental period unless there is contrary evidence. A periodic tenancy ends on the giving of notice. The common law has particular rules for notice, but these aren't that relevant any more because statute requires that at least 28 days notice is given and for your types of tenancies, the landlord must usually have to give you at least two months under the housing act 1988. - Tenancies at will arise where a person occupies land for an indefinite period but where either party can end the tenancy on demand. It operates in a rather shadowy ground conferring limited rights on the tenant at will. In times gone by, a tenancy at will was a fairly common presumption from the entry onto land and the payment of rent. However, the courts, during the second half of the twentieth century began to restrict the doctrine of tenancies at will because, through this device, landlords were seeking to circumvent the statutory protections available to tenants. The only time we encounter a claim for a tenancy for life is in Watts v Stewart, where it was rejected by the CofA. - A lease for a life was a common term at one time but is inherently uncertain. Section 149(6) turns a lease for life into a lease for 90 years determinable on the death of the relevant person (as we will see when we come to Mexfield v Berrisford). Sub-Leases - A lease can be "carved out" of a freehold, as the freehold is longer than a lease (there is no time limit on a freehold estate). - A sub-lease can be "carved out" of a lease as long and the sub-lease is shorter than the lease. For example: Freeehold ------------------------------------------------------------------------------------ Leasehold (for 99 years) --------------------------------------------------------- Sub-lease (for 98 years and 364 days) ----------------------------------------- Sub-lease (for 98 years and 363 days) ----------------------------------------- (and so on) - If formalities are complied with, the freehold, lease and any further sub-leases would all be estates for the purposes of s1(1)(b) LPA 1925. Why would you want to create a sub-lease? - So that you can earn rent even when you are not in occupation. For Example: A student has a room in a rented house. The lease (tenancy) is from 1.10.18 until 30.9.19. The house is owned by the landlord. The landlord is the freeholder, the student is the leaseholder (also known as the lessee or tenant). At the end of the lease (30.9.19) the property reverts to the freeholder (the landlord). He maintains an interest in reversion throughout. If the student decides to go to Camp America from 30th June - 31st Aug 2019, if his contract does not prohibit him, he can sub-let his room while he is away. The person who sublets it is a sub-lessee. - Land law, which is primarily concerned with estates and interests, permits sub-leases. As leases are both contracts and property, however, the terms of a lease may prohibit sub-letting. For example, the UoB Student Residence Contract says that "You are not to sublet the Accommodation nor allow anyone else to use it for residential purposes." - So if you are renting from UoB you may not sub-let your room, even if you are away for a period of time. In land law, a tenant may carve out a sub-lease of their tenancy - that is a basic land law rule - but this carving out or sub-letting may be prohibited by contract, as here by the "student residence contract". Leases are both estates in land and contracts (see below section 9, for what happens when the two sets of rules come into conflict). N.B. How does a lease end? - Effluxion of time - Notice to Quit - Surrender - Forfeiture - Merger In this course, you need to know about effluxion of time (for fixed term tenancies) and notice to quit (for periodic tenancies). It is useful to understand the principle of forfeiture as it comes up in some of the cases (e.g. Mexfield). A lease will be forfeited if a tenant breaches a specified condition e.g. the obligation to pay rent. Leases and Licences - If the requirements are not met, a person may still be living in a place or a company may work from premises but there is no lease (because the requirements of rent, term and exclusive possession have not been met). The arrangements are then known as a licence ie. they grant personal permission but do not grant an estate in land (under s1 LPA 1925). Why does it matter if you have a lease rather than a licence? • The difference between having a lease and a licence has varied over time. It was particularly important between the 1977 Rent Act and the 1985 Housing Act where a tenant had security of tenure and rent protection (they became what is colloquially referred to as "secure tenants"). Today, there are still important differences including: - Tenants who have an assured shorthold tenancy will have at least six months security of tenure, must be given two months notice of eviction and the landlord must get an order for possession executed (Housing Act 1988, ss 7, 21) - Tenants have the right to get their landlords to repair the property (Landlord and Tenant Act, 1987, s11) - Tenants must have their deposits protected (Housing Act 2004, ss212-214) - A long discussion of the differences between leases and licences in relation to property guardians is contained in a White Paper on Property Guardians http://www.adhocproperty.co.uk/wp-content/uploads/2017/11/The-Law-on-Property-Guardians- White-Paper-November-2017-081117.pdf (and on BB). - The housing law details of the implications of whether you have a lease or a licence are not on the exam (as conventionally, this is taught as housing law rather than land law). What is on the exam is how you decide whether an arrangement is a tenancy or a licence. But the housing consequences of this are - for our teaching purposes - part of housing law, not land law. - A lease is in some ways a power dynamic - what can the landlord and the tenant negotiate? Student accommodation in particular has become very profitable for some developers (for example, see https://www.theguardian.com/education/2018/may/27/revealed-developers-cashing- in-privatisation-uk-student-housing). - There is a model tenancy issued by the Department of Communities and Local Government with a three-year term but it is very rarely used (https://www.gov.uk/government/publications/model-agreement-for-a-shorthold-assured-tenancy)

What is a lease

What is a lease? Nature of a Lease - A lease is said in s1(1)b LPA 1925 to be a legal estate, "a term of years absolute". - A "term of years absolute" is defined in s205 (xxvii) LPA 1925 as: "a term of years (taking effect either in possession or in reversion whether or not at a rent) with or without impeachment for waste, subject or not to another legal estate, and either certain or liable to determination by notice, re-entry, operation of law, or by a provision for cesser on redemption, or in any other event ..." - This statutory definition has been criticised. Gray and Gray, for example, describe it as being "circular in nature and provides little assistance in isolating the main structural elements of a lease or tenancy" (Gray & Gray, Elements, p. 315). The words lease and tenancy are interchangeable. - Leases developed in Europe during feudal times, often in relation to agricultural land. Adam Smith, the proponent of the "invisible hand" and free market capitalism highlighted their shortcomings in the Wealth of Nations (1776): "As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. The rent of the land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give" (Wealth of Nations, 1776, Book 1, Chapter 11). Leases as legal devices: - Historically, the lease was regarded as a chattel, which gave rise to an action in personam only. However, from about the thirteenth century onwards, the lease came to be regarded as an element of a person's property - falling within the doctrine of tenure. Today the relationship of landlord and tenant is the living embodiment of feudal tenure, which requires that "all land which is held for any estate shall be held of a lord". Thus, although in its earliest incarnation, the lease was regarded as creating simply a contractual relationship, it is today regarded as having a mix of contract and property law; that mix is sometimes rather awkward as Mark Wonnacott's illustrates in his book The History of the Law of Landlord and Tenant in England and Wales (2012), pp 1-2: "A leasehold tenancy is a curious mix. One part a personal promise, enforceable against the parties, and the other part an estate in land, enforceable against the world; the tension is inherent in the medieval term for it, a 'chattel real'." - Today - since the 1925 LPA - leaseholds are estates (real property). Most students know what a lease is in their every day life, as they rent a room or a flat from a landlord, perhaps a private individual or a company (e.g. Unite). The landlord is the freeholder, the person renting (the student, in this example) is the lessee (or tenant, the words are interchangeable). - While a freehold has no time limit ("a grant of years absolute", s1(1)(b) LPA 1925)), a lease is limited by time. Sometimes the lease is explicitly time limited, e.g. assured shorthold tenancies conventionally last for 12 months. A lease has no upper time limit (leases for 999 years are not uncommon). - Leases can also be periodic, ie the rent is paid at regular periods, for example weekly or monthly. The words periodic leases and periodic tenancies are again interchangeable, though people generally say "periodic tenancy". - The person who grants the lease is referred to as the lessor or the landlord. The landlord carves the leasehold estate out of his freehold interest, which he retains. The landlord's interest is called "the reversion", he holds the "reversionary estate" from which the lease has been carved out. This reversionary interest can