Landlord And Tenant Law

• Publisher: Straightforward Publishing Digital
• Year: 2015
• ISBN:
  9781847166302
• Topic: Law
• Subtopic: Real Estate Law
• Index: Law

Emerald's Guide to Landlord and Tenant Law is a comprehensive guide to all aspects of the law as it relates to property ownership. The book will enable the reader to understand this complex area and to understand more fully the law as it relates to ownership and leasing of residential and commercial property. The book will also assist the student or professional.

1

An Outline of the Law

The law of landlord and tenant deals with the relationship, or the legal rights and obligations that arise between people when they form a relationship that is connected to land.

Defining estates in land

There are two types of estates in land which are recognised by the law. These are:

1) An estate in fee simple absolute in possession

2) A term of years absolute.

An estate in fee simple absolute in possession

This rather long-winded term means essentially a freehold estate. The holder of fee simple absolute has an unlimited amount of time on the land. This is the closest thing to absolute ownership of land that is allowable under law. The holder of a fee simple absolute is entitled to carve up the land and create smaller estates for fixed periods of time.

A term of years absolute

Under section 1 of the Law of Property Act 1925, a term of years absolute is an estate of fixed duration, i.e. a 125 lease which expires after the duration of this period. A term of years absolute is usually known as a leasehold estate. Whenever a term of years absolute is carved out of a freehold estate the relationship of landlord and tenant arises.

Classes of occupier

Land can be occupied by a person or persons in a number of ways. There are four broad categories of occupation:

• Freehold ownership. As stated, this is where the whole estate is owned indefinitely.

• Tenant. Where a person or persons own an estate for a fixed amount of time

• Licensee. This is where a person is given permission to use the land for a period of time.

• Trespasser. This is where someone simply moves into a premises and occupies illegally.

These are the four categories of occupier at common law. Every occupier falls into one of these categories. When dealing with any type of landlord and tenant problem the first step is to determine to which category of occupier a person(s) belong.

The majority of housing Acts deal with the category of occupier who is a tenant or lessee and not with the other categories, freeholder, licensee or trespasser.

Freehold ownership

The freeholder has the strongest estate in land with the freedom to carve other estates out of it. Witness the great London estates of Grosvenor or Cadogan. Through aristocratic privilege they own great tracts of freehold land in London and have carved other estates in land out of these freeholds. This is the basis of their wealth. However, as we shall see these estates are under attack through the leaseholders right to enfranchise and to extend leases. The occupier who owns the freehold is, in principle, the most secure of all owners with the greatest amount of rights. The estate is unlimited in time; there is no landlord with a superior interest who can reclaim the property or exercise rights over the tenant. There are outside bodies that can exercise power, such a local authorities, with planning powers and compulsory purchase powers. However, on the whole the freeholder is in the most powerful position.

Tenant

The second class of occupier, the tenant or leaseholder has lesser rights than a freeholder but is, nevertheless protected by a strong body of law, the statutory codes, Housing Acts and Landlord and Tenant Acts. For a tenancy to come into existence the following elements must be present:

a) There must be a landlord and tenant

b) There must be exclusive possession;

c) There must be identifiable land

d) The grant must be for a definite period;

e) The lesser must retain a reversion.

The contract of tenancy or lease is usually in writing. A lease exceeding three years must be by deed. Writing is necessary to satisfy section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Section 2 states:

(1) “A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each”.

For any lease to be created there must be separate legal persons capable of granting and receiving a tenancy. The parties to the tenancy need not be individuals, any ‘legal person’ such as a corporate entity can grant or receive a tenancy. A tenancy can also be granted to a group of people as joint tenants. A minor, under 18, is not legally entitled to hold an estate in land. Neither is a body which does not in itself have a legal personality. An owner of land cannot grant a tenancy to himself although a director of a company can be a tenant of that company. The company or partnership has a separate legal identity to the tenant.

Where documents are exchanged each party is required to sign his copy for exchange. In Enfield LBC v Arajah (1995) a signature by one of the tenants did not satisfy the requirement under section 2(1) of the 1989 Act. This provision does not apply to a lease not exceeding 3 years, those covered by the 1925 Law of Property Act.

Exclusive possession

This is a fundamental concept. It is fundamental to any tenancy that the tenant must have been granted a sufficient degree of control over the premises for the tenant to be able to lawfully exclude anyone else from those premises, even the freeholder. The tenant will still have exclusive possession if the landlord retains a restricted right to enter the premises for a specific purpose, as is often the case, such as for inspecting the state of repair.

Exclusive possession is an essential requirement for a lease. If the occupier does not have exclusive possession, the right to use the premises does not amount to a lease, although there may be a lesser right to use.

Definition of land

The premises which are the subject matter of the tenancy must be clearly defined.

Term certain

A lease must be granted for a period that is definite. The beginning and the end must be clearly identifiable or capable of being identified. A lease can therefore be for a few days or a thousand years. The most important thing is to be able to identify clearly the term. One such case which highlights this is where a right of occupation held for the duration of the war was held not to be a lease ( Lace v Chantler 1944, KB 368).

