Leases and Tenancies
What the exam tests
Leases and tenancies test the distinction between a lease and a licence, the creation and assignment of leases, covenants, and termination. The central issue is exclusive possession.
Core rules
- A lease grants exclusive possession for a certain term at a rent; rent is not always essential. A licence merely permits occupation and creates no proprietary interest.
- The label used by the parties is not decisive; the court looks at substance. Exclusive possession plus a fixed or periodic term points to a lease.
- Legal leases usually require a deed; short leases may be created orally or in writing under statute. Periodic tenancies arise by payment and acceptance of rent.
- Covenants include quiet enjoyment, non-derogation from grant, repair, and payment of rent. Assignment transfers the whole term; subletting grants a shorter term.
- Termination may occur by expiry, notice to quit, surrender, merger, forfeiture for breach, or disclaimer.
Worked example
O lets a room to P for five years at a monthly payment. The agreement calls it a “licence” and says O may move P to another room. Because P has exclusive possession of a defined room and no genuine right of relocation is exercised, the substance is a lease. P therefore has a proprietary term that may bind O’s successor if registered or overriding.
Traps
Relying on the label “licence”; finding a lease without certainty of term; ignoring statutory formalities; confusing assignment with subletting; missing waiver of forfeiture.