RECO3037 Chap.4 Leases, Tenancies and Implied Covenants
Leases, Tenancies and Implied Covenants
Two essentials decide whether there is a lease at all
Most of this chapter turns on a short test. A lease exists when the occupier is given exclusive possession and the term has a certain beginning and a certain or determinable end. Without exclusive possession the occupier is a licensee, however the document is headed, which is the lesson of Street v Mountford.
Without certainty of duration there is no valid lease, as Lace v Chantler showed for a tenancy granted for as long as a war lasted.
Periodic tenancies pass the test because either side can end them by notice.
Form: deeds, the short-lease exception and equity
To create a legal lease a deed is generally needed, but a lease of three years or less that starts at once, is at the best rent and takes no premium is valid however it is made.
Outside that exception, an agreement made for value and fairly dealt with may be treated by equity as an equitable lease under Walsh v Lonsdale, while an oral grant may give only a tenancy at will under section 6(1), which becomes periodic once rent is paid.
A Hong Kong twist completes the picture: an unregistered lease, even by deed, is void against a later purchaser or mortgagee for value unless it is for no more than three years at a rack rent. The chapter also sets out the five kinds of tenancy, from fixed-term and periodic to tenancies at will and at sufferance.
What the law reads into a silent tenancy
The second half covers implied obligations.
A landlord gives quiet enjoyment, which means freedom from substantial, direct and physical interference, and must not derogate from the grant by frustrating the purpose of the letting. A landlord gives no general promise of fitness, with exceptions for furnished dwellings and access ways he retains in a block of flats.
A tenant must use the premises in a tenant-like manner, pay rent and rates, not deny the landlord's title, and deliver the premises up at the end. The chapter closes with the usual express covenants on repair, insurance and assignment, and with the rule that only covenants touching and concerning the land pass to an assignee.
What this chapter covers
- 01
Exclusive possession and the lodger who is only a licensee
- 02
Certainty of duration and Lace v Chantler
- 03
Legal leases, the three-year exception and Walsh v Lonsdale
- 04
Registration under the Land Registration Ordinance
- 05
Fixed-term, periodic, at will and at sufferance tenancies
- 06
Quiet enjoyment and non-derogation from grant
- 07
Repair, fitness and the tenant-like manner
- 08
Express covenants on repair, insurance and assignment
- 09
Privity of contract and privity of estate
Worked example · free
Lease or licence when the document says licence
- 2Explain why the label on the document does not decide the relationship.
- 4Apply exclusive possession and certainty of duration to the facts.
- 2State what Mei holds and what notice she is entitled to.
Key terms
- Exclusive Possession
- The right to occupy premises to the exclusion of everyone else, including the landlord, which distinguishes a tenant from a licensee.
- Periodic Tenancy
- A tenancy for a short period, such as a week or a month, that renews itself automatically until one side gives notice.
- Tenancy at Will
- A tenancy either party may end at any time, which section 6(1) also implies where an oral lease fails for want of a deed.
- Tenancy at Sufferance
- The position of a tenant who stays on after the lease ends without the landlord either agreeing or objecting.
- Quiet Enjoyment
- The landlord's covenant that the tenant's possession will be free from substantial, direct and physical interference by the landlord.
- Privity of Estate
- The relationship between a landlord and an assignee of the lease that lets covenants touching the land bind the assignee.
Leases, Tenancies and Implied Covenants FAQ
Can a landlord avoid a tenancy by calling the agreement a licence?
No. Whether there is a lease depends on what the occupier actually received, not on the heading. If the occupier has exclusive possession for a certain or periodic term, there is a tenancy, as Street v Mountford shows, and labelling it a licence has been tried as a way around rent legislation. A lodger with restricted rights is a genuine licensee.
Does a lease have to be made by deed to be legal?
Generally yes, but there is an exception for a lease of three years or less taking effect in possession at the best rent with no premium, which is valid in any form, even oral. A longer lease not made by deed may be an equitable lease under Walsh v Lonsdale, or only a tenancy at will. Registration in the Land Registry matters separately for binding later buyers.
What does quiet enjoyment actually protect a tenant against?
Substantial interference of a direct and physical kind with the tenant's possession, such as a landlord cutting off the gas or electricity. It is not limited to noise or harassment, but it does not cover mere annoyance or inconvenience. The implied covenant protects against the landlord and those claiming through him; an express one usually also covers someone with a better title.
Exam move
For every tenancy problem, write three lines before anything else: does the occupier have exclusive possession, is the term certain or periodic, and was the formality for that term met. Then list the implied duties the facts engage, landlord's first, tenant's second.
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