Topic 5 – Landlord and tenant: the law of leases

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Module: Property law 2023-24 Date: Sunday, 23 June 2024, 1:44 PM

Book: Topic 5 – Landlord and tenant: the law of leases

 Table of contents

Learning outcomes
Topic reading
Introduction
Mini lecture 1
5.1 The distinction between leases and licences
Mini lecture 2
Mini lecture 3
5.2 General characteristics of a lease
5.3 Creation of a lease
5.4 Determination of leases
Learning activity 1
Mini lecture 4
5.5 Covenants running with the land and the reversion
Quick quiz 1
Discussion activity 1
Sample examination question 1
Sample examination question 2
Sample examination question 3
Sample examination question 4
Sample examination question 5
Sample examination question 6
Quick quiz 2
Am I ready to move on?
Further reading
 Learning outcomes

By the end of this topic and the relevant readings, you should be able to:

set out the essential characteristics of a lease as compared to a licence

describe the methods of creating, forfeiting and assigning a lease, and distinguish an assignment from the grant of a sub-lease
evaluate the extent to which leasehold covenants are enforceable by and against successors in title of the original parties
apply all of the above to answering problem questions.
 Topic reading

Core text
Dixon, Chapter 6 ‘Leases’: Sections 6.4–6.9 and Chapter 9 ‘Licences to use land’.
 Introduction

The law of landlord and tenant is a vast subject and it is inevitable that the Property law syllabus, like most property law textbooks, concentrates on the general underlying principles, omitting any
detailed treatment of more specialised topics such as the various statutory codes designed to protect certain categories of tenants. This topic is also selective and concentrates on those areas of
leasehold law that are problematic or that illustrate some of the broad themes of English property law (e.g. the distinction between legal and equitable interests, and that between rights in rem (leases)
and rights in personam (licences)). You are expected to be familiar with the relevant terminology and, in particular, to understand the following:

the distinction between a lease and a licence

the requirements for a lease to be created validly
when covenants (promises) in leases will be enforceable by and against successors in title of the original landlord and tenant
the difference between the assignment of a lease and the grant of a sub-lease.
 Mini lecture 1

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 5.1 The distinction between leases and licences

Core text

Dixon, Chapter 9 ‘Licences to use land’.

A licence is a permission to do something, for example, to occupy or to use. When a person has permission to occupy land, it can be either:

a lease, granting statutory protection and creating an estate in land, or

a licence, a personal right, based on contract or permission.

In many of the cases you will be studying landlords attempted to avoid the statutory protections available to tenants at that time by trying to create a licence. The courts have seen beyond this and
applied the argument of substance (what was really created) over form (what people say they created). We will begin by looking at what a licence is and then move on to consider leases in more
detail.

The distinction between leases and licences is significant in the study of property law because it is a straightforward illustration of the difference between having a proprietary right (such as a lease) or
a personal right (such as a licence). The holder of a licence has merely personal (i.e. contractual) rights against the owner of the property they occupy. Because this right is purely contractual, it will not
be enforceable against the rest of the world, unlike a proprietary right. By contrast, the holder of a lease has proprietary rights against the landlord, as well as having contractual rights against their
landlord. This means that in many of the cases we consider leaseholders had rights under the Rent Acts to protect them from being arbitrarily thrown out of the property. It also means that their rights,
as proprietary rights, are capable of binding anyone in the world.

5.1.1 Licence
A licence, in its most basic form, turns a trespass into a permission to occupy or use. For the latter there is a close link with the creation of easements (see Topic 7). In relation to occupation a person
may be:

a bare licensee, whose licence may be revoked

a contractual licensee, whose licence may not be revoked in breach of contract, or
a licensee by estoppel (see Topic 6).

It is not always possible to predict which solution will commend itself to the court in any particular case, and students tackling problems in this field would generally be advised to consider all the
various possibilities.

Study task 1

Does each of the following have a licence, and if so, of which type? What does it permit them to do? What does it not permit them to do?

1. A postal worker delivering mail to a house.

2. A landlord entering premises to read an electricity meter.
3. A student who shares a house with four others, without any written agreement.
4. A 20-year-old student who lives at home with his parents.
5. A woman attending a dinner party at a friend’s house.
6. A police officer investigating a reported burglary, the owner not being present at the house in question.
7. A woman who has lived with her partner for 10 years; he promised her that she would never be evicted.
 Show feedback

The following types of licence apply:

1. is a licence by implication
2. may have a contractual, statutory or implied licence depending on the form of agreement between the landlord and the inhabitants of the premises
3. may have a contractual licence or a tenancy depending upon whether he has exclusive possession
4. probably has a bare licence, either expressly or by implication
5. probably has a bare licence, either expressly or by implication
6. probably has a bare licence, either expressly or by implication
7. can argue either an equity in her favour under the doctrine of proprietary estoppel, or an interest behind a resulting or constructive trust.

The licences held by (1), (2), (4), (5), and (6) will not grant any right to occupy the premises or to use them as one’s own.

5.1.2 Definitions and creation of licences

Bare licence
A bare licence is simply a permission to enter or use land where consideration has not been given in return. The licence prevents a claim of trespass being brought against the licensee unless they
exceed the bounds of the licence. As was famously said by Scrutton LJ in The Calgarth [1927] P 93, ‘When you invite a person into your house to use the staircase you do not invite him to slide down
the banisters.’

A bare licence may be created expressly or impliedly; for example, there is an implied licence for all persons who believe that they have legitimate business to walk up the path to someone else’s
house and knock on the door (or deliver a letter).

A bare licence may be revoked without notice at any time, and is automatically revoked by the death of the licensor or by disposition of the land in question, except where a licence is granted
expressly or impliedly to a class of people by definition rather than to an individual (e.g. the postal worker will not have to ask each new owner or tenant of a house for permission before walking up the
path, and a new postal worker will be covered by the licence given to their predecessor).

Contractual licence
A contractual licence is, unsurprisingly, a licence granted in exchange for consideration. As a result, general principles of contract law are relevant to their creation. So a contractual relationship
entered into by family members will be presumed to have no legal effect. This will also be a factor in deciding if a proprietary right has been created via a lease (see below). Very often a contractual
licence has been used in an attempt by a landowner to evade the statutory protection afforded to leaseholders, but remember that courts do not like ‘sham’ devices.

Other examples of contractual licences include paying to use a commercial car park or a ticket for a performance of a play. It can thus be seen that the contractual licence is very flexible and capable
of covering a wide range of dealings and relationships. The key issues concerning contractual licences have been: (1) revocability, and (2) whether they bind third parties.

1. Revocability

As the agreement is contractual there is assumed to be the normal remedy for breach of contract: damages. However, as an agreement over land would be unique (as all land is unique) then it may
be subject to the equitable remedies. Specific performance of the agreed contract will make the contract enforceable (Verrall v Great Yarmouth Borough Council [1981] QB 202), as will an injunction
preventing breach.

Study task 2
 Read London Borough of Hounslow v Twickenham Garden Developments Ltd [1971] Ch 233 and Verrall v Great Yarmouth Borough Council [1981] QB 202 and make brief notes of the facts and
decisions of these cases.

Although the equitable remedies may give the agreement an appearance of being akin to a property interest, Ashburn Anstalt (discussed below) has made the differences clear and confirmed that
contractual licences are not proprietary interests.

This means the issue is more problematic when there has been a sale of the land by the licensor. Is the agreement enforceable against third parties?

2. Enforcement against third parties

In line with general contractual principles, to be able to claim on a contract you must be privy to that contract. The privity requirement was modified by the Contract (Rights of Third Parties) Act 1999
but the attack on privity came much earlier in relation to land. Not surprisingly, Lord Denning, who was not a fan of privity in contract, generally, led the attack. See Lord Denning’s judgments in
Errington v Errington and Woods [1952] 1 KB 290, Binions v Evans [1972] Ch 359 and DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852.

In Binions v Evans, Lord Denning built his arguments in favour of enforceability of the licence against third parties by relying upon the existence of a constructive trust triggered by the knowledge of the
plaintiffs of the rights of the licensee, since ‘it would be utterly inequitable for the plaintiffs to turn the defendant out contrary to the stipulation subject to which they took the premises’. This is not in
itself creating a property right in the licence but a constructive trust as a remedy for a breach based on the third parties’ knowledge of the licence.

In Ashburn Anstalt v Arnold [1989] Ch 1 the Court of Appeal restated the traditional view that contractual licences are not generally binding on third parties. However, the court also recognised that, in
exceptional circumstances, a constructive trust may be imposed to compel a purchaser to give effect to a contractual licence.

According to Fox LJ (p.22 of Ashburn Anstalt):

Before Errington the law appears to have been clear and well understood. It rested on an important and intelligible distinction between contractual obligations which gave rise to no
estate or interest in the land and proprietary rights which, by definition, did. The far-reaching statement of principle in Errington was not supported by authority, not necessary for
the decision of the case and per incuriam in the sense that it was made without reference to authorities which, if they would not have compelled, would surely have persuaded the
court to adopt a different ratio. Of course, the law must be free to develop. But as a response to problems which had arisen, the Errington rule (without more) was neither practically
necessary nor theoretically convincing. By contrast, the finding on appropriate facts of a constructive trust may well be regarded as a beneficial adaptation of old rules to new
situations.

Study task 3

Do you agree with Fox LJ’s approach to Errington? The Court of Appeal has since referred to Ashburn Anstalt as being the authority on this aspect of contractual licences in Habermann v Koehler
(1996) 73 P&CR 515 at p.523.

Thus, in general, a contractual licence will not be capable of binding a third party. It may have that effect where the court finds circumstances that justify imposing a constructive trust on the third party
but, as judicial statements (e.g. by Fox LJ in Ashburn Anstalt and Lloyd LJ in Chaudhary v Yavuz [2011] EWCA Civ 1314) make clear, this will only be done exceptionally. For a third party’s conscience
to be affected it may need to have undertaken to a new obligation to give effect to a pre-existing interest.

