Free Law Dissertations - 3.the Owner Of The Land Has No Power To Grant A Tenancy. This Exception From
3.The owner of the land has no power to grant a tenancy.
This exception from Street v Mountford is now obsolete as a result of the case of Bruton v London & Quadrant Housing Trust which effectively created a hybrid lease that will allow a licensee to grant a lease but with the result that the grantee derives no proprietary interest. This case seriously blurred the boundaries between the lease and the licence but the relevant factor here is that this kind of blurring goes on all the time. However the resulting potential futility of establishing a touchstone test is saved by the heavy emphasis of the courts on factual circumstances to qualify the lease characteristics of exclusive possession and periodic term certain.
The impact on third parties
The fact that only leases create proprietary rights means that the distinction between licences and leases is particularly important to third parties.
1.New Purchasers
For new proprietors the impact can be seen in the case of Ashburn Anstalt v Arnold in which Fox LJ stated that:
A mere contractual licence to occupy land is not binding on a purchaser of the land even though he has notice of the licence.
Leases are binding on third parties but the crucial fact here is that a judicial decision to designate a licence as a lease is in fact a rectification from the above mentioned sham of statutory obligation evasion and forms an affirmation of landlord obligations that ought to have existed in the first place. It is also trite to conclude on this point that the social agenda of the courts is to protect the proprietary interests of the occupier as opposed to the financial interests of a purchaser who would otherwise stand to gain from the clever, evasion tactics of the previous owner.
2.3rd Party Tenants
Third party tenancy interests are largely limited to statute and consist of succession rights for certain types of relationships and rights of a spouse to the matrimonial home under the Family Law Act 1996. This group is therefore a core statutory extension of the group of tenants that are contracted under false labels.
Conclusion
There is no failure to create a stonetest to distinguish leases and licences. Instead it is conceded by the courts that the fundamental characteristics of a lease, namely exclusive possession and the fixed, periodic term certain, are starting points that are subject to the conditions of the facts of each case.
Therefore, on the one hand, I do not agree that there is failing to take into consideration the need to accommodate short term or informal arrangements as they are integral to the factual analysis of disputed arrangements where this starting point of exclusive possession has been established.
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