H has granted, orally, a yearly tenancy to O. A yearly tenancy, i.e. a periodic tenancy, has been recognised as a term of years despite the theoretical difficulty to reconcile it with the common law requirement of prefixed maximum duration meaning that it has the potential to be created and have effect at law (Law of Property Act 1925 s1(1)-(2)).
The general rule as stated in the Law of Property Act 1925 s53(1) insists on signed writing for the creation or disposition of interest in land, s52(1) further deeming void ‘all conveyances of land or of any interest therein (…) unless made by deed’. However as every general rule has its exception, s52(2)(d) excludes from the common regime ‘leases or tenancies not required by law to be made in writing’ which refers to the creation of short-leases (less than 3 years) taking effect in possession, at a market price (s54(2) LPA 1925). Periodic tenancies, which will not necessarily last for longer than 3 years, have been included. The lease must ‘take effect in possession’; that is to say immediately (Long v Tower Hamlets LBC (1998) Ch 197 ; 18 days between the agreement and the tenant getting into possession were held not to be immediate enough). We do not know about the circumstances in which the lease was agreed with Ophelia.
If it was to take effect as soon as agreed, it is a legal lease and therefore need not be registered neither under its own title nor as a notice against the fee simple estate to which it attaches; its effect is to bind any third party, including any transferee of the landlord’s title, as being what used to be called under the 1925 legislation an ‘overriding interest’. Under s29 of the 2002 LRA a registered purchaser of a registered land takes subject to interests falling within the ambit of Schedule 3; Sch 3 paragraph 1 referring to non-registrable leases non exceeding 7 years. There is no requirement of actual occupation, such short leases binds disponees of title even though they could not have known of them although it must be noted that the new landlord need do is serve a proper notice to quit to the tenant if he so wishes to free his land.
In the hypothesis that the lease did not take effect in possession, it follows that, for want of deed, it cannot take effect in law. Equity on the other hand is ready to enforce a properly construed contract for the creation of a lease not merely as a personal right but as a property right ; equity will look at an agreement to convey an estate in land as actually conveying it (‘equity treats as done that which ought to be done’). However such contract requiring itself signed writing (Law of Property (Miscellaneous Provisions) Act 1989 s2(1)) O cannot claim to have an equitable lease in this context.
The answer would not be different had the land been unregistered. A legal tenancy would automatically binds the whole world by virtue of its legal nature while an unconstituted estate contract is still ineffective even in equity.
H further granted a ten-year lease, in another part of his land, to G, in signed writing. A ten-year lease is a term of years, which can be recognised at law if created through a deed
Non-compliance with this precondition, which seems to be the case here, means that the lease can only be equitable, not legal.
However, a specifically enforceable contract to create a legal estate in land can give rise to proprietary rights in equity, following Walsh v Lonsdale itself referring to Parker v Taswell Such a contract is termed an estate contract and defined in the Land Charges Act 1972 s2(4).
The contract must be specifically enforceable; written, signed by both parties (LP(MA) Act 1989 s2(5)), made for valuable consideration and incorporating all the terms expressly agreed to. In R v Tower hamlets LBC, ex p Von Goetz (1999) QB 1019 the Court of Appeal treated a ten years tenancy granted by mere signed writing as a specifically enforceable contract for a term of years and therefore gave effect to it as equitable lease for ten years.
While clearly binding as between the original parties, such interest is liable to be swept away by the transfer of the title of the land to a third party purchaser and therefore requires protection. Following s29 of the 2002 LRA a registered purchaser of a registered estate takes subject to registrable charges or interests duly registered and to interests within the scope of Schedule 3. An estate contract is a registrable interest; it can be protected by the entry of a notice in the Registry against the name of the owner of the fee simple so that it will bind any disponee of the registered estate. Failure to do so will render the estate void as against a third party, unless the tenant was in actual occupation of the land (Sch 3 par 2). Equitable leases have been recognised as sufficiently proprietary by nature to found an overriding interest on the basis of actual occupation. The meaning of the phrase ‘actual occupation’ may differ in accordance with the nature of the premises concerned. We can infer from the facts given (G’s effect were in the land, she was not herself there as being on holiday) that the lease relates to the G’s main residence at the present time (when she is not on holiday) and not to some garage or anything else. It has been held that while actual occupation must be given its natural meaning the 2002 Act clearly requires it to be reasonably discoverable ; the new owner of the land will only be bound by interests that would have been obvious on reasonably inspection of the property. In this case we know that G’s belongings were conspicuously present in the house. This leads us to consider the possibility of actual occupation through a, symbolic, presence of inanimate objects ; this was accepted to some extent in Chhokar v Chhokar (1984) FLR 313. The main obstacle in this would however be length of the time O planned to spend away form the property (2 years); while uninterrupted presence is not necessary, fleeting presence will not be enough. The court, to decide upon the effect of a temporary absence, will look at the length of the absence, its purpose, the symbolic physical evidence of continued residence as well as the intention to return. In Stockholm Finance Ltd v Garden Holdings Inc 1995 NPC 162 a Saudi princess who had not set foot in her London house for over a year was held not to be in actual occupation. However in this case one can readily see substantial differences; it is likely that the residence is G’s main home, her absence is clearly construed as a holiday with the unambiguous intention to return… On the other hand even if she is held to have been in actual occupation it is possible that L’s steps in asking H about her effects were reasonable in the circumstances, if there way no (obvious) way for him to ask her directly. Although it is arguable that the ambiguity of the situation and of Hamlet' answers might have aroused the suspicion of a reasonable purchaser, maybe depending on the way her possessions were arranged in the place.
