Licenses and leases

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  • Created by: Nikki
  • Created on: 10-04-16 14:05

Bare licences

Bare licence to be on my land = mere permission to be there

Explicit or tacit voluntary permission

If I state a limit to the duration, you become a trespasser if you stay on my land after this time

Promises made without consdieration are not binding --> I can revoke permission at any time
- before you enter or once you're on my land
- if permission if open-ended I can revoke it whether or not you have the impression that you could stay permanently

Enough time to take yourself and where relevant your bleongings off my land

Operate in personam

Relevant law = surprisingly confused --> some support for 2 further provisions
(1) I must express my announcement so that it takes effect only after reasonable delay --> may simply be to protect my right of enough time to leave
(2) assumes that (1) does represent the law, then goes on to assert that its requirement of 'reasonable dealy' means enough time not merely to leave, but also to make alt arrangements --> dubious --> why should your future needs be of my concern rather than something for you to consider before settin gso much store by mere gratuitous promise

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Contractual licences

Supported by consideration --> oblgied to give you this permission

Express or implied term of contract

May give you the right alone or a right enablign you to perform an obligation which the contract simultaneously imposes on you

Your responsibility to keep within duration confines of licence

If open-ended permission, I can terminate it --> but must allow enough time to remove yourself and belongings and perhaps give you reasonable notice beforehand, and/or enough time to make other arrangements

Any attempt to revoke oicence, either before or after entry, before end of duration is a breach of contract -->
- court usually awards specific performance
- but sometimes have to award damages

In personam --> Ashburn Anstalt v WJ Arnold & Co (CA) 

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Licences coupled with an interest

Licence with different legal characteristics to bare/contractual licences because it is attached to a further interest

Cannot terminate it prematurely --> whilst you are still able to enjoy your interest 

Operate in rem

Require interest:
(1) right in rem in my land
(2) right in rem in chattels situation on my land
(3) some autohrity of interest consisting in right of any other kind to enjoy which you ned to be on my land --> but prevailing view is this doesn't exist

Do such licences even exist? --> argument that there is little reason, and no need, to think that the law maintains the concept of a licence coupled with an interest at all
- as a matter of authroity concept has not got great support
- not really necessary
- binding a disponee --> only true problem it solves is that as a right in rem where the interest isn't in the land itself the licence can still bind a disponee 

Question whether or not to acknowledge the concept of a licence coupled with an interest largely reolves into a question whether access rights associated with chattel interests should, against the background of the numerous clausus principle, be accepted as rights in rem
- arguable that they should  not --> even though you cannot demand entry to C's land to collect your property it remains yours and if you are prevented from retrieving it you can still sue A and/or C for their value --> probably protection enough

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Significance of lease-licence distinction

Basic distinction is that licences are contractual rights (in personam) whereas leases are proprietary rights (in rem)

Distinction important because law provides certain statutory protections to lessees but not to licensees --> l

Leading cases concern owners who seek to frame agreements so they will be construed as licences rather than leases so as to avoid the sattutory oblgiations imposed on landlords -->

Courts interpretations of these agreements and of the requirements of a vlid lease have been significantly shaped by a desire not to make it easy for owners to contract of of statutory oblgiations

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Basics of leases

  • right in rem
  • landlord/owner still entitled to freehold rights in reversion once lease has finished
  • also known as --> demise; term of years absolute
  • enfranchisement and the right to buy 
  • leases fall under the Rent Acts legislation 
  • Division between leases and licences hard to accept -->
    • in both bases if it is their home they can both seek protection of Art 8 ECHR
    • those with licences in weaker position and require more protection

Legal definition of a lease:

Street v Mountford --> HL --> 
- confers exclusive possession
- payment (rent and/or lump sum)
- for a term 

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Exclusive possession (1)

  • not a question of physical presence but a question of entitlement --> is the claimant exclusively entitled to use of the land?
    • can exclude all others if you wish
    • not inconsistent with others retaining some limited rights to use tha land
  • legal starting point - if you have exclusive possession you have an open-ended set of powers to use the land as you like and to contrl others' use of the land
  • conferral -->
    • if I have the right of exclusive possession to give, then if I purport ot confer it on you, you will get it
    • if I do not have it myself but purport to confer it --> you do not acquire exclusive possession itself but you do acquire a contractual right to it --> operates in personam only 
  • shared occupancy --> number of people can take a single right exclusively to possess the property, if they do so as 'joint tenants' of the right
    • must acquire etntitlement to land together; have share for same period, share a single set of rights and obligations
  • access by landlord
    • difficult question but limited rights of landlord to enter (for maintenance, repair and inspection do not appear to be contrary to exclusive possession, but access for cleaning probably is)
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Exclusive possession (2)