Previously, it was also thought that the holder of any type of licence could not sue in trespass or nuisance. This view accords with the orthodoxy that licences are personal and not proprietary rights.
But this was challenged in Manchester Airport plc v Dutton [2000] QB 133 where a contractual licensee with an occupation licence was allowed to bring an action to recover land from a trespasser.
However, it is worth noting that Dutton was a 2:1 majority decision and that the dissenting member of the Court of Appeal (Chadwick LJ) was the property lawyer! That said, the majority’s controversial
view has since received support (obiter) from Lord Neuberger MR in Mayor of London v Hall [2010] EWCA Civ 817 at para.27; and by the Supreme Court ‘s determination that relief from forfeiture is
available not only to proprietary rights (leases) but may also be available to a licence over land that grants possessory rights: Manchester Ship Canal Company Ltd v Vauxhall Motors Ltd [2019] UKSC
46.

Study task 4
 Read the extracts from Manchester Airport plc v Dutton [2000] QB 133 in your casebook or read the case online, and answer the following questions.

1. What reasoning did Laws J use to support his finding that a contractual licensee could bring a claim against a trespasser?
2. Does it matter that the licence holder is not in occupation of the land? If not, why not?

Show feedback

1. A combination of: rejecting tired historical principles, vindication of the contractual rights of the licensee; and the maxim that a right must have a corresponding remedy.
2. Laws J stressed that the respondents, had they already been in possession of the land, could have obtained an order to evict the trespassers, and so he thought it illogical to deny them
such a remedy.

Licence coupled with an interest

Sometimes a licence is granted in connection with an interest, such as a profit à prendre (see Topic 7). When a person is given the right to shoot animals on land, they may be granted a licence to
enter the land in order to remove the dead animals. The licence exists to facilitate the enjoyment of the interest. Such a licence cannot be revoked before the interest concerned has ended. If the
interest in land is binding on successors in title, the licence attached to it is also binding and may be validly assigned to third parties.

Licence by estoppel
These licences arise by way of the doctrine of proprietary estoppel. If the estoppel is proved then the remedy awarded may be a licence to use or occupy the land. In Ottey v Grundy [2003] EWCA Civ
1176 the Court of Appeal had to decide whether there had been detrimental reliance on the part of the claimant and how to give effect to the equity that arose in her favour. Look at the case: do you
think the court reached a fair result? See Topic 6 for more detail.

Study task 5

1. Define ‘bare licence’.

2. Can dealings within a family give rise to an intention to create legal relations?
3. When a licence is revoked in breach of contract, what is the court’s likely response?
4. What was the argument adopted by Denning LJ in Errington v Errington and Woods [1952] 1 KB 290?
5. What impact has Manchester Airport plc v Dutton [2000] QB 133 had on the rights of licencees?

Summary
We have seen that contractual licences have evolved from personal contracts to entities which closely resemble leases. They may even become enforceable against third parties in some
circumstances (e.g. where the conscience of the successor in title to the licensor has been affected to such an extent that a court is willing to impose a constructive trust). The extent to which third
party enforceability exists is unclear, and the issue needs clarification by a Supreme Court decision.
 Mini lecture 2

15:41

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 Mini lecture 3

16:40

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 5.2 General characteristics of a lease

Core text

Dixon, Chapter 6 ‘Leases’.

5.2.1 Introduction to leases

An estate in land gives the owner of that estate exclusive possession of the land. There are two estates in land which are capable of existing at law, the fee simple and the term of years absolute. The
term of years is a lease. It is ‘carved out’ of the greater estate. Land will be owned by a fee simple owner (the landlord/lessor) who may grant a lease to the tenant (lessee). A lease of land involves
both proprietary and contractual rights for both the landlord and the tenant, and so is subject to contradictory pressures. This is heightened by the lease’s commercial importance and the wide range of
transactions which it encompasses. A tenant is an ‘owner’ of an estate in land, albeit temporarily and subject to restrictions, but equally they are a consumer contracting for the provision of ‘services’.
To further complicate the situation and as evidence of this tension between the contractual nature of a lease and its proprietary nature, recent cases (see Bruton v London & Quadrant Housing Trust
[2000] 1 AC 406) have upheld the existence of contractual, non-proprietary leases. The reasoning behind the decision in Bruton may be that the tenant needed to be defined as a tenant to come within
the statutory protections for tenants, rather than an attempt by the judiciary to undermine the long-standing nature of leases. It also shows the limited rights enjoyed by a person who has a licence.
However, to keep things simple at this stage, a lease or term of years is exclusive possession of land for a certain period of time.

Lord Templeman set out the requirements of a valid lease in Street v Mountford [1985] AC 809:

exclusive possession
fixed term
rent (either a one off payment (a premium) or paid periodically).

So this is a good place to begin our discussion.

A lease is one of the legal estates in land (s.1(1)(b) LPA 1925), as a term of years absolute in possession. Although it refers to a term of years, a lease can be much shorter.

Exclusive possession
As stated by Lord Templeman in Street v Mountford, this is the right to exclude others from the land: a tenant is entitled to keep out ‘the world’, which includes the landlord, unless the landlord is
exercising limited rights reserved to them by the tenancy agreement to enter and ‘view and repair’. So your lease may provide for the landlord to enter on certain conditions, but it is your permission
which provides for this, not the landlord’s property right. This is one of the major factors considered by the courts in making the distinction between a lease and a licence.

Fixed term
A lease must have a maximum duration, ascertainable from its outset. This requirement is subject to exceptions and statutory modifications. This term can be set at the outset or be ascertained as a
periodic tenancy. So you may have a lease which is for a month; should neither party end the agreement this may be renewed for another month. Although the maximum term of the lease is not clear
at the outset, the successive terms of the right to exclude are clear.

Rent
In Street Lord Templeman included rent in his description of the usual characteristics of a tenancy. Rent is not, however, an essential legal requirement of a lease (see s.205(x) and (xxvii) LPA 1925;
Ashburn Anstalt v Arnold [1989] Ch 1). In practice, almost every lease will involve rent paid by the tenant either in the form of a periodic payment or a lump sum at the outset. The payment of rent may
also be required for the application of some statutory provisions relating to leases (for example ss.54(2) and 149(6) LPA 1925). Absence of an obligation to pay rent may even be taken to suggest that
the parties did not intend to create a lease. Usually, the rent will be monetary but it may take other forms (even a peppercorn). What matters is that the amount of rent to be paid must be certain or at
least capable of being rendered certain: Bostock v Bryant (1991) 61 P&CR 23. A periodic tenancy’s duration is aligned with the period over which the rent is quantified rather than the period the
payments are made. So, if rent is quantified on a monthly basis, it is a monthly periodic tenancy and it does not matter that its payment is made weekly. A monthly tenancy can be brought to an end by
a month’s notice to quit from either party. What are the periods of notice required for a weekly and a yearly periodic tenancy?

There must be a capable grantor and grantee. This means that the person who creates the lease has a greater estate in the land.

Fee simple owner creates

99-year lease. The tenant then creates

60-year lease. The tenant then creates

25-year lease. And so on...

Each lease is ‘carved out’ of the greater estate (s.1(5) LPA 1925). So the person with a 60-year lease cannot grant a 90-year lease because their estate in land would end before that time.

There must also be a person capable of granting a lease and one able to accept the grant (a capable grantor and grantee). So if a person does not have an estate in land they cannot create a lesser
estate (see above). This was considered in Bruton v London & Quadrant Housing Trust [2000] 1 AC 406. A housing association was the licensee of property. As a licensee, the housing association did
not have an estate out of which it could grant a lease (i.e. a proprietary estate in land). The housing association gave Bruton the exclusive right to occupy the property. He subsequently sought the
protection of a statutory provision that applies only to tenants. The House of Lords held that Bruton had a non-proprietary lease and was a tenant of the property. The House of Lords does not clearly
explain the basis of its decision, which ostensibly flies in the face of long-established property law ideas. Academics have explored different justifications for the controversial and enigmatic decision. In
Kay v Lambeth BC [2006] UKHL 10 it was recognised that a Bruton tenancy could not bind the freeholder.

5.2.2 Exclusive possession

This topic is capable of forming the subject matter of a problem question or of an essay question in itself, distinct from the rest of the law on leases.

The test in the leading case

The decision of the House of Lords in Street v Mountford identified that the court will look for ‘the true bargain’ between the parties and so will ignore shams. Therefore, just because a document
claims on its face to be ‘a licence’ that does not mean that the courts will treat it as such unless they genuinely believe that that is the true bargain between the parties. It is common for landlords to
claim that their arrangement is merely a licence (and therefore that it does not create proprietary rights for the tenant). The courts will ignore such provisions if they consider that that is not the true
position between the parties in the remainder of the circumstances.

The key identifying factors of a lease are that:

there must be exclusive possession

it is for a term (i.e. a period of time)
it is at a rent.

Often the central purpose of problem questions in this area is to ask you to analyse closely the terms of the agreement between the parties in the light of the precise circumstances (including such
matters as the parties’ prior negotiations, the type of property and its layout and mode of their occupation) and then to present an analysis of whether the occupier has a lease or a licence by drawing
on decided cases. The skill that is being tested is your ability to apply these tests, analyses and dicta to the facts of the problem.
Two House of Lords judgments essential to answering a problem question in this area
The joined appeals in the House of Lords in AG Securities v Vaughan and Antoniades v Villiers (both at [1990] 1 AC 417) are particularly important in analysing problem questions where the claim is
brought by more than one occupier. These joined appeals had very different scenarios and came to different outcomes. You must read the joined judgment in these cases in the law reports to
understand the detail of those circumstances so that you can use them to answer problem questions. As discussed in the Introduction to this online guide, this lends itself to the ‘spectrum technique’ of
problem-answering: put each case at the end of a spectrum with its various determining factors and then argue whether the case in front of you is closer to one end of the spectrum or the other.