In the case of an unregistered land an estate contract can be protected only by its registration against the estate owner’s name as a Class C(4) land charge and then will be binding even against equity’s darling, but in the absence of what will be void as against any subsequent purchaser of a legal estate in the land, for money.
Finally H granted P, in a deed, a right of way until such time when P sells his adjoining property. An easement such as a right of way can be created at law (LPA 1925 s1(2)). The necessary formalities (deed) have been complied with in this case. However to be legal, a legal easement must be framed, in terms of duration of the entitlement, in analogy with either a freehold or a leasehold estate; either with no limit of time or for a fixed period. It is arguable that ‘until such time when P sells his property’ complies with this. At any rate whether the right of way is legal or merely equitable, in both cases, to be valid against the third party, the interest must be entered as a notice in relation the servient and the dominant land. Since the 2002 Act, equitable easements no longer rank as overriding interests and expressly granted legal easements being registrable dispositions cannot take effect as overriding interest. However it must be noted that ‘for three years after the Bill is brought into force any legal easement or profit that is not registered will be an overriding interest’; thereafter in must be registered.
If the land was unregistered the legal easement would be binding as against the whole world while an equitable easement would need to be registered as a Class D3 charge or would be void as against a purchaser of a legal estate in the servient land.
Laertes will be bound by Ophelia’s legal lease but not in the event that she merely has an equitable lease. As for Gertrude it will depend whether her estate contract has been registered; in the absence of registration she is unlikely to be able to ascertain any rights through the principle of ‘actual occupation’ while a registered interest will clearly bind Leartes. Finally Polonuis’s legal right of way should be able to override the registered disposition of the esate following a provision by the Law Commission for the duration of three years following the coming into force of the 2002 Act. Without this however (and after 2006) a registered notice of the easement will be required.
WORD COUNT : 1756
MARK OBTAINED : 68
(LPA s205(1)(xxvii)) (termination by effluxion of time Hammersmith and Fulham LBC v Monk (1992) 1 AC 478),
(Hammond v Farrow (1904) 2 KB 332
(LRA 2002 s3 ; leases exceeding 7 years
(Lord Chelmford ; “the intention of the parties having been that there should be a lease the aid of equity is only invoked to carry that intention into effect”)
(Grace Rymer Investments Ltd v Waite 1958 Ch 831)
(Lloyds Bank plc v Rosset 1989 Ch 350 per Mustill LJ)
Williams & Glyn’s Bank Ltd v Boland (1979) Ch 312
(LRA 2002 Sch3 Para 2(c)(i))
Hoggett v Hoggett 1980 39 P&CR 121, Chhokar v Chhokar (1984) FLR 313, time spend at the hospital, week-end to visit friends etc will not interrupt the ‘actual occupation’
LCA 1972 ss2(4) and 3(1))
Lloyds Bank plc v Carrick 1996 4 All ER 630, even if the subsequent purchaser knew about the interest Midland Bank Trust Co Ltd v Green 1981 AC 513
in relation to certainty of term for a legal lease ; ‘so long as the lessee shall use them’ or ‘so long as the company is trading’ were struck down in Congregational Christian Church v Iosefa Tauga 1982 8 Comm Law Bull 129 and Birrell v Carey 1989 58 P & CR 184
See Law Com No 271 (2001) Par 8.67
note : even if they could be overriding, as easement by prescription, implied grant or reservation, or if they had been created before the bringing into force of the 2002 Bill, the right would have to have been easily discoverable.
Law Com No 271 (2001) Par 8.73