be "assigned" to somebody else. - If there is an arrangement between someone who is a bit like a landlord and a bit like a tenant but the criteria for a lease are not met (rent, term, exclusive possession as well as the intention to create those legal relations) there will not be a lease. Then the person will still be living there as a lodger but they will only have a licence. They are not a tenant and they do not have a leasehold estate. They are a licensee (ie. they have a licence). - The main reason the lease/licence distinction matters is because if someone has a lease they have an estate and can stay until the end of the leasehold estate's term (if this is a periodic tenancy e.g. weekly, then the requisite period of notice must be given). If someone has a licence they can be asked to leave "at will", if they do not leave they will be a trespasser. - The landlord, as the person in receipt of rents and profits, is legally regarded as being in possession, since "possession" is defined in s205xix LPA as including "receipt of rents and profits or the right to receive the same, if any; and "income" includes rents and profits". - However, physically the landlord does not have the right to possess the property, the tenant has the right to "exclusive possession". This question of exclusive possession is in practice crucial to knowing whether an arrangement is a lease or a licence. - This means that in a student context the landlord is in possession as they have the right to receive income ie. rents and receipts. However, the student has exclusive possession.

Lease formalities

land can have multiple interests in it documentary requirements Legal leases must be created by deed (s52 LPA 1925, the requirements for a deed are set out in s1(2) and (3) LP(MP)A 1989). There is an exception for parol leases: LPA 1925, section 54(2): "Nothing in the foregoing provisions of this Part of this Act shall affect the creation by parol of leases taking effect in possession for a term not exceeding three years (whether or not the lessee is given power to extend the term) at the best rent which can be reasonably obtained without taking a fine." Leases that do not exceed three years, are for best rent and take effect in possession (ie. the tenant moves in straight away) are an exception to the general rule in s52 LPA 1925. Whether made orally or in writing arrangements that comply with the parol rule create a legal leasehold estate. Leases in equity - contract for a lease If the lease does not fall within the parol rule (s54(2) LPA) exception, it needs to be in writing in order to be equitable (s 53 LPA 1925 and s2 LP(MP)A 1989). If compliant with s2 LP(MP)A 1989, there is authority that a contract for a lease (written down) is "as good as a lease" (Walsh v Lonsdale 1882). So, as between the landlord and tenant there is a valid lease because, in equity, a court would award specific performance of the contract for a lease (and so it is "as good as a lease"). In Walsh v Lonsdale (1882 21 Ch D 9), Mr Lonsdale agreed to lease Mr Walsh a mill for seven years. Rent varied with the number of looms being operated, but there was a minimum dead rent paid yearly in advance on demand. There was no deed (and the then version of the parol rule did not apply) yet Mr Walsh moved in and began paying rent quarterly. Mr Lonsdale demanded payment in advance and levied distress for non-payment of rent. The Court of Appeal held that it would regard that as done which ought to be done. Lord Jessel MR held that: "There is only one court, and the equity rules prevail in it. [This was soon after the Judicature Acts, 1873-1875]. The tenant holds, therefore, under the same terms in equity as if a lease had been granted, it being a case in which both parties admit that relief is capable of being given by specific performance (equitable remedy). That being so, he cannot complain of the exercise by the landlord of the same rights as the landlord would have had if a lease had been granted. On the other hand, he is protected in the same way as if a lease had been granted; he cannot be turned out by six months' notice as a tenant from year to year." The conclusion from Walsh v Lonsdale that an "equitable lease is as good as a lease" means that if there is an enforceable contract for a lease, then equity can grant specific performance for contracts in land (but this is always discretionary). The maxim "equity regards as done that which ought to be done" applies, so the contract, with its terms, takes effect as an equitable lease. While an equitable lease is created, it is not quite true that an "equitable lease is as good as a lease" as an equitable lease may not bind third parties, the remedy is ostensibly discretionary, covenants will not run (not on the syllabus) and as it is a contract, rather than a conveyance, s62 LPA 1925 will not include easements (considered in topic 8). However, for our purposes, we can say