On the one hand, Antoniades v Villiers involved a romantic couple who rented a small flat (in the form of a room in an attic) from a landlord with two separate but identical agreements which
purported to be licences “in common with the licensor and such other licensees or invitees as [he] may permit". The arrangement was held to be a lease. The House of Lords was particularly
influenced by the fact that a number of terms in the agreement were shams, including the reservation of a right for the landlord to stay (which cannot have been intended in reality!). The
occupants had exclusive possession of the property in practice.
On other hand, AG Securities v Vaughan involved a group of unconnected individuals who responded at separate times to adverts to rent a room in a four-bedroom flat, which was rented out by
a company. Each occupant had exclusive possession over their own bedroom at most, but not the communal bathroom, kitchen, living-room and so forth. Moreover, they had none of the four
unities (of time, title, interest or possession) because they came into occupation at different times and moved rooms when someone moved out depending on seniority and the desirability of the
vacant room. Consequently, it was held that the occupants in Vaughan only had licences.
In answering a problem question in this area, one way of proceeding is to compare the facts of the problem with each of these cases (identifying similarities and differences), and so argue your
way to a conclusion as to whether the problem question resembles one case more closely than the other.
NB: applying these two cases is not all that you should do. The leading case setting out the test is Street v Mountford (which you should lay out first). There have been several cases in this area
after Antoniades and Vaughan and you should discuss relevant cases from that body of law in your answer, too.

Other useful cases

In Aslan v Murphy [1990] 1 WLR 766 it was held that the landowner had not retained exclusive possession by including in a residential occupation agreement a term that required the occupant to
vacate the premises for 90 minutes every day. The Court of Appeal concluded that the term was ‘wholly unrealistic’ and a clear pretence, and that it should be ignored in ascertaining the true
relationship between the parties.

In Mikeover v Brady [1989] 3 All ER 618 two friends (not a romantic couple) were required to sign a separate agreement, with the result that each was responsible for half of the total rent payable. The
same provision appeared in Antoniades v Villiers whereby each occupant (being part of a romantic couple) was supposedly responsible for half of the rent. In Antoniades v Villiers the provision was
treated as a sham and disregarded. Yet, in Mikeover v Brady the provision was found to be effective (so that if one party had not paid their part of the rent then the other party would not have been
required to make up the other half) and therefore they were found not to have a lease together but rather to have separate licences. Again, this is an example of two subtly differing cases that reach
different outcomes.

An occupier who does not have exclusive possession cannot be a tenant; they will usually be a licensee. Moreover, the fact that an occupier does have exclusive possession does not necessarily
mean that he is a tenant; he may still be a licensee. The easiest way to illustrate this is a hotel room. You would expect that if you book your room you will be there alone for the duration of your stay. It
would be a surprise to have booked a room and to arrive to find the hotel had put another guest in the room to share with you. You do not have a lease but a licence to occupy. The terms of the
agreement grant you sole use – not because you have a right to exclude but because the room is your property. The courts have taken great pains to establish whether the occupation is a property
right or merely personal. They are aware of the use of sham documents. The fact that a person has called the agreement a licence is merely an indicator of its status: the courts look to the substance
of the agreement and not the form.

Following the House of Lords’ judgment in Street v Mountford, whenever an occupier is granted exclusive possession of residential accommodation for a fixed or periodic term at a stated rent, there is
a presumption of a tenancy. Special circumstances might rebut that presumption. Based on Denning LJ’s explanation in Facchini v Bryson [1952] EWCA Civ 3, Lord Templeman recognised in Street
that the occupier’s exclusive possession in these exceptional situations was either attributable to some other legal source or to the absence of an intention to create a legal relationship. For example:

friendship – Marcroft Wagons v Smith [1951] 2 KB 496

family – David v Lewisham (1977) 34 P&CR 112
employee (‘service occupier’) – and the occupation is for the better performance of their duties: Norris v Checksfield [1991] 1 WLR 1241
lodgings, where services are provided such as cleaning – Marchant v Charters [1977] 1 WLR 1181
each responsible for own rent – Mikeover v Brady [1989] 3 All ER 618.
 Study task 6

Think about the following questions as you do your reading:

Does Street v Mountford mean that the parties’ intentions will seldom be relevant? Would Marchant v Charters be decided the same way today? Why should not parties be free to enter into a
residential licence agreement?

A number of cases have explored the exact limits of Street v Mountford [1985] AC 809. Although the courts will be astute to strike down sham devices purporting to deny the occupier exclusive
possession (for example: Antoniades v Villiers; Aslan v Murphy; Skipton Building Society v Clayton [1993] 25 HLR 596) it is still possible to enter into a genuine non-exclusive occupation agreement,
for example: AG Securities v Vaughan [1990] 1 AC 417 and Mikeover Ltd v Brady.

Conversely, exclusive possession at a rent for a term does not necessarily connote a tenancy if there are other factors of greater significance to be considered: see Mehta v Royal Bank of Scotland
[1999] L&TR 340. In Gray v Taylor [1998] 1 WLR 1093 exclusive possession by an almsperson * at a rent did not create a lease since the charitable trustees who were ‘landlord’ did not have the power
to create a tenancy.

* Almsperson: a person receiving charity (alms). The charity may consist of gifts of money, but in earlier centuries money was often given for the building of
‘almshouses’ where elderly poor people could be housed. Many of these small but elegant dwellings still exist.

Figure 5.1 Almshouses in Stoke Newington, London

Where there is more than one potential tenant then you must prove that as co-owners they are joint tenants. As a legal title to land can only be co-owned by joint tenants (s.1(6) LPA 1925), to have a
legal lease they must satisfy the four unities (see AG Securities v Vaughan):

1. Possession – they all have the right to exclusive possession against the world.
2. Interest – they all have the same interest in the property and their rights and obligations are joint rather than separate.
3. Time – the interest begins and ends at the same time.
4. Title – the estate is created by a single transaction.

Study task 7

1. What is the difference between exclusive possession and sole occupation?

 2. What is the significance of the lease/licence distinction?

5.2.3 Certainty of term

The term must commence at a time certain and exist for a definite period (see Lace v Chantler [1944] KB 368 where a lease expressed to last for the duration of the Second World War was deemed to
be too uncertain).

As long as the maximum duration of the term is known in advance, it is immaterial that it may come to an end at an earlier date (e.g. by the service of a notice to quit or on the occurrence of some
other event). A periodic tenancy satisfies the rule because each party has power to determine it by notice. If either party lacks such power, the Lace v Chantler rule is not satisfied. In Prudential
Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 the House of Lords reasserted a strict interpretation of the certainty of term rule after a number of cases (most notably Re Midland
Railway Co’s Agreement [1971] Ch 725 and Ashburn Anstalt v Arnold [1989] Ch 1) had sought to relax its requirements. The judgment is notable for the forthright assertion of orthodoxy by Lord
Templeman (who, incidentally, was the losing senior counsel in Re Midland Railway Co’s Agreement) in the face of an otherwise hesitant and ambivalent House of Lords who queried, but ultimately
did not challenge, why any such requirement exists. In light of the House of Lords’ unenthusiastic application of the rule in Prudential it is perhaps not surprising that the Supreme Court took the
opportunity afforded them by counsel’s clever argument in Mexfield Housing Co-operative Ltd v Berrisford [2011] UKSC 52 to sidestep the requirement by resort to old case law and a rarely invoked
statutory provision. The case involved a clause in an occupancy agreement that stated that it could only be terminated if the occupier was in arrears or had otherwise breached its terms. In the Court
of Appeal it was held that the agreement was void as a lease for uncertainty of term as its maximum duration was uncertain under Prudential Assurance Co Ltd v London Residuary Body. On appeal
to the Supreme Court the agreement was seen differently: it was accepted that a lease of uncertain duration was void for lack of certainty of term. However, before the 1925 legislation, such a lease
would have been deemed to be a tenancy for life determinable on the happening of the uncertain event, which under s.149(6) LPA 1925 was converted into a tenancy for 90 years, determinable either
on the death of Ms Berrisford or in accordance with the terms of the original agreement. Although it was not necessary to determine the point, Lord Neuberger also expressed the view that Ms
Berrisford would also have won on her alternative ground that the terms of a licence should continue to bind the original parties to the licence. The Supreme Court, like the majority in Prudential v LRB,
showed no great enthusiasm for the certainty of term requirement and consequently embraced an imaginative means of avoiding its implications on these facts. However, you should be aware of the
limits of the decision. For example, the device whereby a lease of uncertain duration is deemed to be a determinable life tenancy will not work where the lessee is a corporate entity as they cannot
hold a lease for life. In addition, the device will only be available where rent is payable – that being required by s.149(6). All that aside, even where the statutory provision can operate to save an
otherwise uncertain term, this does not dispense with the need to satisfy relevant formality requirements (such as s.53 LPA 1925 or s.2(1) LP(MP)A 1989) for the creation of a valid lease: Hardy v
Haselden [2011] EWCA Civ 1387.

In Mexfield, the application of the rule that converts an uncertain term to a 90-year lease determinable on the tenant’s death (‘the Rule’) was consistent with the intention of the transacting parties.
However, Baroness Hale contemplated situations in which the application of the Rule would frustrate their intention. Hildyard J was confronted with just this situation in Southward Housing Co-
operative Ltd v Walker [2015] EWHC 1615 (Ch). The landlord granted to the tenants a weekly tenancy but agreed not to terminate the tenancy as long as the tenants observed their obligations under
the lease. As the fetter on the landlord’s ability to terminate the tenancy created an uncertain term, Hildyard J had to decide whether the Rule applied. As a matter of construction, Hildyard J concluded
that the parties envisaged that the tenancy would be long term, but that they did not intend to create a lease for the tenants’ lives: the provision permitting the landlord to terminate in the event of
breach was inconsistent with any such intention. Accordingly, Hildyard J considered that the application of the Rule to the case before him ‘would confound the accepted approach to the construction
of any agreement, including a tenancy agreement, substitute for the meaning of the contract on its true interpretation an entirely different contract, and thereby contradict the intention of the parties’.
Hildyard J was able to avoid this ‘bizarre’ result. After a careful analysis of the judgments in Mexfield he concluded ‘with diffidence and anxiety’ that the Rule can be displaced where its application
would be inconsistent with the intention of the transacting parties or would frustrate fundamental aspects of their agreement. One question remained for consideration: if the lease was void for
uncertainty and was not saved by the application of the Rule, what was the effect of the parties’ agreement? Hildyard J adopted the obiter comments in Mexfield and held that the agreement took
effect as a contractual licence – a licence which could only be determined in accordance with its terms. Southward, then, both distinguishes Mexfield on the facts and also addresses the role of
intention, a point that the Supreme Court had left open. More controversially, in Gilpin v Legg [2017] EWHC 3220 (Ch), Judge Paul Mathews went further (at [84] and [85]) expressing (obiter)
‘respectful doubt’ on whether the authorities considered by the Supreme Court did in fact support the Rule.

