70317 Chap.9 Leases, Licences and Leasehold Covenants
Leases, Licences and Leasehold Covenants
Contract and estate
A lease is both a contract between landlord and tenant and a leasehold estate, or demise.
The Week 7 lecture covers four types: the fixed term, the periodic tenancy that rolls over with its rent period, the tenancy at will and the tenancy at sufferance when a tenant holds over without consent.
Lease or licence
Radaich v Smith makes exclusive possession the test, judged by substance rather than label.
A lease also needs a certain term and the right formalities: a short lease in possession under s 23D(2) of the Conveyancing Act, writing, or registration (s 53, Real Property Act) for a legal lease of Torrens land over three years.
The landlord's covenants
A landlord impliedly promises quiet enjoyment and not to derogate from the grant.
Statute implies further covenants, including the power of re-entry in s 85(1)(d) that Week 8 relies on.
What this chapter covers
- 01
Fixed term, periodic, at will and at sufferance
- 02
A lease as contract and demise
- 03
Exclusive possession and Radaich v Smith
- 04
Certainty of term and formalities
- 05
Quiet enjoyment and non-derogation from grant
- 06
Covenants and powers implied by statute
Worked example · free
Classifying a periodic arrangement as a lease or a licence
- 1Rhys has his own keys and the owner may enter only on notice, which points to exclusive possession.
- 1The label "licence" does not decide the question; the substance does (Radaich v Smith).
- 1Weekly rent with no end date creates a periodic tenancy, whose term is certain by reference to the rent period.
- 1It is a weekly periodic lease, ended by notice equal to one rent period, subject to any statute governing residential tenancies.
Key terms
- Periodic Tenancy
- A lease that rolls over from one rent period to the next until ended by notice equal to that period.
- Tenancy At Sufferance
- The position of a tenant who holds over after a lease ends without the landlord's consent.
- Quiet Enjoyment
- The landlord's implied promise that the tenant's possession will not be substantially interfered with.
- Licence
- A personal permission to use land that does not give exclusive possession or an interest in the land.
Leases, Licences and Leasehold Covenants FAQ
Why does it matter whether an arrangement is a lease or a licence?
A lease is an interest in land that can bind someone who later buys the property, and it carries implied covenants such as quiet enjoyment. A licence is ordinarily a personal permission that does not bind a purchaser. Both tutorial practice problems for leases turn on this distinction.
What does quiet enjoyment mean in a lease?
It is the landlord's implied promise that the tenant's possession will not be substantially interfered with by the landlord or anyone claiming under the landlord. Quiet means undisturbed rather than silent. Aussie Traveller v Marklea, an asterisked case, and Southwark v Mills show where the line falls.
What is a tenancy at will?
It arises when someone occupies land as a tenant, with the owner's consent, on terms that either side may end at any time; the lecture's example is a person who enters possession before a lease starts. The occupier pays an occupation fee rather than rent, as with a tenancy at sufferance.
When can a lease be legal without registration?
A lease of three years or less that takes effect in possession can be legal without writing under s 23D(2) of the Conveyancing Act. A longer lease of Torrens land must be registered to be legal, and if it is not, it may still be equitable through writing, the doctrine in Walsh v Lonsdale or part performance.
Exam move
Make a list of the indicators that point towards and away from exclusive possession, then test it on both Week 7 tutorial problems. Learn the formalities by length: s 23D(2) for short leases in possession, s 53 registration for longer leases of Torrens land. Finish by listing the landlord's covenants and, for each tutorial breach, which covenant it engages and who caused the interference.
Take the three-storey building problem from Tutorial 7 and list every interference it describes, matching each to quiet enjoyment, non-derogation or a breach by another tenant.
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