Priority of Unregistered Leasehold Interests and Repair Duties Case Study

Introduction: Legal Implications of Leasehold Priority and Landlord Repair Duties

This statement takes into account the nature of Amira and John's interest in the property, their right to remain in the profession, and Lena's repair responsibilities. It analyzes the existence of leases or licenses, the application of priority rules under the Land Registration Act 2002, and implied obligations concerning repairs. It will also consider additional nuances regarding term safety and the concept of termination in lease agreements.

Q1. The Nature of Amira and John's Interest

The starting point is to determine whether Amira and John have a lease or license. This will have a significant impact on Lena's ownership and her position as a new fr??holder.

License vs Lease

A landmark case was Street vs Mountford [1985], which held that a contract that confers exclusive possession for some time for a rental fee is prima facie a lease, regardless of how it is expressed. The court held that it was not a license.

The court will evaluate the true content of the agreement. Here, Amira and John's 'licence agreement' grants her exclusive possession of the property for five years at a monthly rent of £600 (Cantatore, Galloway, & Parsons, 2020). This suggests a lease based on Street vs Mountford. The right to introduce other residents does not necessarily negate exclusivity [Aslan vs Murphy 1989].

Overall, despite its , this agreement has the characteristics of a rental agreement. However, Street vs Mountford raised concerns that uncertainty regarding the distinction between leases and licenses could affect real estate transactions involving tenants [Low 2012]. This led to changes in the law.

Specification of Premises

Section 54(2) of the Property Act 1925 requires the rental agreement to specify the building to be demolished. In Prudential Guarantee v London Survival Society [1992], an agreement as to 'premises to be used' was found to be insufficient to constitute a legally valid rental agreement.

Here, the property itself is not mentioned in the contract between Amira and John. This probably precludes the conclusion of a legal lease under s54 (2).

However, in Antoniadis v Villiers [1990] it was held that an agreement relating to premises 'currently occupied by you' was valid as the current use sufficiently identified the property (Gianoli, 2022). Amira and John's positions seem similar.

Overall, given the Antoniadis approach, the lack of specification does not mean that statutory leases are definitively excluded.

Term of Years

In the case of a statutory lease, section 52(1) of LPA 1925 requires that its period be ascertainable. In Prudential, there was no statutory tenancy agreement as the term of the contract was indefinite.

Amira and John's five-year term is verifiable and complies with s52(1). The agreement provides certainty by setting out precise start and end dates [Southwark LBC v Mills 1999].

Rent

The rent must also be ascertainable under section 52(2) of LPA 1925. Uncertainty about fluctuating utility bills can lead to rent uncertainty [Berisford v Mexfield Housing 2011].

However, the fixed rent was considered sufficient by Prudential, even though the additional costs were not specified (Alqodsi, 2021). Here the rent is explicitly set at £600 pm. There is absolute certainty as to rent, indicating legal terminology [Kenny v Preen 1963].

Creation of Legal Interest

Therefore, the contract between Amira and John, although marked as a license, fulfils the main requirements for entering into a legally valid rental contract where they have a leasehold interest. The absence of accurate markings of the premises does not conclusively disprove this. Because their existing usage may identify assets [Antoniades].

Get Extra 10% OFF on your WhatsApp order!

use my discount

However, for the rental agreement to be binding on Reena, formality and registration requirements must also be considered.

Formalities for the Creation of Legal Lease

Section 52(1) of the LPA 1925 provides that a three-year lease must be entered into by deed to create a legal interest. Amira and John's five-year rental agreement is not a deed. Therefore, no legal interest arises [Bruton v London and Quadrant Housing Trust].

However, there is still a fair rental agreement binding Tom as the landlord. Although this would not normally be binding on third parties such as Leena, who acquired the title of Tom [Pilcher vs Rollins 1872], the lease registration rules provided Amira and John with an exceptional legal requirement as tenants in equity giving protection.

Registration Formalities

The rental agreement between Amira and John, signed in September 2019, predates Reena's acquisition of the property from Tom. Section 27 of the Land Registration Act 2002 envisages that registered legal interests have priority, while section 28 provides that all unregistered interests have priority following Schedule 3 it has been.