A term is usually limited to take effect from the date of the grant (i.e. in possession) but it is possible to create a term limited to commence at some future date (a reversionary lease), but not more than
21 years from the date of the grant: see s.149(3) LPA 1925. A lease for life or until marriage (which would otherwise fall foul of the rule in Prudential Assurance Co Ltd v London Residuary Body) is, if
granted at a rent or in consideration of a fine, to take effect as a lease for 90 years: s.149(6) LPA 1925. Lack of a commencement date does not necessarily render a lease void, particularly if it is a
commercial lease and the parties intended it to be enforceable: Liverpool CC v Walton Group plc [2002] 1 EGLR 149. Finally, note that perpetually renewable leases are converted into terms of 2,000
years: s.145 and Schedule 15 LPA 1922. The danger here is that a lease containing a covenant for renewal on the same terms may be construed as a perpetually renewable lease and converted to a
2,000-year term. Compare Caerphilly Concrete Products Ltd v Owen [1972] 1 WLR 372 and Marjorie Burnett Ltd v Barclay [1981] 1 EGLR 41 where it was stated that ‘...the leaning of the courts has
been against perpetual renewals’.
 Study task 8

1. What are the four unities?

2. Why are they important in relation to leases?

Summary
A lease grants exclusive possession of the land for a certain fixed or periodic term, usually in consideration of a rent or premium. The lease/licence distinction centres upon whether the claimant has
exclusive possession of the land. A valid lease depends on the maximum duration of the term being prospectively known (i.e. known at the outset) unless it qualifies for conversion into a 90-year lease
determinable on the tenant’s death.
 5.3 Creation of a lease

Core text

Dixon, Chapter 6 ‘Leases’: Section 6.3.

5.3.1 Legal leases

A lease is capable of subsisting at law (s.1(1)(b) LPA 1925). To be legal it must meet certain formal requirements. Here the length of the lease is crucial, but remember that despite the length of the
lease it must satisfy the basic requirements of a lease.

Some leases are exempted from formality requirements by ss.52(d) and 54(2) LPA 1925. The exemption only applies where three requirements are satisfied. First, the lease must be granted for a
term of three years or less. (This will include a periodic lease based on the payment of rent.) Second, the lease must take effect in possession (i.e. the term must commence on the same day that the
lease is granted). Third, the lease must be granted at the prevailing market rent: Fitzkriston LLP v Panayi [2008] EWCA Civ 283.

Leases over three years but up to (and including) seven years must be created by deed (s.52 LPA 1925 – see s.1 LP(MP)A 1989 for what constitutes a deed).

A lease over seven years is now a trigger for registration under s.27 LRA 2002 and in addition to creation by deed it must be registered to take effect at law.

Leases requiring substantive registration

Any legal leasehold estate for a term of more than seven years requires registration (ss.3(3), 4(2) and 27(2) LRA 2002). Thus, the length of a lease requiring registration has been shortened
considerably from 21 years under LRA 2002. This means that the lease over seven years will have its own substantive entry on the Land Registry.

Leases protected by notice and leases that override

A lease exceeding three years but not exceeding seven years can be protected by the entry of a notice on the charges register of a registered title (ss.32/33 LRA 2002). A lease of three years or under
cannot be entered on the register (s.33 LRA 2002).

Although leases exceeding three years but not exceeding seven years can be protected by the entry of a notice, there is little incentive to protect them in this way because they are automatically
overriding under para.1 of Schedule 3 LRA 2002. The reason why it is not possible to protect a lease of three years or less by a notice is to maintain the efficiency of the register and not clog it with
minor short interests.

Leases created before October 2003, which would have been overriding under LRA 1925, will remain overriding (para.12 Schedule 12 LRA 2002).

5.3.2 Equitable leases

When a person has tried to create a legal lease but failed to fulfil the requirements (set out above) there may still be an equitable lease. For this to operate, the agreement must satisfy the
requirements for an estate contract set out in s.2 LP(MP)A 1989, which replaces s.40 LPA 1925. If these requirements are satisfied, the principle in Walsh v Lonsdale (1882) 21 Ch D 9 may apply.

A question that is commonly raised is the extent to which an agreement for a lease is as good as a lease. As between the parties it may be, but in a number of other respects it is not.

The doctrine depends on the discretionary remedy of specific performance. Consider the circumstances in which the remedy would not be available: see, for example, Coatsworth v Johnson [1886–
90] All ER 547.

Before 1926 an equitable lease, which is a form of estate contract, was liable to be destroyed by a bona fide purchaser of a legal estate for value without notice.
However, the position in respect of post-1925 agreements has been changed, as regards unregistered land, by the Land Charges Act 1972 (i.e. they are registrable as class C(iv) land charges). If the
land is registered, equitable leases may, and now often must, be protected by entry on the land register and they may also rank as overriding interests if they fall within the terms of protection provided
by para.2 of Schedule 3 of the LRA 2002.

Study task 9

In 2019 Anne enters into an agreement to give exclusive possession for 10 years of Greenacre (a registered title) to Paul for a quarterly rent of £300. All the terms are in a written document and
they both sign this. Paul moves in and regularly pays the rent. Anne has now sold the freehold of Greenacre to Simon. Simon wants Paul to move out. Advise Paul.

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As freeholder Anne is able to grant Paul a lease; it is for a fixed term and with exclusive possession and rent. This satisfies the elements set out in Stree t v Mountford [1985] AC 809. As the
lease is over seven years it requires a deed (s.52 LPA 1925) which satisfies the requirements of s.1 LP(MP)A 1989. It would also need to be substantively registered (s.27 LRA 2002). It is
unclear if there is a deed; if there is, it has not been registered on the facts given, so cannot take effect in law. As Paul is paying rent it may be a periodic lease, based on the payment of rent, for
each quarter. If so this would be a valid legal lease under s.54 LPA 1925 and would be binding on a purchaser as an overriding interest (para.1 Schedule 3). However, the periodic tenancy can
be ended by notice by either party and would not protect Paul.

If the writing satisfies s.2 LP(MP)A 1989, then this may be an equitable lease. An equitable lease is an interest in the land, which (when coupled with actual occupation) will be overriding under
para.2 Schedule 3 LRA 2002.

Study task 10

Does it matter to a tenant whether his lease is legal or equitable?

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A few statutory rights only apply to tenants of legal leases and sometimes there are different registration requirements.

Study task 11

How does (a) an equitable lease and (b) a periodic tenancy come into existence?

A lease may also be created by estoppel: Tower Hamlets LBC v Sherwood [2002] EWCA Civ 229, but of course it is inchoate until recognised as existing by a court.

Summary
Where an ‘ordinary’ legal lease fails, either a periodic tenancy or an equitable lease may exist instead and allow the enforcement of an agreement between the parties.
 5.4 Determination of leases

Core text

Dixon, Chapter 6 ‘Leases’: Sections 6.7–6.9.

5.4.1 Forfeiture
A lease or tenancy may be terminated in a number of ways. Most of these give rise to no particular difficulty, though some points regarding forfeiture and notice need to be noted. The Law Commission
has made repeated far-reaching proposals for the reform of the law, which will be noted below.

Forfeiture is the landlord’s right to re-enter premises because of a tenant’s breach of covenant. It should be noted that there are special controls on the forfeiture of residential tenancies. A lease
cannot be forfeited for breach of covenant unless it contains a forfeiture clause, and a landlord may in any case be prevented from proceeding with the forfeiture if he waives the breach (i.e. if with
knowledge of the breach he does some unequivocal act recognising the continued existence of the lease): see Matthews v Smallwood [1910] 1 Ch 777.

Study task 12

Consider the sort of acts from which waiver may be implied: read Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048, then answer the following questions:

1. How had Woolgar breached the lease?

2. Why were the landlords so keen to forfeit the lease?
3. How important are the intentions of the parties? Here the landlord did not intend to waive the breach and the tenant was aware that he did not.

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No feedback provided for parts (1) and (2).

3. In spite of the reasons why the landlord was adamant that he wanted to forfeit the lease, the fact that he had sent a rent demand for a future rent instalment was held by the Court of Appeal
to be a waiver. It made no difference that Woolgar still believed that forfeiture was going ahead; the test is one of the ‘reasonable onlooker’, who always thinks that rent demands are waivers of
breach.

Moreover, before a right of forfeiture can be enforced (e.g. by issuing and serving a writ for possession), certain conditions must be satisfied, though the breach of a covenant to pay rent is treated
differently from the breach of any other covenant.

Non-payment of rent – there must be a formal demand (unless this is excluded by the lease or dispensed with by the Common Law Procedure Act 1852) and the tenant may apply for relief both in
equity and, usually, under the 1852 Act.

Other breaches – the landlord must serve on the tenant a statutory notice in writing under s.146 LPA 1925 which must specify the breach complained of, require it to be remedied if possible and
require the tenant to pay compensation (if required). If the breach is capable of remedy, the landlord must allow a reasonable time to elapse to enable the tenant to comply with the notice; they may
then proceed to enforce the forfeiture. If successful, forfeiture will also affect any subtenant since their sublease will be destroyed. The question whether a particular breach is capable of remedy is
important both in determining whether a s.146 notice which does not require the breach to be remedied is good or not, and in considering whether the tenant has had sufficient time to comply with the
notice.
 Study task 13

Read about the following cases in your textbook and casebook and make notes on how the court in each case classified breaches of covenant as remediable or irremediable:

Rugby School (Governors) v Tannahill [1935] 1 KB 87

Glass v Kencakes Ltd [1966] 1 QB 611
Expert Clothing Service and Sales Ltd v Hillgate [1986] Ch 340
Akici v LR Butlin Ltd [2005] EWCA Civ 1296.

