Land Law: Leases and Leasehold Estates

Comprehensive vocabulary flashcards covering the SQE1 syllabus for Leases, including formalities, characteristics, enforcement rules for old and new leases, and remedies for breach.

Leasehold estate

An estate of certain or fixed duration 'carved' out of a freehold estate, where the freeholder retains the reversion.

Reversion

The interest retained by a freehold owner after granting a leasehold, entitling them to receive rent and retake physical possession once the lease ends.

Term of years absolute in possession

The legal term used in $s\,1(1)(b)$ LPA 1925 to describe a lease capable of being a legal estate in land.

Deed

The formality required under $s\,52$ LPA 1925 to create a legal lease for more than three years, meeting the criteria in $s\,1$ LPMPA 1989.

Parol lease

A short-term legal lease (three years or less) that requires no formalities for creation if it meets the criteria in $s\,54(2)$ LPA 1925.

Best rent

The market rent that must be paid for a parol lease to be considered legal under $s\,54(2)$ LPA 1925.

Doctrine in Walsh v Lonsdale (1882)

An equitable principle where a court recognizes an equitable lease based on a valid contract and the availability of specific performance, following the maxim 'equity regards as done that which ought to be done'.

Specific performance

An equitable remedy used to enforce a contract to create a lease; it is discretionary and requires the person seeking it to have 'clean hands'.

Estate contract

An equitable right created by a valid contract to transfer an existing legal estate (freehold or lease).

Exclusive possession

An essential characteristic of a lease where the tenant has the ability to exclude all others, including the landlord, and exercise general control over the property.

Permitted duration

The requirement that a lease must have a fixed ascertainable period with a definable beginning and end.

Break clause

A contractual right in a fixed-term lease allowing either the landlord or tenant to bring the lease to a premature end.

Licence

A personal right or permission to occupy land that does not create a proprietary interest and cannot bind purchasers of the reversion.

Street v Mountford [1985]

The case establishing that if the three requirements (permitted duration, exclusive possession, and correct formalities) are met, a lease is created regardless of whether the agreement is labelled a licence.

Service occupancy

An arrangement where an employee lives in employer-provided accommodation essential for their duties; this is held to be a licence rather than a lease.

Antoniades v Villiers [1990]

Case where flat-sharing agreements were held to be a lease because the agreements were interdependent and the provision for the owner to share occupation was a sham.

Fixed-term lease

A contract granting the tenant the right to occupy premises for a certain fixed duration, such as $10\,\text{years}$ or $99\,\text{years}$.

Periodic tenancy

A lease that runs from period to period (e.g., monthly or weekly) until terminated by notice, automatically renewing at the end of each period.

Covenants

Contractual terms contained in a lease detailing the respective rights and obligations of the landlord and tenant.

Quiet enjoyment

A landlord's covenant (express or implied) that the tenant's lawful possession will not be substantially interfered with by the landlord's acts.

Alienation

The disposal of the leasehold estate by the tenant, including assignment, sub-leasing, mortgaging, or parting with possession.

Assignment

The process where a tenant passes all their remaining interest in a lease to a new tenant (assignee), who then steps into the shoes of the old tenant.

Sublease

The creation of a new, shorter lease carved out of the tenant's existing head lease.

Qualified covenant

A lease term where the tenant agrees not to assign or deal with the lease without the landlord's consent.

Section 19 LTA 1927

Statute that translates a qualified covenant into a fully qualified covenant, meaning the landlord cannot unreasonably withhold consent.

Authorised Guarantee Agreement (AGA)

A statutory agreement under $s\,16$ LT(C)A 1995 where an outgoing tenant guarantees the performance of their immediate assignee.

Privity of contract

The direct contractual relationship between the original landlord and original tenant, which persists for the duration of the lease in ‘old leases’.

Privity of estate

The relationship between the current landlord and the current tenant in whom the lease is vested, allowing enforcement of 'real' covenants.

Touches and concerns the land

The test from P & A Swift Investments for 'real covenants' that benefit the land and pass with the estate rather than being purely personal.

Moule v Garrett (1872)

Common law principle allowing a person who discharges the liability of another (such as a previous tenant paying for a current tenant’s breach) to recover that amount.

Old lease

A lease created before $1\,\text{January}\,1996$, governed by the rules of privity of contract and privity of estate.

New lease

A lease created after $1\,\text{January}\,1996$, governed by the LT(C)A 1995, where tenants are automatically released from liability upon assignment.

Section 17 LT(C)A 1995

A retrospective provision requiring a landlord to serve a default notice on a former tenant within six calendar months of a fixed charge falling due to recover it.

Overriding lease

A lease for the remaining term minus three days which a former tenant can request under $s\,19$ LT(C)A 1995 after paying arrears in full following a default notice.

Commercial Rent Arrears Recovery (CRAR)

A remedy for commercial landlords to seize and sell a tenant's goods to recover rent arrears, requiring at least seven days of unpaid rent.

Forfeiture clause

An express provision in a lease allowing the landlord to re-enter the premises and terminate the lease early due to a breach of covenant.

Waiver

The loss of the right to forfeit a lease if the landlord, knowing of a breach, performs an unequivocal act recognizing the lease's continued existence, such as accepting rent.

Section 146 LPA 1925

The mandatory notice a landlord must serve before forfeiting for breaches other than non-payment of rent, specifying the breach and requiring it to be remedied.

Jervis v Harris [1996]

The case establishing the 'self-help' remedy where a landlord can enter to repair, and then recover the cost as a debt from the tenant.

Effluxion of time

The method by which a fixed-term lease naturally expires at the end of its stated duration.

Surrender

The mutual agreement between landlord and tenant to end a lease early, usually requiring a deed to merge the lease into the reversionary estate.

Merger

The termination of a lease which occurs when the tenant purchases the freehold reversion, resulting in both interests being held by the same person.