RECO3037 Chap.5 Determination of Leases and Licences
Determination of Leases and Licences
Seven ways a lease comes to an end
A lease can end because its term runs out, because a party gives notice to quit, because the landlord forfeits it for a breach, because the parties agree to surrender it, because lease and reversion merge in one person, because the landlord accepts the tenant's repudiation, or, very rarely, because the contract is frustrated.
Each has its own conditions, and the chapter treats them in that order, giving most space to forfeiture because it is where landlords most often lose rights they thought they had.
Notice, forfeiture and waiver
Notice periods come from the lease, then from the common law, then from the Landlord and Tenant (Consolidation) Ordinance, which sets a minimum of six months for business tenancies.
A yearly tenancy at common law needs half a year's notice ending at the end of a tenancy year. Forfeiture needs a proviso for re-entry and a decision by the landlord to use it, and the lease ends only when the landlord starts proceedings or re-enters, subject to the court's power to relieve the tenant.
The landlord loses the right if he waives the breach, which the tenant proves by showing knowledge, an unequivocal act such as accepting rent due after the breach, and an act explicable only by the lease continuing.
Estoppel is the stronger defence.
Surrender, frustration and the four kinds of licence
Surrender needs both sides: handing over the keys does not end a tenancy until the landlord accepts, usually shown by reletting, and changing the locks or attempting to relet is not enough. Frustration needs a catastrophe that makes use impossible, not merely harder.
The chapter ends with licences, from the bare licence that can be revoked on reasonable notice, through licences coupled with an interest and contractual licences, to licences protected by estoppel where a promise led someone to spend money. Whether a contractual licence binds a purchaser is unsettled, and the chapter shows how to present both views.
What this chapter covers
- 01
Expiry by effluxion of time
- 02
Notice to quit at common law and under statute
- 03
The proviso for re-entry and forfeiture
- 04
Waiver: knowledge, an act and attribution
- 05
Estoppel as the stronger defence
- 06
Surrender by agreement and by operation of law
- 07
Merger, repudiation and frustration
- 08
Bare, contractual and estoppel licences
Worked example · free
Has a landlord waived the right to forfeit
- 2Identify the right to forfeit and the defence of waiver.
- 5Apply knowledge, an unequivocal act and attribution to the facts.
- 2State the result and the limit on what the waiver covers.
Key terms
- Effluxion of Time
- The automatic ending of a fixed-term lease when its stated period expires.
- Notice to Quit
- The notice that ends a periodic tenancy, or a fixed term containing a break clause, at the proper date.
- Proviso for Re-entry
- The lease clause entitling a landlord, but not obliging him, to re-enter and end the lease when the tenant breaks a covenant.
- Waiver
- Loss of the right to forfeit for a known breach through an unequivocal act, such as accepting later rent, that treats the lease as continuing.
- Surrender
- The ending of a tenancy by the tenant giving it up and the landlord accepting it, either expressly or by conduct.
- Mesne Profits
- Damages a landlord may recover for the tenant's occupation between forfeiture and delivery of possession.
- Bare Licence
- A permission given without consideration, revocable at any time on reasonable notice.
Determination of Leases and Licences FAQ
Does accepting rent after a breach stop a landlord from forfeiting?
It usually does for that breach. Waiver needs the landlord to know of the breach and then do an unequivocal act that treats the lease as continuing, and accepting rent that fell due after the breach is the classic example. The waiver covers only breaches he knew about when he acted, so it does not protect the tenant against a later breach.
If I hand back the keys and move out, has my tenancy ended?
Not necessarily. Surrender needs the landlord's consent, and taking the keys is not enough proof of it on its own. The surrender is complete when the landlord accepts, typically by reletting. Courts have found no surrender where the landlord only changed the locks, tried and failed to relet, or entered to do repairs, so the tenant may remain liable for rent.
How much notice is needed to end a periodic tenancy?
First check the lease, which may set its own period. Otherwise, at common law a yearly tenancy needs at least half a year's notice ending at the end of a completed year, and a shorter periodic tenancy needs a full period's notice ending at the end of a period. The Landlord and Tenant (Consolidation) Ordinance overrides this for business tenancies with a six-month minimum.
Exam move
Draw the forfeiture path as five boxes, breach, proviso, election, proceedings, end of lease, and attach waiver, estoppel and relief to the boxes where they act. Then work one dated scenario through it, writing the date beside each box.
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