Would it be possible to argue that breaches of negative covenants (i.e. promises ‘not to do’ something, such as build on land or run a business on premises) are in their nature not capable of
remedy whereas breaches of positive covenants are? Or may the breach of a negative covenant sometimes be capable of remedy?

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The distinction is not always easy to make in practice, since it is possible to phrase the same covenant both positively and negatively – ‘I promise not to alter the building’ is in essence the same
as ‘I promise to keep the building in the same condition’. But it is generally accepted that breaches of positive covenants are remediable; the tenant can simply do what he or she was supposed
to do. With negative covenants, what has been done cannot usually be undone (e.g. with a covenant not to sub-let the premises, or not to run an immoral business on the premises, the damage
had already been done by breach). There are, however, inconsistent cases on this point: see the controversial decision in Savva v Houssein (1996) 73 C&PR 150, where all breaches of
negative covenant outside the Scala House principle were thought to be capable of remedy. The most recent Court of Appeal case addressing this issue – Akici v LR Butlin Ltd [2005] EWCA Civ
1296 – endorsed the general approach in Savva v Houssein.

Relief against forfeiture

Finally, at any time before the landlord has re-entered, the tenant may apply for relief against forfeiture, which may be granted on such terms as the court thinks fit (s.146(2) LPA 1925); a subtenant
may also apply for relief (s.146(4) LPA 1925), as can the holder of a charge on the land in question (Bland v Ingrams Estates Ltd [2001] 2 WLR 1638). A tenant may apply for relief even when the
landlord has forfeited the lease by physical re-entry on the land: see Billson v Residential Appointments Ltd [1992] 1 AC 494. A key issue is whether forfeiture is a disproportionate penalty for the
specific breach. If it is, then relief is likely to be granted.

The court may grant relief even for a breach which is irremediable. Consider the kind of factors that the court will take into account in deciding whether to grant relief or not (see Shiloh Spinners Ltd v
Harding [1973] AC 691; Bathurst (Earl) v Fine [1974] 1 WLR 905; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048; GMS Syndicate Ltd v Gary Elliott Ltd [1982] Ch 1; Bland v
Ingrams Estates [2001] Ch 767; Freifeld v West Kensington Court Ltd [2015] EWCA Civ 806).

In relation to most leases of more than 21 years, ss.168 and 169 Commonhold and Leasehold Reform Act 2002 prevent a landlord from issuing a s.146 notice unless the tenant has either admitted the
breach or a leasehold valuation tribunal has accepted the evidence of breach. These sections came into force on 28 February 2005 and do not affect s.146 notices served before that date.

5.4.2 Notice
A fixed term lease cannot be determined by notice unless this is expressly agreed; a periodic tenancy is determined by notice and any term that seeks to prevent the landlord from ever determining the
tenancy is void at law as being repugnant to the nature of the tenancy: see Centaploy Ltd v Matlodge Ltd [1974] Ch 1.

Subject to contrary agreement the notice of termination is a full period expiring at the end of a completed period, though it is half a year in the case of a yearly tenancy. For example, a weekly tenancy
commencing on a Monday can be determined by notice given on or before one Monday to expire at midnight on the following Sunday.

Subject to the limitations in the first paragraph above, a lease may be terminated by either party by the giving of notice. The notice must be an unambiguous exercise of the relevant term in the lease
(Aylward v Fawaz (1997) 2 HLR 408). The requirements of a lease regarding notice and how it is to be given must be complied with strictly, although the bare majority of the House of Lords in Mannai
Investment Co v Eagle Star Life Assurance Co [1997] AC 749 held that minor errors do not invalidate notice as long as the decision to terminate the lease has been conveyed with sufficient clarity.
See also Ravenseft Properties v Hall [2001] EWCA Civ 2034.

Study task 14

1. Two parties agreed a tenancy to commence on 1 January 2021, at a rent of £12,000 per annum payable monthly. In February 2021 the landlord decided that he wanted to determine the
tenancy. How should he do this?
2. What if the tenancy had been for eight years?

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1. He needs to look closely at the terms of the lease first to check for an express notice provision. Is it a periodic tenancy or a fixed term lease? If a periodic tenancy (probably monthly since
that is the frequency of payment), then he needs to give one month’s notice; if a fixed term tenancy, then the notice period in the contract will apply. If it had been a yearly periodic tenancy
then he would have had to give six months’ notice.
2. If the tenancy had been for eight years, then he had better hope that there is an express notice provision or a breach by the tenant!

5.4.3 Other methods of termination

A lease will in general be terminated by any transaction which results in the leasehold estate and its reversion being owned by the same person (including merger and surrender). Lord Millett in Barrett
v Morgan [2000] 2 AC 264 said that ‘a surrender is simply an assurance by which a lesser estate is yielded up to the greater, and the term is usually applied to the giving up of a lease or tenancy
before its expiration’. (The House of Lords appears to have affirmed Lord Millett’s dissent on the property issues, but mainly concentrated on the (now irrelevant) tax problem.)

Surrender requires a deed at law, but a contract for surrender is effective in equity. Informal surrender is implied when the landlord and tenant conduct themselves in a manner which is inconsistent
with the continuation of the lease.

5.4.4 Reform proposals

The Law Commission has repeatedly made reform proposals in this field of law. It stated in its 2006 report (Law Com 303, ‘Termination of tenancies for tenant default’):

It has long been recognised that this area of the law is in need of reform. It has been the subject of frequent criticisms for many years. It is complex, it lacks coherence, and it can
lead to injustice.

Consequently, the Law Commission proposed in the 2004 consultation paper that the current law should be abolished and replaced by a statutory scheme under which almost all termination
proceedings would be heard in court, with greater fairness to the tenant. The scheme is designed to be complementary to that proposed under the Law Commission report on ‘Renting homes’ (Law
Com 284, November 2003). Their 2006 Report proposed more specific reforms in its suggested Landlord and Tenant (Termination of Tenancies) Bill. The aims of the proposed new scheme for
forfeiture would be simplification, transparency and rebalancing of rights. The circumstances which justify forfeiture would be labelled ‘tenant default’ and would allow forfeiture regardless of whether
the landlord had a right of re-entry or forfeiture clause in the lease. Waiver of breach would be abolished. A tenant default notice (rather similar to the current s.146 notice) would be required to be
served by the landlord and if the breach were not remedied, then a court could give whatever remedy was thought appropriate and proportionate in the circumstances from six suggested orders. The
government has not yet responded to the 2006 Report.

Summary
The main methods of termination of leases are the giving of notice and forfeiture.

In both cases, extra protection may be given to residential tenants. The courts have discretion to grant relief from forfeiture even where a tenant’s breach is irremediable.
 Learning activity 1

Fill in the missing words to identify which method of terminating a lease is in use in the following scenarios.

The lessee hands in their keys to the lessor, who accepts them:

In a commercial lease, a lessee in default with their rent arrives at work to find the door barred against them:

A lessor indicates clearly in writing that the lessee should leave at the end of the next period of their lease:

The lessor and the lessee sign a deed terminating a lease early:

In a long lease of a flat, the lessor starts proceedings for the possession of the flat:

A fixed term lease reaches the end of its term:

A lessee acquires their lessor’s interest in the land:

 Check
 Mini lecture 4

09:39

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 5.5 Covenants running with the land and the reversion

Core text

Dixon, Chapter 6 ‘Leases’: Sections 6.4–6.6.

The lessor may assign their reversion and the lessee may assign the lease. A deed is necessary for the legal assignment of a reversion and of a lease no matter how short the term. Many leases
contain a covenant against assignment, subletting or parting with possession of the land without the landlord’s consent and in such cases s.19(1) Landlord and Tenant Act 1927 provides that this
consent is not to be unreasonably withheld. If the tenant seeks the consent but it is unreasonably withheld, they may go ahead and assign, etc. without the consent. The Landlord and Tenant Act 1988
imposes on the landlord certain obligations relating to the giving and withholding of consent.

5.5.1 Enforceability of covenants

The Landlord and Tenant (Covenants) Act 1995 (LTCA 1995), which came into force on 1 January 1996, has radically altered the law in this field. However, most of its provisions apply only to post-
1995 leases and, therefore, the previous law will remain important for a long time to come. You will need to understand both regimes. In the discussion that follows the old regime (old leases) will be
set out first and then the LTCA 1995 reforms (new leases).

It may help to keep the diagram in figure 5.2 in mind when working out the rules below.

Figure 5.2: Diagram showing the relationship between the original lessor and tenant, which is one of privity of contract, and that between the assignees of the lessor and of the tenant, whose relationship is
only one of privity of estate.
Under the doctrine of privity of contract the original parties remain liable on the covenants of the lease for the duration of the term. As stated by Lord Templeman in City of London Corporation v Fell
[1994] 1 AC 458:

The common law did not release the original tenant from liability for breaches of covenant committed after an assignment…the fortunate English landlord has two remedies after an
assignment, namely his remedy against an assignee and his remedy against the original tenant.

This can prove very onerous – particularly for the original tenant. A good example is Centrovincial Estates v Bulk Storage [1983] 46 P&CR 393, where the original tenant was liable for the two quarterly
instalments of increased rent unpaid by a later assignee of the lease; the original rent was £17,000 per annum and the revised rent was £40,000 per annum. Due to the perceived unfairness to original
tenants who have not themselves defaulted, the courts (for example in City of London Corporation v Fell and in Friends’ Provident Life Office v British Railways Board [1996] 1 All ER 336) have sought
to limit the operation of this principle. In Fell the House of Lords gave a limited concession to original tenants by holding that they were not liable for rent left unpaid by a later assignee of the lease,
where the term of the lease had been extended beyond its original 10-year term by a later assignee. In Friends’ Provident the Court of Appeal found that an original tenant was not bound by later
variations of the lease between landlord and assignee, unless the variation had been foreseen in the terms of the original lease (e.g. by having a rent review clause). In relation to pre-1996 leases
LTCA 1995 now restricts the right of a landlord to recover rent from the original tenant after assignment via s.17, so that now the landlord must serve the original tenant with warning of their potential
liability for an assignee’s breach – a ‘problem notice’ – within six months of the rent becoming due. This limits the tenant’s potential liability to six months’ worth of rent in effect, but note that the
provision does not apply to damages owed for breaches of non-rent covenants. However, s.19(1) entitles the original tenant made liable for an assignee’s breach to recover a leasehold interest in the
land, once they have paid the full amount owed, so in effect they can get very valuable compensation.