that an equitable lease arises and then assess the implications for third parties in registration. Note: not quite "as good as a lease" because is a discretionary remedy + different effects on third parties. Why does it matter if a lease is legal or equitable? Affects whether it binds third parties (registration) Does an equitable lease bind a third party? There are consequences if formalities are not complied with and the tenant has an equitable interest rather than a legal lease. An equitable lease (shorthand for an equitable interest or a contract for a lease) would not necessarily be binding on a third party. (Remember a legal (registered) estate or interest binds the world, an equitable one may do). For example, in this context, if the landlord sells the property to somebody else in registered land unless the equitable leases has been protected by entering a notice (ss32 and 34 LPA 1925) or the tenant is in actual occupation and the lease becomes an overriding interest (Sched 3, para 2 LPA 1925) (see lecture notes 1-3) the lease will not be binding on the new purchaser (the third party). These points are set out again in Section 12 of these notes, Registration. Licenses: - usually "terminable at will", sometimes terminable in accordance with the contract. - licenses is much less protective than a lease It is crucial that you understand (for the purposes of problem questions) that there are two ways in which you can have a licence. (1) If formalities are not complied with ie. there is no deed (for the purposes of s52 LPA 1925, S1(2) & (3) LP(MP)A 1989), no parol lease (s54(2) LPA 1925), no interest conveyed by contract (s53 LPA 1925, s2 LP(MP)A 1989) the person living in the property will not have a legal lease (either by deed or under the parol rule), nor an equitable lease (a contract for a lease) and so they will only have a licence, which is terminable at will, or (2) If the requirements for term, rent and exclusive possession are not met, there will not be a lease and the person living in the property will only have a licence. A person can have a licence in either of these ways. If there is a licence in a PQ scenario that will either end the question (as the licensee can be asked to leave "at will") or if there is an apparent sub-letting then Bruton will come into play (discussed at Section 9 of these notes). If Bruton applies - or might apply - then the analysis should continue. Why does it matter if you have a lease or a licence? - Tenants who have an assured shorthold tenancy will have at least six months security of tenure, must be given two months notice of eviction and the landlord must get an order for possession executed (Housing Act 1988, ss 7, 21) - Tenants have the right to get their landlords to repair the property (Landlord and Tenant Act, 1987, s11) - Tenants must have their deposits protected (Housing Act 2004, ss212-214)

Intentions shams and pretences

landlords trying to exploit loopholes Intention Street v Mountford Lord Templeman in Street v Mountford: "Although the Rent Acts must not be allowed to alter or influence the construction of an agreement, the court should, in my opinion, be astute to detect and frustrate sham devices and artificial transactions whose only object is to disguise the grant of a tenancy and to evade the Rent Acts". In Antoniades, Lord Templeman said of his judgment in Street: "It would have been more accurate and less liable to give rise to misunderstandings if I had substituted the word "pretence" for the references to "sham devices" and "artificial transactions" ... The facts must prevail over the language in order that the parties may not contract out of the Rent Acts. In the present case clause 16 was a pretence." (Lord Templeman, 462H-463D) Even if you call it something other than a lease - if it has properties of a lease such as exclusive possession then still a lease - attributes of a lease - Lord Templeman in Street was emphatic that if the elements of the lease were there then the wording in a document should not be able to transform the arrangement into a licence and avoid the protections of the 1977 Rent Act: "If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect of the agreement by insisting that they only created a licence. The manufacture of a five pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade." (819F) Lord Templeman addresses the question of intention to create a tenancy, holding that the tenancy must be granted and that the "grant may be express, or may be inferred where the owner accepts weekly or other periodical payments from the occupier." (818F). As with his spade analogy, he was emphatic: "the professed intention of the parties ... cannot alter the effect of the agreement" (819H). At 825C "in my opinion in order to ascertain the nature and quality of the occupancy and to see whether the occupier has or has not a stake in the room or only permission for himself personally to occupy, the court must decide whether upon its true construction the agreement confers on the occupier exclusive possession. If exclusive possession at a rent for a term does not constitute a tenancy then the distinction between a contractual tenancy and a contractual licence of land becomes wholly unidentifiable." Ie. There must be a good way to distinguish between a lease and a licence... 