The duration of a term is not always expressed clearly. There is a distinction, which will be discussed further on, between a fixed term, a specific number of years or months and a periodic tenancy which will run from week to week or month to month and can be determined by notice.

The reversion

For a lease to be created it is essential that the term created is less than that held by the landlord. Although, as we have seen the freeholder can grant a term which is of any length as they have an unlimited duration, a leaseholder can also grant a further lease, as long as it is less than the term of their own lease. Therefore, a leaseholder with a 125 year lease can grant a 124 year lease, the main principle being that it is of a lesser term than the head lease. If the leaseholder sought to grant a lease of 125 years or more then he would have no reversion, i.e. the lease would not revert to him. There would be no rights and obligations outstanding and therefore there would be no relationship of landlord and tenant. The person granted an under lease for the same length of time as the head lease would be in effect assigning his lease.

Rent

Rent as such is not a requirement of a lease. Section 205 of the Law of Property Act 1925 defines a lease as a term of years, ‘whether or not at a rent’. One case which highlights this principle is Ashburn Anstalt v Arnold (1988) 2 WLR 706. It was held that an agreement giving an occupier exclusive occupation for a certain term created a tenancy despite the fact that no rent was payable under the agreement. However, it is usual that a rent is paid under a tenancy, particularly periodic tenancies. One famous case which defined the meaning of tenancy was Street v Mountford (1985) AC 809. Whilst rent is not an essential requirement of a tenancy it is essential in order to bring that tenancy within the protection of the Rent Acts.

Types of lease in existence

As we have discussed, the main lease is for a fixed term. At common law, a lease for a fixed period automatically comes to an end when the period expires. No notice is required to determine the lease. there are however, certain statutory modifications to the common law rule relating to residential, business and agricultural leases.

A lease is void if the date of its termination remains uncertain after it has taken effect. It becomes a tenancy at will. It was held in Lace v Chantler (1944) that a lease granted for the duration of the war was void.

Other types of lease, which are not common are leases for life or marriage and tenancies at will and tenancies at sufferance.

Leases for lives or for marriage

A lease can be granted for the life of a lessee. Words which indicate that the lease should be valid so long as the tenant paid the agreed rent were construed in Doe d Warner v Browne (1807) as a lease for life. In Zimbler v Abrahams (1903) the Court of Appeal arrived at the same conclusion. In this case a weekly lease was granted “for as long as the tenant lives and pays the rent regularly”. Whether or not the words used in the agreement will give rise to a lease or tenancy for life or for any other term such as until marriage will depend on the construction.

Tenancy at will or at sufferance

A tenancy at will may be created expressly or by implication at any time. It is the lowest estate known to the law. A tenancy at will can arise when a purchaser goes into possession prior to completion, or where a prospective tenant goes into possession prior to negotiations for a lease.

A tenancy at sufferance arises where a tenant, having entered under an agreed tenancy or lease, holds over after the end of the tenancy or lease. A tenancy at sufferance differs from a trespasser in that the tenant entered the land with the consent of the landlord and from a tenant at will in that no express consent has been given. Under section 18 of the Distress for Rent Act 1737, a tenant who holds over under a periodic tenancy and gives notice to quit but fails to give up possession in accordance with the notice will be liable for double the rent whilst in occupation. In such a case, the tenant is not only a trespasser by reason of his notice but will be treated a such by the landlord. A case that illustrates this is Ballard (Kent) Ltd v Oliver Ashworth (Holdings) Ltd (2000).

Tenancy by Estoppel

Once a lease or tenancy is granted, the general rule is that a tenant is estopped from denying his landlord’s title and the landlord from denying the tenants title. This rule applies even though the landlords title is defective e.g. where the landlord has been a squatter for less than 12 years. Both parties and their successors in title will be estopped from denying the grant was valid to create the lease or tenancy that it purported to grant, hence the doctrine ‘tenancy by estoppel”. Therefore the attributes of a true tenancy arises and the covenants contained in any lease are enforceable by the parties.

Owner Occupation

In the strict sense of the term only a freeholder is an owner-occupier as he or she owns the estate in fee simple absolute. Although it is common to term leaseholders as owner-occupiers this is not strictly true as a relationship exists between the freeholder and leaseholder and the freeholder retains a reversion.

Commonhold

The Commonhold and Leasehold Reform Act, an immensely important Act, which we will discuss in more depth later, introduced a new form of occupation, that of Commonhold. It is now possible for a number of occupants of separate flats to own the freehold of their own property right at the outset and also later through creation of Commonhold where leases cease to exist. Although it is possible for a group of leaseholders to purchase a freehold and form a company to manage it, nevertheless they still remain leaseholders, Commonhold creates the situation whereby all flat dwellers are freeholders, or Commonholders.

Commonholders still face restrictions on their rights to occupy parts of property.

Licensees

When an occupier is granted a licence he or she is not given an estate in land but only permissi...