The distinction between an equitable lease and a legal lease lies in its creation and no further. Discuss.

Identify the circumstances in which a legal lease arises and how these differ from the circumstances / formalities for the creation of equitable leases.

• Consider the position of s 52 LPA 1925 and the requirement of a deed for creation of legal leases. Explain deed requirements (s 1 LP(MP)A 1989) and the necessity to register if over 7 years (ss 4 and 27 LRA 2002).
• Consider the exemption for leases of three years or less, perhaps with a focus upon periodic leases: s 52(2) LPA 1925; Prudential Assurance v London Residuary Body (1992).
• Consider the circumstances as to when an equitable lease may arise. This discussion may include looking at agreements to grant leases and looking at leases granted in the absence of legal formalities. What formalities must be complied with? Analyse s 2 LP(MP)A 1989; Walsh v Lonsdale (1882). Clearly contrast these formalities with those of creation of legal leases. Recognize that legal and equitable leases may arise under the same circumstances (where legal formalities have failed) but that equity prevails.

Focus then upon how a legal and equitable lease differ in other ways. This may include considering:

• The fragility of an equitable lease both in terms of its actual existence (dependent upon the contract upon which it is based being specifically enforceable: Coatsworth v Johnson (1885)) and in terms of enforceability against third parties (contrast, for example, the rules regarding enforcement of legal and equitable leases in unregistered land; consider the need to enter notices on the register to protect equitable leases in registered land. Does the holder of a legal lease have to take such action to ensure it is enforceable against a third party?)
• The fact that the benefit of easements will not be transferred to the holder of an equitable lease by virtue of s 62 LPA 1925 as there is no transfer of a legal estate upon which s 62 can operate.
• The fact that for pre 1996 leases the burden/benefit of tenant covenants would only pass to a successor upon a legal assignment of a legal lease (Spencers Case (1583)).

Draw appropriate conclusions.