Assignee of lease
It is also important to determine the circumstances in which persons other than the original parties to a lease can sue or be sued on covenants in that lease. In the case of the assignment of a lease
the rule is that both the benefits and burdens pass if two conditions are fulfilled. In the first place, the covenants must ‘touch and concern the land’ or ‘have reference to the subject matter of the lease’.
Most textbooks contain lists of covenants that have been held to touch and concern the land or not to do so. Examples include Hua Chiao Commercial Bank Ltd v Chiaphua Industries Ltd [1987] AC
99, where the Privy Council held that the landlord’s obligation to return the tenant’s deposit at the expiration of the lease did not touch and concern the land, and Kumar v Dunning [1989] QB 193
where the Court of Appeal held that a covenant by a surety guaranteeing the payment of rent did touch and concern the land.

In Swift Investments v Combined English Stores [1989] AC 632, the House of Lords approved Kumar v Dunning and held that the test to be applied was whether:

the covenant benefited only the reversioner for the time being
it affected the nature, quality, mode of user or value of the reversioner’s land, and
it was not expressed to be personal.

The second general requirement is that there must be privity of estate between the lessor and the assignee of the lease (i.e. there must be a legal lease – see Purchase v Lichfield Brewery [1915] 1
KB 184) and there must be a legal assignment of the whole term. If these conditions are satisfied, the common law rule in Spencer’s Case (1582) 77 ER 72 lays down that the benefits and burdens of
covenants that touch and concern the land will pass to the assignee of the lease.

Study task 15

What is the position if the original lease is equitable (or the assignment is equitable) and there is therefore no privity of estate?

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Equitable leases are within ss.141 and 142 and so benefits and burdens pass with the reversion. But until LTCA 1995, burdens did not pass from one equitable tenant to another. This means
that the assignee from a tenant could sue the lessor but cannot be sued by him. Or could it be argued that the fusion of law and equity in the Judicature Acts has eliminated the distinction
between legal and equitable leases? See Boyer v Warbey [1953] 1 QB 234. Note that for post-1995 leases, LTCA 1995 applies to all leases, legal or equitable.

Assignees of the reversion

By virtue of ss.141 and 142 LPA 1925, the benefits and burdens of covenants having reference to the subject-matter of the lease will pass on the assignment of the reversion, whether the lease is by
deed or not: see Rickett v Green [1910] 1 KB 253.

The assignee becomes the only person entitled to sue, even in respect of breaches of covenant that occur before the assignment: Re King [1963] Ch 459 ; London and County (A and D) Ltd v Wilfred
Sportsman Ltd [1971] Ch 764.

Sublessees
There is neither privity of contract nor privity of estate between a lessor and a sublessee, so covenants in the lease will not be directly enforceable against the sublessee under the rule in Spencer’s
Case. However, restrictive covenants may be enforceable under the doctrine in Tulk v Moxhay (1848) 47 ER 1345 (see Topic 8).

Moreover, if the head-lease contains a forfeiture clause, the lessor can re-enter and determine that lease for breach of covenant, even (it seems) for breach of a covenant that does not touch and
concern the land. Then the sub-lease will come to an end, unless the sublessee can obtain relief. The principles in this paragraph also apply where an equitable lease has been assigned or where
there has been an equitable assignment of a lease.

5.5.2 Post-1995 leases (new leases)

Throughout LTCA 1995, no distinction is made between legal and equitable leases and legal or equitable assignments (s.28). The benefit and burden of all covenants will pass on an assignment of a
lease or reversion, except those expressed to be personal. It no longer matters whether the covenant touches and concerns the land.

See First Penthouse v Channel Hotels and Properties [2004] EWCA Civ 1072 on the meaning of ‘expressed to be personal’ under LTCA 1995.

Original parties
In relation to post-1995 leases, LTCA 1995 releases a tenant from the covenants after they have assigned (s.5) unless the assignment was in breach of covenant or by operation of law (s.11). The Act
provides a procedure for the release of a landlord from their covenants after they have assigned (s.8), subject to their giving notice of the assignment to the tenant and the tenant not objecting. The Act
thus goes a long way towards abolishing privity of contract in this context. The general scheme is that when a tenant assigns their lease, they are released from the covenants (subject to the possibility
of the landlord extracting an ‘authorised guarantee agreement’). In cases where a landlord’s consent is required to an assignment, a landlord will try to make the tenant sign an authorised guarantee
agreement, by which the tenant acts as a guarantor for the person to whom the tenant assigns (s.16).

Assignees of lease, and assignees of the reversion

There are very few covenants which do not ‘run’ under LTCA 1995. The requirement of ‘touching and concerning’ is abolished, so all landlord covenants and tenant covenants automatically pass with
an assignment of either the reversion or the lease. Section 3 LTCA 1995 covers the transmission of such covenants, but personal covenants are specifically excluded (s.3(6) LTCA). In BHP Petroleum
v Chesterfield Properties [2001] EWCA Civ 1797 it was held that all terms agreed between the original landlord and tenant pass automatically unless a covenant is qualified so as to make it personal,
with liability between the original parties. On the facts the covenant was purely personal and so was not covered by LTCA 1995. Thus, equally, liability for purely personal covenants does not pass to
an assignee, so the original landlord remains liable for the duration of the lease in respect of a personal obligation upon them to repair the premises. The s.8 procedure for releasing a landlord from
their obligations cannot apply to a personal covenant. Moreover, an assignee has no rights or liability in relation to pre-assignment breaches.

Sublessees
The rules relating to the enforceability of covenants against sublessees are unaffected by LTCA 1995.

In London Diocesan Fund v Avonridge Property Company Ltd [2005] UKHL 70 the lease included an express term releasing the landlord from the landlord covenants immediately he assigned his
interest in the property to a third party. The tenant argued that this term was void under s.25(1) LTCA 1995, since it attempted to avoid the requirements of ss.6–8 of that Act. The House of Lords
rejected this argument and held that the term was valid. Thus the Avonridge clause allows an original landlord to escape liability under a lease without having to serve a notice on the tenant. It both
destroys an essential element of the Act and indicates that the House of Lords still regards leases as contractual creations.

Study task 16
 1. How has LTCA 1995 affected the enforceability of leasehold covenants?
2. When are covenants enforceable against sublessees?

Summary
LTCA 1995 has greatly changed the law relating to the enforceability of leasehold covenants, and improved the position of the original parties after assignment. Almost all covenants will ‘run’ under
LTCA 1995. However, the ‘old’ law still applies to leases created before 1996, for which it remains necessary to check whether covenants ‘touch and concern’ the land.

Study task 17

Return to Topic 2 - Reflective activity 1. Can you improve on the answers you provided before? Revise them in the light of what you have learned now.
Quick quiz 1
 Discussion activity 1

Discuss the following question:

Review the material on certainty of term in the Guide and the textbook, and read the judgments in Mexfield Housing Co-operative Ltd v Berrisford.

Do you agree with Lord Neuberger JSC that the requirement of a fixed term for a lease serves no real purpose and should be removed?

Post your answers in the Topic 5 – Discussion activity 1.

Topic 5 – Discussion activity 1

 Sample examination question 1

Question
On 1 January 1994, Lena granted Tricia a 30-year lease of Stapleton House (registered land) at an annual rent of £15,000, payable in advance. Stephen covenanted, as surety, to guarantee payment
of the rent by Tricia. Under the lease the tenant covenanted not to use the house for business purposes, and the tenant was given the option to purchase the reversion. In 2000, Tricia assigned the
lease to Arthur, who had granted a five-year sub-lease to Stan, and Lena assigned her reversion to Richard. No rent has been paid for two years. Stan has opened a hairdressing salon in the house.

Richard wants to know:

i. Whether he can recover the rent arrears and from whom

ii. Whether he can enforce the user covenant and against whom
iii. Whether he is bound by the option.

Advise Richard.

How, if at all, would your advice differ if the original lease had been granted in 1996?

Tutor guidance
It is extremely helpful in questions on enforceability of covenants to draw a diagram which shows all the parties, using vertical lines to represent the relationship between landlord and tenant and
horizontal lines to show an assignment.

The first part of the question considers the pre-1996 law (as modified by ss.17 and 19 LTCA 1995). Accordingly, you will need to consider both privity of contract and privity of estate, and the possible
relevance of the law of restrictive covenants. The possible liability of each of Tricia, Stephen, Arthur and Stan will need to be considered.

The second part of the question requires equally careful consideration of the effects of the LCTA 1995 on each of the parties.

Note that the land is registered. How is this relevant?

➕ Feedback
Read and follow the three sub-questions to make sure that you do not miss any important issues.

The first part of the question largely concerns the operation of the pre-LTCA 1995 law, although ss.17–19 apply to old tenancies.

You should consider whether the benefit of the rent covenant has passed to Richard (s.141 LPA 1925) and whether he can enforce it against Tricia (original tenant), Stephen (surety), Arthur
(assignee) and Stan (sublessee). Different considerations apply in each case.

Look first at the position under privity of contract. Tricia contracted to pay the rent and remains liable on the covenant after the assignment of her interest, subject to ss.17 and 19 of the LTCA.
Richard has the benefit of the covenant because of the operation of s.141 LPA 1925. To the extent that Tricia remains liable, Stephen is also liable.