826E-F "in addition to the hallmark of exclusive occupation of residential accommodation there were the hallmarks of weekly payments for a periodical term. Unless these three hallmarks are decisive, it really becomes impossible to distinguish a contractual tenancy from a contractual licence save by reference to the professed intention of the parties or by the judge awarding marks for drafting. My Lords, the only intention which is relevant is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent. Sometimes it may be difficult to discover whether, on the true construction of an agreement, exclusive possession is conferred. Sometimes it may appear from the surrounding circumstances that there was no intention to create legal relationships. Sometimes it may appear from the surrounding circumstances that the right to exclusive possession is referable to a legal relationship other than a tenancy. Legal relationships to which the grant of exclusive possession might be referable and which would or might negative the grant of an estate or interest in the land include occupancy under a contract for the sale of the land, occupancy pursuant to a contract of employment or occupancy referable to the holding of an office. But where as in the present case the only circumstances are that residential accommodation is offered and accepted with exclusive possession for a term at a rent, the result is a tenancy." Ie. it is not the intention to create either a lease or a licence that matters, rather it is the intention to grant exclusive possession for a term at a rent. Are they present, or not? If the three hallmarks are there, and they are intended to be there, and there is no contrary intention, there is a tenancy. Lord Templeman in Street v Mountford was repeatedly emphatic that it is the criteria for a lease rather than the intention of the parties that was critical: "I accept that the Rent Acts are irrelevant to the problem of determining the legal effect of the rights granted by the agreement. Like the professed intention of the parties, the Rent Acts cannot alter the effect of the agreement" (819G) "My Lords, the only intention which is relevant is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent. Sometimes it may be difficult to discover whether, on the true construction of an agreement, exclusive possession is conferred. Sometimes it may appear from the surrounding circumstances that the right to exclusive possession is referable to a legal relationship other than a tenancy. Legal relationships to which the grant of exclusive possession might be referable and which would or might negative the grant of an estate or interest in the land include occupancy under a contract for the sale of the land, occupancy pursuant to a contract of employment or occupancy referable to the holding of an office. But where as in the present case the only circumstances are that residential accommodation is offered and accepted with exclusive possession for a term at a rent, the result is a tenancy." (826H - 827B) (Note especially the first sentence here). Butcher J. in Khoo: Citing Neuberger J in Westminster Bank v Jones: "an allegation of sham carries with it a degree of dishonesty" Intention to create legal relations Lord Templeman addresses the question of intention to create a tenancy, holding that the tenancy must be granted and the "The grant may be express, or may be inferred where the owner accepts weekly or other periodical payments from the occupier." (818F). As with his spade analogy, he was emphatic: "the professed intention of the parties ... cannot alter the effect of the agreement" (819H). 826F - 827E "the only intention which is relevant is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent. Sometimes it may be difficult to discover whether, on the true construction of an agreement, exclusive possession is conferred...But where as in the present case the only circumstances are that residential accommodation is offered and accepted with exclusive possession for a term at a rent, the result is a tenancy" (Three hallmarks). Note Susan Bright's analysis of Street ("Street v Mountford Revisited"): "Whilst Street v Mountford can be understood as a narrow case to do only with labelling, it was not intended to be so confined. Lord Templeman sought to downplay the role of the parties' intentions, and to emphasise the importance of exclusive possession and the fact that classification is a matter for the law, not the parties. Nonetheless, subsequent cases show [notably the disputed