Schedule 3(1)(b) protects unregistered interests and expires if less than 7 years remain. Clause 29 provides that if such a lease comes into force, it will be subject to the prior rights set out in Schedule 3 (Isaac Christopher, 2023). Amira and John's 5-year lease from 2019 falls under Schedule 3.

Therefore, Amira and John's previous equitable lease takes precedence over Lena's property rights. No registration was necessary to protect her rights from later purchasers like Lina.

However, several issues related to redundancy need to be considered before confirming whether Amira and John can remain in their jobs.

Notice

When Leena viewed the property before purchasing, Tom shared that the items inside belonged to a former tenant. This misrepresentation could prevent Leena from being bound by Amira and John's rental agreement under her termination doctrine.

Actual and Constructive Notice

If a subsequent purchaser becomes aware of the interest that was not previously declared, he may still be bound by that interest [Epe vs Thompson]. Actual termination occurs when the buyer has first-hand knowledge of the prior interest. Constructive notice covers where a reasonable inspection would have revealed this.

Here, due to Tom's misrepresentation and her temporary absence, Leena had no actual or constructive knowledge of Amira and John's employment. But she can't do it unless Lina doesn't know.

Overriding Interests

Schedule 3 effectively turns a short-term lease into a blanket interest that is binding on the buyer, irrespective of termination under s29 (Halonen-Manner, 2020). The purpose is to protect the tenant in possession [Chokal vs Chokal]. Amira and John have a Schedule 3 rental agreement, so Reena will be bound regardless of Tom's lies about his occupation.

Summary of Nature of Interest

In summary, Amira and John have a five-year equitable lease that grants them exclusive ownership and the right to remain in the profession. This takes precedence over Lena's title to the property under Schedule 3 LRA 2002, even if it is not registered. As the new landlord, Reena will be honouring her rental agreement.

Q2. Reena's Liability: Amrita and John's Entitlement to Remain

Amira and John have a parent lease, so Reena cannot terminate them just because she acquired the property in disregard of their interests.

They have the right to continue their employment until the rental agreement expires in September 2024 (Hebib, Rami?, & Bili?, 2020). Lina's introduction of other residents, while potentially inconvenient, does not deprive Amira and John of the fundamental right to exclusive possession and quiet enjoyment conferred by the lease [Aslan vs Murphy].

Reena's Liability for Repairs

Lena's repair responsibilities as a landlord depend on Amira and John's interpretation of the terms of the lease. This requires an analysis of the obligations arising under common law and statutes relating to forfeiture.

Implied Terms Concerning Repair

The agreement between Amira and John does not contain any express terms regarding repairs. However, lease agreements contain common law obligations. In Liverpool CC v Irwin [1977] the House of Lords accepted that landlords have a responsibility to repair the structure and exterior (Munasinghe, et al. 2022). This common law obligation prevents landlords from allowing the property to deteriorate during the lease term.

Therefore, since Amira and John's lease does not provide for repairs, Leena is prima facie responsible for the structural deterioration under Irwin. However, the scope of this implied obligation depends on a correct interpretation of the parties' intentions.

Construction of Lease Terms

Although the tenant expressly provides for the tenant to carry out internal repairs, the landlord remains liable for external and structural damage under the Irwin decision [Ravenft Properti?s Ltd vs Davstone (Holdings) Ltd. However, implied obligations can be excluded if it can be shown that the lease agreement is consistent with the parties' intentions. Pekar vs Seaford Court Ltd [2017] A short-term lease with extensive repair obligations on the part of the tenant was interpreted to reflect the parties' intention to exclude external repair obligations on the part of the landlord (Fuentes-Jiménez, & Babie, 2021). By emphasizing the tenant's obligations, the implied term became invalid.

Here, the informal agreement between Amira and John does not contain any information regarding repairs. Contrary to Peaker's argument, there is no basis for concluding that the parties have relieved the landlord of all repair obligations. The absence of any provision suggests that the Irwin Tariff applies.

Statutory Implied Terms

Section 11 of the Landlord and Tenant Act 1985 also requires landlords to maintain the structure and appearance of rental properties. This made the Irwin Principles legally enforceable.

As the roof is part of the structure of the property, S11 LTA 1985 imposes liability on Reena for these repairs (Quaye, 2020). There is no reason why she can back out of this promise.

