Chapter 6 Interactive key cases

Chapter 6 Interactive key cases

The leasehold estate

Four separate licence agreements had been signed on different days relating to the occupancy of a four-bedroom flat. Each agreement stipulated for different payment amounts and each excluded exclusive possession and stipulated sharing with a maximum of three other people. Held to be licences.

Look to the nature of the accommodation and the relationship between the occupiers when considering whether a clause excluding exclusive possession is real or a sham. All four unities must exist for a joint tenancy to arise.

A cohabiting couple signed separate but identical licence agreements contemporaneously giving them the right to occupy a small one-bedroom flat. The agreement stipulated exclusive possession had not been granted and the licensor had the ability to invite others to share the flat. Held to be a lease.

Look to the nature of the accommodation and the relationship between the occupiers when considering whether a clause excluding exclusive possession is real or a sham. Signing separate agreements will not defeat unity of title provided the agreements can be seen as interdependent.

Licence agreement in respect of a tiny basement room, to which the licensor retained keys. The agreement excluded exclusive possession and required the occupant to vacate the premises for 90 minutes each day. It was held to be a lease.

Look to the nature of the accommodation when considering whether a clause excluding exclusive possession is real or a sham. There is no magic in the retention of keys. Look at the purpose for which keys have been retained.

A licensee of a block of flats purported to give a homeless person a licence over one of the flats. The House of Lords found the homeless person to have a ‘lease’ since he enjoyed exclusive possession for a term at a rent.

An apparent distinction exists between a lease, which amounts to a mere contractual arrangement, and a term of years which is a proprietary interest.

A ‘tenancy’ had been granted over a strip of land until such time as it would be required back for the purpose of widening the road. Whilst it was held that this was an uncertain term, the House of Lords upheld the finding of a periodic tenancy.

There must be certainty of term for a lease to exist. Where the term appears uncertain, if the tenant has taken possession and started paying rent by reference to a period, a court may be willing to imply a periodic tenancy has been created

Occupancy was based upon a ‘licence agreement’ which gave M, in return for a weekly ‘licence fee’, exclusive occupancy of a self-contained flat. Despite the agreement containing a clause stating a tenancy was not intended to arise, M was found to have a tenancy.

Where an agreement satisfies the characteristics of a lease (exclusive possession, certainty of term, at a rent) a tenancy will be found (subject to exceptions). One must look to the substance of the transaction and not just its form.

A seven-year lease was granted to W in writing but not by deed. W went into possession and started paying rent and an issue arose which required determining whether his occupation was based upon a legal periodic tenancy or a seven-year equitable lease. He was held to occupy on the basis of the latter.

Where a valid contract to grant a lease exists that is capable of specific performance, as equity sees as done that which ought to be done, this arrangement creates an equitable lease. Where a conflict exists between law and equity, equity prevails.

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