case of Mikeover v Brady, which we don't study on the LLB] that what the parties intend often remains central to the classification. It is only in the narrow context of labelling that the parties' intentions are unimportant. The moving in and staying on cases show a great reluctance to find a tenancy if this is not what the parties intended. In practice, unless the owner has accepted that the occupier can stay either for an agreed period or indefinitely (subject to notice), there will not be a tenancy. Even if the occupier is there with the owner's consent, enjoying possession and paying rent, there will not be a tenancy if this is not what they mean. Intention is important, but, consistently with Street v Mountford, it is not only intention to create legal relations and intention to grant exclusive possession that matter, but also intention to create a term." Mexfield - do not need to intend to have a tenancy for life - however, if evidence of causal arrangement that intention could mean do not have a tenancy for life - first instance case: [79] ... it was undoubtedly part of Mexfield's argument before them that "there is no rule that a grant to an individual containing a term producing uncertainty is automatically a defeasible lease for life. Whether the terms of a particular agreement have that effect is a matter of construction of the agreement". (The quotation is from the record of Counsel for the claimant's argument, see page 960D of the report.) [91] I have concluded that the 'rule' does not depend for its application on the parties' intentions; but the judgments of the Supreme Court in the Mexfield case leave open the possibility that it may be disapplied where those intentions and fundamental aspects of their agreement would be confounded by it." Do "Circumstances ... negative any intention to create a tenancy" (per Lord Denning, in Facchini v. Bryson [1952] Exclusive possession (old cases read in light of Stewart case) EXCLUSIVE POSSESSION BUT STILL A LICENSEE? (1) Occupation is related to the occupier's employment contract and the property is provided by the employer (Norris v Checksfield). (2) Occupation is referable to some other legal relationship e.g where a purchaser goes into occupation of land after exchange of contracts but before completion of the purchase (unless pay rent and meet other criteria, see Bretherton v Paton). (3) Where the parties have no intention to contract with each other e.g. family members. But, rent? Booker and Marcroft Wagons. (4) People are "tolerated trespassers" Burrows v Brent (HL) BUT Sir Terence Etherton MR in Watts v Stewart (2016) on exclusive possession v exclusive occupation. This is probably how these cases would be framed today. Southward Coop v Walker (2015) The question re intention also came up in Southward, where Hildyard was trying to wrestle with Mexfield asking whether an uncertain terms should always produce a tenancy for life or whether the intention of the parties was relevant to this question: [61] The question then is whether that conclusion has the inexorable effect that the Agreement would, prior to 1925, have been treated, not as a tenancy, but as a lease for life, so that post-1925 it is treated as a lease for 90 years pursuant to section 149(6) of the LPA 1925 ... [79] ... it was undoubtedly part of Mexfield's argument before them that "there is no rule that a grant to an individual containing a term producing uncertainty is automatically a defeasible lease for life. Whether the terms of a particular agreement have that effect is a matter of construction of the agreement". (The quotation is from the record of Counsel for the claimant's argument, see page 960D of the report.) [91] I have concluded that the 'rule' does not depend for its application on the parties' intentions; but the judgments of the Supreme Court in the Mexfield case leave open the possibility that it may be disapplied where those intentions and fundamental aspects of their agreement would be confounded by it. So here he doesn't rely on intention to resolve the conundrum but he leaves the question open ... Sham agreements Note Lord Templeman's disapproval of "sham agreements" in Street: "Although the Rent Acts must not be allowed to alter or influence the construction of an agreement, the court should, in my opinion, be astute to detect and frustrate sham devices and artificial transactions whose only object is to disguise the grant of a tenancy and to evade the Rent Acts." (825H) Antoniades Lord Templeman developed these points (in extraordinarily long, dense paragraphs) in Antoniades: "The Rent Acts protect a tenant but they do not protect a licensee. Since parties to an agreement cannot contract out of the Rent Acts, a document which expresses the intention, genuine or bogus, of both parties or of one party to create a licence will nevertheless create a tenancy if the rights and obligations enjoyed and imposed satisfy the