Leases
Introduction
Definition
A lease is an estate in land of defined duration. It is capable of being a legal estate under s.1(1)(b) of the Law of Property Act 1925 provided that it is a ‘term of years absolute’ (s.205) and is created in the correct manner (i.e. if exceeding three years by deed (ss.52 and 54). If not created by deed, the general rule is that the lease will be equitable in nature. A lease will usually carry with it an estate, but this is not necessarily the case: Bruton v London & Quadrant Housing Trust.
Requirements for a lease
There are three essential requirements where the first two of these requirements were confirmed by the House of Lords in Street v Mountford where Lord Templeman expressed ‘must be granted exclusive possession for a fixed or periodic term certain in consideration of a premium or periodical payments’ however this consideration was not necessary, as could be one peppercorn a year: Ashburn Anstalt v Arnold 1. The estate must be of a duration permitted for a leasehold estate; 2. The grant must give exclusive possession; and 3. The grant must have the correct formalities
Duration of Leases
Fixed Term Leases
The vital feature of a fixed term lease is that there is a fixed maximum duration such as 1month, 3 years, 99 years, 999 years etc. It is perfectly possible, indeed normal, for a least to contain a forfeiture clause under which the landlord can terminate the lease prematurely if the tenant breaks any of the terms of the lease. Some fixed term leases also contain a ‘break clause’ which can be invoked by the tenant. Under such a clause the tenant has a right unilaterally to terminate the lease before it has run its full course.
Therefore, with fixed term leases, there is no problem with certainty because the term is expressly defined (e.g. 99 years). However, if it is impossible to calculate the duration