Chapter 9 Audio: What makes a lease, a lease? Think about your student house

In this audio I want to talk to you about what makes a lease, a lease. And I want us to think about a student house that is privately rented to help us understand the nature of leases.

Why do leases matter? Well, they matter to all of us, and students generally have some firsthand experience--good and bad--of a leasehold relationship.

The key dividing line, of course, is between leases and licenses and this is explored in the book. Why does this distinction matter? Well, license is purely personal. Therefore, they are rarely binding on anyone who's not a party to the license. They can also be brought to an end very easily and offer very few protections to licensees.

In contrast, a lease is a proprietary interest, has the potential to bind third parties--for example, purchases of a landlord’s land--and they provide far greater protections on eviction. And they give tenants more rights, such as a right to insure the property is kept in good repair and is maintained.

Now think about your student house. Arrangements vary: some students live in halls of residence and they are most likely licensees. But some students will rent privately in the private sector with a private landlord, often living with friends. Why not go and have a look at the terms of your tenancy agreement or that of your friends, if they’ll let you look at it?

A crucial question here is: what makes a lease, a lease? If you are a tenant in your students’ house, what does that mean? Well, Lord Templeman in Street v Mountford set up the classic statement of what it means to have a lease. What are the essential ingredients in our mixing bowl that give rise to a lease?

And Lord Templeman said there were three: exclusive possession, certainty of term, and rent. And as you will discover when you read the book, exclusive possession is the key determining feature. Of course, certainty of term and rent are important, but exclusive possession is vital. If there is no exclusive possession, there will be no lease, and you can use that, therefore, as an analytical tool.

If in a problem question you conclude there is no exclusive possession, the arrangement is most likely to be a license and not a lease at all. Exclusive possession is about exerting control of the land almost like a temporary owner and being able to keep people out, including the landlord, subject to the terms of the lease.

Let’s go back to the student house example. If you are a tenant of a student house, you have the rights of a tenant to keep the landlord out, subject to the terms, and to have some control over who comes and goes in relation to the property.

Don't forget the requirement, also, for certainty of term and rent, but do focus on exclusive possession. And go and check out your tenancy agreement and see what's in it--what terms you’ve agree to. It might surprise you.