legal requirements of a tenancy. A person seeking residential accommodation may concur in any expression of intention in order to obtain shelter. Since parties to an agreement cannot contract out of the Rent Acts, a document expressed in the language of a licence must nevertheless be examined and construed by the court in order to decide whether the rights and obligations enjoyed and imposed create a licence or a tenancy. A person seeking residential accommodation may sign a document couched in any language in order to obtain shelter. Since parties to an agreement cannot contract out of the Rent Acts, the grant of a tenancy to two persons jointly cannot be concealed, accidentally or by design, by the creation of two documents in the form of licences. Two persons seeking residential accommodation may sign any number of documents in order to obtain joint shelter. In considering one or more documents for the purpose of deciding whether a tenancy has been created, the court must consider the surrounding circumstances including any relationship between the prospective occupiers, the course of negotiations and the nature and extent of the accommodation and the intended and actual mode of occupation of the accommodation. If the owner of a one-bedroomed flat granted a licence to a husband to occupy the flat provided he shared the flat with his wife and nobody else and granted a similar licence to the wife provided she shared the flat with the husband and nobody else, the court would be bound to consider the effect of both documents together. If the licence to the husband required him to pay a licence fee of £50 per month and the licence to the wife required her to pay a further licence fee of £50 per month, the two documents read together in the light of the property to be occupied and the obvious intended mode of occupation would confer exclusive occupation on the husband and wife jointly and a tenancy at the rent of £100. Landlords dislike the Rent Acts and wish to enjoy the benefits of letting property without the burden of the restrictions imposed by the Acts. Landlords believe that the Rent Acts unfairly interfere with freedom of contract and exacerbate the housing shortage. Tenants on the other hand believe that the Acts are a necessary protection against the exploitation of people who do not own the freehold or long leases of their homes. The court lacks the knowledge and the power to form any judgment on these arguments which fall to be considered and determined by Parliament. The duty of the court is to enforce the Acts and in so doing to observe one principle which is inherent in the Acts and has been long recognised, the principle that parties cannot contract out of the Acts. The enjoyment of exclusive occupation for a term in consideration of periodical payments creates a tenancy, save in exceptional circumstances not relevant to these appeals: see Street v. Mountford [1985] A.C. 809, 826-827. Pretences Lord Bridge in Antoniades: "Here the artificiality was in the pretence that two contemporaneous and identical agreements entered into by a man and a woman who were going to live together in a one-bedroom flat and share a double bed created rights and obligations which were several rather than joint." (454D) Lord Templeman in AG Securities v Vaughan: "It would have been more accurate and less liable to give rise to misunderstandings if I had substituted the word "pretence" for the "references to "sham devices" and "artificial transactions." Street v. Mountford was not a case which involved a pretence concerning exclusive possession. The agreement did not mention exclusive possession and the owner conceded that the occupier enjoyed exclusive possession. (462H-463A) "The fact that clause 16 was a pretence appears from its terms and from the negotiations. Clause 16 in terms conferred on Mr. Antoniades and other persons the right to share the bedroom occupied by Mr. Villiers and Miss Bridger. Clause 16 conferred power on Mr. Antoniades to convert the sitting-room occupied by Mr. Villiers and Miss Bridger into a bedroom which could be jointly occupied by Mr. Villiers, Miss Bridger, Mr. Antoniades and any person or persons nominated by Mr. Antoniades. The facilities in the flat were not suitable for snaring between strangers. The flat, situated in an attic with a sloping roof, was too small for sharing between strangers. If clause 16 had been genuine there would have been some discussion between Mr. Antoniades, Mr. Villiers and Miss Bridger as to how clause 16 might be operated in practice and in whose favour it was likely to be operated. The addendum imposed on Mr. Villiers and Miss Bridger sought to add plausibility to the pretence of sharing by forfeiting the right Mr. Villiers and Miss Bridger to continue to occupy the flat if their double- bedded romance blossomed into wedding bells. Finally and significantly, Mr. Antoniades never made any attempt to obtain