Next, consider privity of estate. There are two requirements for the enforcement of a covenant here; covenants must ‘touch and concern the land’ and there must be a legal assignment of the whole
term. Both are plainly satisfied here; a covenant to pay rent touches and concerns the land, as does a covenant of surety to p[ay the rent (Kumar v Dunning [1989] QB 193). Accordingly, Richard
can enforce the rent covenant against Arthur and Stephen, and in this respect Stephen’s liability is not protected under the LTCA.
There is no privity of estate or contract between Richard and Stan but see the answer to the next part of the question.

The same rules apply to the user covenant, although only damages would be available against Tricia and Arthur (since an injunction against them would not be of any use) and Stephen has only
guaranteed the payment of rent so that he is not liable.

It is possible that Richard can enforce the covenant directly against Stan as a restrictive covenant, q.v. Also, Richard can bring forfeiture proceedings against Arthur for breach of covenant. If these
succeed, Stan will lose his lease as well, unless he seeks relief (which would inevitably require him to cease the breach of the user covenant).

In relation to sub-paragraph (iii), Richard will be bound only if the option has been registered or if it is supported by ‘actual occupation’.

The second part of the question concerns LTCA 1995 but the same orderly approach is called for.

Richard’s position is governed by s.3, Tricia and Stephen are released when Tricia assigns (s.5, in absence of authorised guarantee agreement), so Richard can sue Arthur alone (s.3) for post-
assignment arrears.

Richard can bring an action against Stan under s.3(5) LTCA 1995.

The law relating to the enforceability of the option is unchanged (s.3(6)(b)).

You are not asked to discuss remedies.

 Sample examination question 2

Question
In 1990, Lionel, by deed, granted to Thomas a lease of Blackacre (a house with a tennis court), for 50 years. In the lease Thomas covenanted (inter alia) to pay the rent, to keep the house in repair,
not to do anything that might be a nuisance or an annoyance to neighbours, and to allow Lionel to use the tennis court on one day each week; the lease also reserved to the lessor a right of re-entry
on breach of covenant. In December 1994, Thomas by deed sublet Blackacre to Victor for the residue of the term less three days, and shortly afterwards assigned his lease to William. Lionel consults
you, saying that the house is in disrepair, that Victor has been convicted of possessing cannabis found on Blackacre and that he (Lionel) has not been allowed to play tennis this year.

Advise Lionel. Would your advice be the same if all these events had occurred after 1 January 1996?

➕ Feedback
This question concerns leasehold covenants and their enforceability after assignment. The position of subtenants is also covered. You need to work out whether each covenant is legal or equitable
and positive or negative, and whether it touches and concerns the land or is personal. Then you will be able to tell which pass on assignment of the lease, and can work out whether forfeiture is
available for any breach committed. Lionel is the original landlord and so you do not need to worry about assignment of the reversion. You also have to answer the question twice: once on the ‘old’
law pre-LTCA 1995, and then again under the ‘new’ law of that Act. It is extremely helpful in questions on enforceability of covenants to draw a diagram which shows all the parties, using vertical
lines to represent the relationship between landlord and tenant and horizontal lines to show an assignment. So, what we have is the diagram in Figure 5.3.

Figure 5.3: Representation of the relationship between parties involved (L = Lionel, T= Thomas, W=William, V=Viktor)

L wants to sue T for the breach of each covenant and also presumably to forfeit the lease.

There are four covenants to consider:

1. to pay rent
2. to repair
3. not to cause a nuisance/annoyance
4. to allow Lewis to use the tennis court.
They are all legal since they are contained in a deed, but they may have effect in equity as well.

Under the old law, privity of contract means that Thomas is liable under all the covenants. However, since he no longer has an estate in Blackacre, suing Thomas can only result in damages, not in
forfeiture or any other means of remedying the breaches. The LTCA 1995 puts some limitations on this in ss.17 and 19, which you will need to set out.

For there to be privity of estate, the covenants need to touch and concern the land. (1), (2), and (3) clearly do (see the case law). (4), on the other hand, seems plainly to be personal; apart from
anything else, as the question expresses it, it appears to be for Lionel’s benefit rather than for the benefit of the person with the reversion of the lease. Privity of estate would therefore allow Lionel
to sue and to bring forfeiture proceedings against William for breach of covenants (1) to (3) even though he is not the person with possession of the premises. Such forfeiture proceedings would be
effective to bring Victor’s lease to an end as well, unless Victor applied for relief against forfeiture (s.146(4) LPA 1925); such relief would not be granted unless the breaches were remedied.

This conclusion assumes that there is a re-entry clause, which will be the case with any professionally drafted lease. Lionel would have to follow the procedures for the different types of breach
correctly and it would be useful to set these down.

Finally, covenants may be enforceable in equity against sub-tenants under the law of freehold covenants (Topic 8) so long as they are negative. This applies to covenant (3).

You are also required to look at the law after the LTCA 1995 comes into effect. In the absence of an authorised guarantee agreement (s.16), this releases Thomas from his continuing liability under
the covenants (s.5). The ‘touch and concern’ test for covenants is abolished (s.3), so that William would be bound by nearly all covenants; in our case, however, covenant (4) is purely personal, so
he is still not bound by that.

The position relating to sublessees remains unchanged by the 1995 Act.

 Sample examination question 3

Question
In 2010 Len granted Tim a lease of Commercial House for 30 years. Len covenanted, inter alia, to maintain the exterior of the building in a good state of repair. In 2013 Tim assigned his lease to Alf
and in 2015 Len assigned his reversion to Rob. The exterior of the building is now in serious need of repair and Alf wishes to know whether he can enforce the repairing covenant and, if so, against
whom.

Advise Alf.

How would your advice differ, if:

a. Len and Tim had agreed that the covenant was to be personal, or, alternatively, if
b. Len and Tim had agreed that Len was to be released from liability when he assigned the reversion?

➕ Feedback
This question requires a consideration of LTCA 1995. By virtue of s.3 Alf would be able to enforce the repairing covenant against Rob, but not against Len (assuming that Len had complied with the
ss.6–8 release provisions).

However:

a. If the covenant was expressed to be personal, s.3(6)(a) would apply and neither the benefit nor the burden of the covenant would pass on assignment, nor could Len be released (BHP
Petroleum Great Britain Ltd v Chesterfield Properties Ltd [2001] EWCA Civ 1797).
b. The question arises whether an agreement that Len should be released on assignment of the reversion falls foul of s.25 on the grounds that it frustrates the operation of the Act. This involves
a discussion of London Diocesan Fund v Avonridge Property [2005] UKHL 70, an important case with which you should be familiar.
 Sample examination question 4

Question
(Tutor feedback activity 2019)

Alice, a landlord, posts an advertisement on an online property website. It reads:

‘Large one-bedroom flat to rent in North London. Low rent. Great location. Recently modernized. Would suit couple’.

Bella and Charlie, a newly married couple, are looking for flat to rent in North London and arrange a viewing.

When they arrive to view the flat, Alice says “I’m late for an appointment, take a look around and close the door when you leave. If you want the flat sign this agreement’.

The agreement Alice gives to Bella and Charlie states:

1. The occupiers shall pay a licence fee for occupation of the property. The licence fee shall be £1,200 per month excluding utility bills.
2. The landlord shall be able to introduce any relative or friend to occupy the property with the occupants.
3. This agreement creates a mere licence and not a lease. The landlord only agrees to make the premises available on that basis.’

While they are looking round the flat, Denzil, a previous occupant arrives to collect his mail. He tells them that he had lived there with his girlfriend and that Alice had once asked to stay
at the flat overnight but that he refused to allow it and she left immediately.

The flat consists of one bedroom with a double bed; a kitchen; a small bathroom; and a separate living-room with a sofa bed to sleep one person. There is also a small ‘utility room’
containing a washing machine. The utility room also contains a broken bicycle which belongs to Alice.

Advise Bella and Charlie as to the nature of their rights if they were to sign this agreement.

Tutor guidance
Relevant case law

Street v Mountford
AG Securities v Vaughan
Antoniades v Villiers
Aslan v Murphy
Mikeover v Brady.

For this problem, consider the distinction between leases and licences. A good answer will lay out the requirement for exclusive possession for a term at a rent and the general principle against shams
(looking to the substance and not the form) in Street v Mountford.

The facts resemble Antoniades v Villiers with elements of the other cases listed above thrown in. You should survey the facts of the problem and identify the ways in which they suggest a lease even if
the agreement suggests a mere licence. The newspaper advertisement suggests a lease for a romantic couple.

1. Cl.1 states it is a licence but the case law requires us to look to the substance; except if it can be shown to be the genuine intention of the landlord. The description of the rental payment should
prompt you to reflect on Mikeover v Brady as well as the core test in Street v Mountford.
 2. Cl.2 resembles Antoniades where the landlord sought to refute exclusive possession by means of a purported right to introduce a third person into the premises. Here, the facts suggest that the
landlord does not intend to effect this right, thus suggesting it is a sham. You should consider the furniture in the flat and its layout as suggesting that no third person could reasonably be
expected to live in the property.
3. Cl.3 should prompt a good student to reflect on Somma v Hazelhurst and whether the precise terms of the bargain between the parties (i.e. that this is a licence) should be binding; or whether
the court will look at the true bargain between the parties.

A good answer should probe the facts of the problem and apply the principles from those cases and compare the facts of the problem to the salient facts of the cases that prompted the courts to reach
the analyses that they did.

Student answers with tutor feedback

Note: Students were asked to submit an answer up to 2000 words.

First example: Answer and feedback

Upper second example: Answer and feedback
Lower second example: Answer and feedback
Third example: Answer and feedback
Fail example 1: Answer and feedback
Fail example 2: Answer and feedback.
 Sample examination question 5

Question
(Tutor feedback activity 2024)

Aubrey was the registered freehold proprietor of two properties in London, a bakery with its own living accommodation, and a four bedroomed house in which he lived.

In January 2023 Aubrey moved his family out of London. He agreed with Ena, the manageress of his bakery, that she could move into the empty flat above the bakery. Ena had just split
up with her boyfriend and needed somewhere to live. Aubrey was relieved to have somebody living on the premises now that he was no longer in London. Ena moved in to the flat and
paid Aubrey the monthly sum they agreed upon. They also agreed that she would occupy the flat ‘until either (i) Ena gave Aubrey notice to quit; or (ii) Aubrey served Ena with a notice to
quit because his daughter, Faith, needed to live in the flat.’ When Ena moved into the flat Faith was away on an indefinite backpacking trip around the world.

