9 – LEASES and LICENCES
Leases
Introduction
Legal Nature of Leases
Leases were originally merely a personal action against the lessor (not an estate in land), but LPA 1925 s
1 confirms “a term of years absolute” is a legal estate in land. Leases can be dealt with as property.
Leases are a continuing contractual relationship between landlord and tenant – there are rights and
obligations outstanding on both sides. This means leases are simultaneously property and contracts.
We cannot simply treat leases as contracts – eg. there may be issues where the landlord and
tenant are assignees, meaning no contract is between them.
Leaseholders may be protected via statute.
During 20th c, statutory protections were extensive (Rent Act 1977 imposed rent control, often
below market; sometimes tenants were given security of tenure and rights of succession for
their heirs to take over the will without contractual provision).
However, Housing Acts 1988 and 1996 phased out these protections. There is still statutory
control for public tenancies. Even though tenants are no longer so well-protected, the fact that
they were has impacted the law on leases (parties developed avenues to avoid granting leases).
Both the leasehold title and freehold title can be sold during the lease.
Varieties of Leasehold Arrangements
Leases can vary by length of term (can be hours or years), whether rent or a premium is payable by the
tenant, the context (residential, business, agricultural), the covenants in the lease, and the extent of
property included in the lease (can be a room or several acres).
Policy concerns
1. Justification for leases as proprietary: leases are fragmented ownership (no one fully owns
during lease), which can be problematic for marketability; however, because leases expire
eventually, the landlord’s interest can be sold during the lease, and the landlord gains rental
income for the duration, it is more useful to give leases proprietary status
2. Tension between the lease as contract and property
3. Should the law seek to control the landlord-tenant relationship? Almost 1/3 of the population in
the UK rent their homes, which means we need a good market to provide choice for renters,
meet social need for those who can’t afford to buy, increase flexibility in accommodation and
Leases
Introduction
Legal Nature of Leases
Leases were originally merely a personal action against the lessor (not an estate in land), but LPA 1925 s
1 confirms “a term of years absolute” is a legal estate in land. Leases can be dealt with as property.
Leases are a continuing contractual relationship between landlord and tenant – there are rights and
obligations outstanding on both sides. This means leases are simultaneously property and contracts.
We cannot simply treat leases as contracts – eg. there may be issues where the landlord and
tenant are assignees, meaning no contract is between them.
Leaseholders may be protected via statute.
During 20th c, statutory protections were extensive (Rent Act 1977 imposed rent control, often
below market; sometimes tenants were given security of tenure and rights of succession for
their heirs to take over the will without contractual provision).
However, Housing Acts 1988 and 1996 phased out these protections. There is still statutory
control for public tenancies. Even though tenants are no longer so well-protected, the fact that
they were has impacted the law on leases (parties developed avenues to avoid granting leases).
Both the leasehold title and freehold title can be sold during the lease.
Varieties of Leasehold Arrangements
Leases can vary by length of term (can be hours or years), whether rent or a premium is payable by the
tenant, the context (residential, business, agricultural), the covenants in the lease, and the extent of
property included in the lease (can be a room or several acres).
Policy concerns
1. Justification for leases as proprietary: leases are fragmented ownership (no one fully owns
during lease), which can be problematic for marketability; however, because leases expire
eventually, the landlord’s interest can be sold during the lease, and the landlord gains rental
income for the duration, it is more useful to give leases proprietary status
2. Tension between the lease as contract and property
3. Should the law seek to control the landlord-tenant relationship? Almost 1/3 of the population in
the UK rent their homes, which means we need a good market to provide choice for renters,
meet social need for those who can’t afford to buy, increase flexibility in accommodation and