increased income from the flat by exercising the powers which clause 16 purported to reserve to him. Clause 16 was only designed to disguise the grant of a tenancy and to contract out of the Rent Acts." (463E-G) In a problem question in the exam, you need to assess the facts to see whether rent, term and exclusive possession are present but also whether there is intention for those criteria (per Lord Bridge in Street) and whether there might be a sham or pretence (though other in property guardian contexts, this is much less likely to happen today as the rights accorded to tenants are far less significant today). If you are in any way unsure whether there is an intention to create a lease, a sham or a pretence, then it's safest to argue it both ways in a PQ. Camelot v Khoo (2018) Note how shams and pretences were considered in Khoo, albeit at first instance. Butcher J held that [19]: "(1) The court will begin by construing the agreement between the parties to consider whether it creates a tenancy, including in particular construing it to see whether it confers a right to exclusive possession (Street v Mountford at 819D-G and 825C). (2) In the process of construction, the court will consider the words used in the document in its context by reference to its subject-matter and in light of other relevant circumstances known, or which may be presumed to be known, to both parties at the time of the conclusion of the agreement, other than prior negotiations as to the terms of the agreement. In this respect, the process of construction of such agreements is not different from that of other contracts and the proper approach is that which has been considered by the Supreme Court in inter alia Arnold v Britton [2015] UKSC 36; [2015] AC 1619 and Wood v Capita Insurance Services Limited [2017] UKSC 24. (3) In this exercise of construction, there is no requirement that, before considering the context and background circumstances in which the agreement was entered into, there should be a finding of ambiguity in the words used in the agreement. On the other hand, it is normally safe to assume that the parties intended to give the words they chose their natural meaning and that the clearer the natural meaning of the words used, the less willing the court will be to depart from it. The court will not, however, be bound by the label which the parties have attached to their agreement. ... (5) For the purposes of this exercise of identifying sham devices or pretences whereby the true bargain between the parties is other than that which appears in the written document, but not for the purposes of construing the agreement, it is permissible to have regard not only to matters predating the conclusion of the agreement but also to how the arrangements were operated in practice afterwards (AG Securities v Vaughan at 469C per Lord Oliver; 475E-F per Lord Jauncey). The justification for this is that that conduct may indicate that the parties never intended that the obligations imposed by the terms of the agreement should be honoured or the rights conferred thereby should be enjoyed (see National Westminster Bank plc v Jones [2001] 1 BCLC 98 at [45] per Neuberger J). Accordingly, such conduct may give rise to the inference that, at the time it was entered into, the agreement was a pretence. (6) The production of a sham device or of a pretence ordinarily involves a degree of dishonesty. The court is slow, but not naively or unrealistically slow, to find dishonesty (Westminster Bank plc v Jones at [46] and [68])." Butcher J. considers whether there was exclusive possession by considering the terms of the contract and the surrounding circumstances (using the language of the "factual matrix", albeit a little disparagingly): "the process of construction is not confined to considering the words of the Agreement in isolation but can and should take into account the background and other circumstances existing at the time of the conclusion of the Agreement which must be taken to be known to both parties." (para 25) Wilma invites Barney and Betty to come and live in the Flint House with her and Fred (which they own) for four years, paying rent of £100 a week. The agreement says on its face that it is a "licence to stay". Fred is worried that Betty might be a bad influence on Thelma and so imposes certain "rules" which are contained in the deed, including: -No poker nights in Barney and Betty's room; -Inspections for whatever reasons, whenever Fred feels like it; -Fred reserves the right to sleep on the sofa in Barney and Betty's room if he so chooses (though Wilma tells Barney and Betty she would not let this happen). After three months, Fred wants Barney and Betty to leave. Can he require them to go? Sham/pretence (Street, Antoniades, Khoo) •Intention (Street, Southward (by analogy), Khoo ) •Context/Factual Matrix (Watts, Roynan, Khoo) •Construction of the contract (Mexfield, Watts, Southward & Khoo)