Shams and pretences

  • 'sham devices and artificial transactions whose only object is disguise the grant of tenancy and to exclude the Rent Acts' - Templeman in S v M
  • 'pretence' --> if it was 'never seriously intended in fact; if it does not reflect 'the substance and relaity' of the transaction; or if the parties do not regard it as a provision 'to which any effect would be given' (A v V - Templeman)
  • Problem with 'substance and reality' concept
    • fragile because ultimately impresionistic 
    • contrast between 2 different cases shows 2 different understandings of the idea
      • (1) attends solely to human story on the ground
      • (2) parties' chosen legal vehicle is to be taken seriously
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Payment

In priniple no reason why I should not give you a right exclusively to possess myland, for a term, and thereby grant you a lease, even without you paying for it

Lump sum --> premium or fine

Rent --> series of payments at periodic intervals of life of lease

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Term

Must be limited to some particular duration

Complication  --> cases where th arraignment is expressed neither to last for a definite time, nor to last forever

  • defined time but of uncertain duration
    • Prudential Assurance - arrangment to such effect cannot be a valid lease - must be possible to know its maximum duration at outset
    • exception --> s149(6) Lpa - such a lease for life of human is turned into one for 90 years, termianble before death in pre-agreed circ and also terminable on your death 
  • rule appears far from well routed
    • some cases before Prudential took diff line --> only objectionable arrangment tob e one of avowedly indefinite duration
    • exception above
    • law has accepted validity of 'periodic tenancies' --> to square them with rule in prudential they are presented as comprising a series of individual leases, each for the period in question, put end to end --> but practical implicaitons undermine rule
  • eviction of tenant from premises in question by revealing lease to be invalid --> interference with home? (Art 8 ECHR) --> if no sensible basis to this rule then this interference cannot be justified as proportionate --> subject to issues of horizontal effect, the rule must be liable to rejection on HR grounds
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Labels and interpretation

Labels --> not the label that parties give their agreement that matters, but the existence of key indicators of a lease or other right

Interpretation

  • right exists in rem if that status will do enough good to outwiegh harm it will do
    • essential content of a lease = temporary ownership --> right to allow as much flexibility as possible over configuation of leases --> but remains essential that core idea of temporary ownership is maintained, so as to preserve the basis on which leases deserve to be rights in rem --> correct thefore to insist on exclusive possession (onwership) and a term (temporary)
  • detailed positions of cases best understood as elements in a project to ensure that certain social situations are covered by the Rent Acts 
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Operation of leases (1)

Kinds of obligation

  • most leases impose on landlord and/or tenant a number of addiitonal oblgiations --> 'covenants'
  • can be made by express provsiions in lease or implied by statute 
  • principally to oblgie landlords to keep domestic residential accommodation in good order
  • tend to be interpreted fairly narrowly

Enforcement

  • Damages
    • for breach of contract and any loss arising from it 
    • unpaid rent 
  • Injunctions --> generally available to prevent future breaches of negative obligations
  • Specific performance --> under appropriate circ may be available
  • Self help may be possible, but less familiarly 
  • Under certain circ a breach by one party will allow other to terminate early 
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Operation of leases (2)

Termination

  • in principle, leases terminate automatically at end of their duration 
    • will not engage Art 1 for 'inherent limitation' reasons
    • Art 8 probably engaged but interference justified on same grounds
  • similarly, if we agree that lease should termiante early, this is possible
  • two complications --> periodic tenancy / statutory extension --> security of tenure
  • termination on breach
    • repudiatory breach by landlord --> tenant can withdraw
    • repudiatory breach (of condition) by tenant --> forfeiture
      • landlord cannot terminate despite breach without
        • notifying tenant of position and giving htem chance to put breach right
        • even if tenant fails to put mattes right they may seek relief from forfeiture
      • if available, forfeiture can be by court order or, except in the case of a residential lease, by 're-entry'
      • re-entry without corut order may be incompatible with Art 6 ECHR
  • forfeiture = to confine me to my legitimate interests
  • subjec tto isssues of horizontal effect, forfeiture may raise questions under ECHR --> art 1 not engaged on basis of 'inherent limitation'; art 8 probably engaged but steps that must be gone through to reach forefiture usually mean that it is proportionate and justified 
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Operation of leases (3)

Acquisition of leases

  • new lease given and existing lease trasnferred, normally by an intentional conferral
  • occasionally given as relief for proprietary estoppel claims
  • can be acquired by adverse possession
  • lease for fixed term of 3 years or less may usually be created orally
  • above this, conferral requires deed
  • once term goes above 7 years, conferral is not efective unless it is registered 
  • if I purport to confer a lease on you but fail to use necessary formality, conferral may still have some effect
    • if transaction in writing --> equitable lease
    • if you begin paying rent you will probably be found to have a periodic tenancy
  • rules providing for electronic registration would produce more coherent treatment, if that project were pursued 
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