To generate income from his London house Aubrey agreed that Banksy, Carland Dev could live there for two years from 1st March 2023. They each signed separate ‘Residency
Agreements’ with Aubrey. Each agreement included the following terms:

(a) The resident will pay £500 to the owner each calendar month.
(b) The owner may enter the premises as and when he wishes in order to inspect the condition of the premises and/or carry out repairs.
(c) The owner can stay in the house overnight on Sunday whenever he wants.’

Before signing the agreement Dev asked Aubrey about Clause (c). Aubrey explained that it was there in case he needed to be at the bakery very early on a Monday morning. He added
that as Ena was now living in the flat above the bakery it was unlikely that he would need to stay in the house.

On 1st March 2023 Banksy, Carl and Dev moved into the house. Each month, Carl and Dev transferred their share of the rent (£500 each) into Banksy’s bank account, and Banksy made a
single payment of £1,500 to Aubrey. Aubrey entered the house on average once a month to inspect and carry out minor repairs. On each occasion, he emailed Banksy beforehand to tell
him what time he would be coming.

Last month Aubrey asked Banksy, Carl and Dev to leave the house because he had decided to sell it with vacant possession. They refused because they believe that they are tenants.
Faith also returned to the UK. She wants to live in the flat but Ena has refused Aubrey’s request to leave the flat.

Advise Aubrey.

Tutor guidance
A will want advice on the nature of E’s right to live in the flat above the bakery, and his ability to insist she now leaves so that F can move in. In advising on whether E has a lease, there is rent and
exclusive possession (and so no need to deal with either in depth). Here, there is scope to look at the (probably unlikely) prospect that by E living over the shop (and the resulting reassurance A
derives from that) means that even with exclusive possession hers is a service occupancy and not a lease. The contentious issue is, however, absence of a term with a maximum duration that is
sufficiently certainty at the start (occupation until E decides to serve a notice to quit or F needs somewhere to live). A good answer would advise A about E’s chances of being able may to benefit from
the Berrisford ‘cure’ for invalidity– a 90 year determinable lease. In which case A will need to dispute that they ever intended to create a long-term lease for E’s life, something which later judicial
thinking suggests is relevant. If the agreement is invalid, then A needs advice on the possibility that E’s occupation of the flat is either a licence or an implied periodic tenancy, and how each may be
terminated. Credit can be given for brief and targeted advice on formalities, whether any lease (90 year or implied periodic tenancy) is legal or equitable.

With B C D’s rights to occupy A’s four-bedroomed house, there is rent and a maximum duration of two years, making the content of the agreement consistent with it being a lease. This leaves the
contentious issue - whether B C D enjoy exclusive possession of the house as joint tenants. Labeling – ‘resident’ and ‘residency agreement’- is inconclusive in determining the nature of their ‘true
bargain’. What matters is that the substance gives them the legal right to exclude all others, including A from the property. Here the impact of clauses (b) and (c) merit analysis by reference to the case
law, including Street and Aslan. The way clause (b) preserves A’s right to enter in such broad terms (as and when he wishes) can be argued as being inconsistent with B, C and D having a lease. But
how much weight can be placed on the way A’s inspections have occurred in practice (monthly and with notice in advance) to reach a conclusion that the clause is intended to be a pretence? With
clause (c) the house has a spare bedroom, which on the face of it, may point to the term being consistent with a licence. But the advice may explore whether A telling D that he is unlikely to stay over
is the basis for finding the clause to be a sham/pretence. If so, what is the consequence of such a finding in the overall determination of the existence of exclusive possession? Even if the agreement
confers exclusive possession, are the multiple occupants – B, C and D – joint tenants? They sign identical agreements; but are they interdependent? The main obstacle is clause (a) and its
inconsistency with unity of interest because each of them is only liable for £500 (Mikeover; Antionades). Their practice of B gathering the rent and making a single monthly payment to A is presumably
irrelevant. But if A accepts payment of the total from one, could it be argued this pushes it towards being a JT? Again the advice may consider whether the lease is legal rather than equitable, although
credit should be given for an appreciation of the (in)significance of this between the original parties.

Student answers with tutor feedback

Note: Students were asked to submit an answer up to 1500 words.

First example: Answer and feedback

Upper second example: Answer and feedback
Lower second example: Answer and feedback
Third example: Answer and feedback
Fail example: Answer and feedback
 Sample examination question 6

Question
(Peer feedback activity 2024)

‘The law’s approach to determining whether or not the term of a lease is sufficiently certain requires reform.’ Discuss.

Feedback Prompts
The feedback prompts below outline the areas that could have been included in the answer. They were used in the activity for students and tutors to give feedback to others on how well the answer
addressed the question.

1. Does the answer recognise that (along with exclusive possession) certainty of term is an essential component of a lease, without which a valid lease cannot exist?
2. How well does the answer accurately identify what certainty of term means in English law? In other words, does it recognise that leases not only need to start at a clearly defined moment but,
more importantly their maximum possible duration must be certain from the start (even if the lease can be ended sooner: e.g. by exercise of a ‘break clause’)?
3. Does the discussion sufficiently consider how the requirement applies to fixed term leases and how periodic tenancies (i.e. monthly or yearly periodic tenancies) are regarded as satisfying the
rule even though in the period renews indefinitely until it is ended by one of the parties: Berrisford v Mexfield Housing Co-operative Ltd (2011)?
4. Does the discussion mention statutory provisions that cure otherwise uncertain terms – those for life/marriage, reversionary and perpetually renewable leases?
5. Is the exploration of the legal test for certainty appropriately supported by discussion of case law, especially the leading cases on the need for the maximum duration to be certain from the
outset: Lace v Chantler; Prudential Assurance Co Ltd v London Residuary Body (1991) and Berrisford v Mexfield Housing Co-operative Ltd (2011)?
6. Does the answer identify what happens where the term of a lease is found to be void for uncertainty? How then does the law determine the parties’ relationship in respect of occupation of the
land?
7. Does the answer include appropriate discussion of: the ‘judicial workaround’ to mitigate the rule crafted by the Supreme Court in Mexfield; the limitations of the workaround (applying only to
individuals and where rent is paid); and its subsequent treatment in the lower courts in Southward Co-operative v Walker (2015) (on the role of intention) and Gilpin v Legg (2017) (questioning
(obiter) the way the Supreme Court interpreted the case law it relied on)?
8. Is there adequate discussion of the justifications of the rule? How well does it critically consider why the judges in Prudential and Mexfield decided against abolishing the rule? Is there
discussion of the merits of maintaining the rule but relaxing it to allow determining if a term is certain retrospectively (Ashburn Anstalt v Arnold (1988)) rather than prospectively?
9. To what extent does the answer include a discussion about the need for reform? Does the answer engage critically with the wealth of judicial/academic views about the justification(s) and
problems with the rule? Is there a discussion of the robust judicial criticisms (such as those of Lords Browne-Wilkinson and Neuberger and Baroness Hale) of the rationale for the rule; and the
variety of views of leading scholars on it (e.g. Bright (1993) LS 38; Low [2012] MLR 401; and Williams [2015] CLJ 592)?
10. Overall, how well does the answer relate to the question set throughout? Does it focus on the need for reform rather than merely providing a descriptive survey of the rule and relevant caselaw?
Does it include treatment of irrelevant aspects of leases (such as exclusive possession, rent and formalities)?

Student answers with tutor feedback

Find below example answers submitted by students along with the tutor feedback.

Note: students were asked to submit an answer up to 1500 words.

First example: Answer and feedback

Upper Second example: Answer and feedback
Lower second example: Answer and feedback
Third example: Answer and feedback
Fail example: Answer and feedback
 Quick quiz 2

Which of the following is not essential for a valid lease?

 Exclusive possession

 Rent

 Fixed term


 Am I ready to move on?

You are ready to move on to the next topic if, without referring to the module guide or text book, you can answer the following questions:

What are the essential characteristics of a lease as compared to a licence?

How is a lease created?
How is a lease terminated?
What is the difference between an assignment and the grant of a sub-lease?
For leases created before 1996, to what extent are leasehold covenants enforceable by and against successors in title?
How did the LTCA 1995 change the position for leases created after 1995?
 Further reading

Battersby, G. ‘Contractual and estoppel licences as proprietary interests in land’ (1991) Conv 36.
Bevan, Chapter 9 ’Leases’.
Bevan, Chapter 10 ‘Leasehold covenants’
Bogusz and Sexton, Chapter 10 ‘Licences and proprietary estoppel’: Sections 10.1–10.5.
Bogusz and Sexton, Chapter 11 ‘Leases – the basic requirements’, especially Section 11.5 ‘Formalities for leases’.
Bogusz and Sexton, Chapter 13 ‘The running of covenants in leases’.
Bogusz and Sexton, Chapter 14 ‘Termination of leases’: Sections 14.1–14.4.
Davey, M. ‘Privity of contract and leases – reform at last’ (1996) 59 MLR 78.
Gray and Gray, Part 10 ‘Privacy, access and exclusion’: Sections 10.3–10.5.
Law Commission Report, ‘Termination of tenancies after tenant default’ (October 2006) Law Com 303.
Law Commission Report, ‘Renting homes’ (November 2003) Law Com 284.
Low, K. ‘Certainty of terms and leases: curiouser and curiouser’ (2012) 75 MLR 401.
Lower, M. ‘The Bruton tenancy’ [2010] Conv 38.
Smith, Chapter 18 ‘Leases: types and requirements’ (available in VLeBooks).
Smith, Chapter 19 ‘Leases: obligations and remedies’, Part 4 ‘Forfeiture’ (available in VLeBooks).
Smith, Chapter 20 ‘Leases: parties and the running of covenants’ (available in VLeBooks).
Smith, Chapter 22 ‘Licences’ (available in VLeBooks).
Sparkes, P. ‘Certainty of leasehold terms’ (1993) 109 LQR 93.