Summary of Repairs

To summarize, Leena is Amira and John's landlord and is responsible for repairing the roof. This liability arises from the common law under Irwin and the obligations set out by section 11 of her LTA 1985 unless the lease contains a provision to the contrary. The absence of an express provision suggests that the rental agreement should be interpreted as upholding these implied obligations to Leena.

Conclusion

In conclusion, Amira and John have entered into an overriding equitable tenancy agreement granting exclusive possession until September 2024, which binds Reena under the LRA 2002. As her landlord, Leena is responsible for repairing the structural roof due to an implied obligation in Amira and John's lease. Just because she acquired her property without notice, she cannot terminate it.

References

Journals

• Alqodsi, E. M. (2021). Analyzing the Implementation of Usufruct Rights and Obligations in the UAE Civil Transactions Law. International Journal of Criminal Justice Sciences, 16(2). Retrieved From: https://ijcjs.com/menu-script/index.php/ijcjs/article/download/61/18 [Retrieved On: 24.12.2023]
• Cantatore, F., Galloway, K., & Parsons, L. (2020). Fractionalised land interests: More questions than answers. Australian Property Law Journal, 28(2), 39-58. Retrieved From: https://research.bond.edu.au/files/36486972/Fractionalised_land_interests_More_questions_than_answers.pdf [Retrieved On: 24.12.2023]
• Fuentes-Jiménez, M. A., & Babie, P. (2021). The residential tenancy agreement as an exception to the indefeasibility of title. Retrieved From: https://digital.library.adelaide.edu.au/dspace/bitstream/2440/131047/3/hdl_131047.pdf [Retrieved On: 24.12.2023]
• Gianoli, D. M. (2022). THE ROLE OF PUBLIC REGISTRY SYSTEMS IN RISK ASSESSMENT: A COMPARATIVE ANALYSIS OF THE PERSONAL PROPERTY SECURITY ACT AND UNIFORM COMMERCIAL CODE ARTICLE 9 (Doctoral dissertation, University of Saskatchewan). Retrieved From: https://harvest.usask.ca/bitstream/handle/10388/13947/GIANOLI-THESIS-2022.pdf?sequence=1 [Retrieved On: 24.12.2023]
• Halonen-Manner, S. (2020). Cape Town Convention: a platform to facilitate global aircraft financing?: a case study on the effectiveness of exercising the Irrevocable Deregistration and Export Request Authorization in connection with default of lease payments on aircraft objectives by the debtor in India. Retrieved From: https://helda.helsinki.fi/bitstream/handle/10138/324546/Halonen-Manner_Susanna_thesis_2020.pdf?sequence=2 [Retrieved On: 24.12.2023]
• Hebib, M., Rami?, L., & Bili?, E. (2020). HOUSING MARKET IN BOSNIA AND HERZEGOVINA. Retrieved From: http://censorba.org/wp-content/uploads/2021/01/HOUSING-MARKET_1stversion.pdf [Retrieved On: 24.12.2023]
• Isaac Christopher, L. (2023). Matriculation Oral Examination Guide: Land Transactions in Uganda. Volume 1. SuiGeneris Publishing House. Retrieved From: https://pub.nkumbauniversity.ac.ug/jspui/bitstream/123456789/985/1/MATRICULATION_EXAM_GUIDE_FOR_LAND_TRANSACTIONS_IN_UGANDA_BY_LUBOGO.pdf [Retrieved On: 24.12.2023]
• Munasinghe, L. M., Gunawardhana, T., Wickramaarachchi, N. C., & Ariyawansa, R. G. (2022). Regulation of peer-to-peer tourist accommodation services: lessons from Asia pacific countries for Sri Lanka. Revista Produção e Desenvolvimento, 8(1), e593-e593. Retrieved From: https://revistas.cefet-rj.br/index.php/producaoedesenvolvimento/article/download/593/430 [Retrieved On: 24.12.2023]
• Quaye, B. A. (2020). Factors impacting on effective implementation of land title registration–a perspective from Ghana. Journal of Planning and Land Management, 1(2), 23-37. Retrieved From: https://sddubidsjplm.com/journal/index.php/jplm/article/download/25/12 [Retrieved On: 24.12.2023]