Key Requirements for a Valid Lease in UK Property Law

Exclusive Possession and the Bruton Tenancy

In the case of Bruton v London and Quadrant Housing Trust, a non-proprietary lease was granted based on exclusive possession, even though the landlord did not have a legal estate in the land and was only a licensee. Martin Dixon, in his evaluation of Bruton, stated that a non-proprietary lease based on exclusive possession is actually a licence. However, the House of Lords was trying to protect the occupiers under a lease, therefore establishing this concept.

Nonetheless, despite having exclusive possession, many still do not acquire a lease in situations such as:

• Family circumstances, due to the absence of an intention to create legal relations.
• Employees who only have exclusive possession as a requirement of their employment contracts.
• Charitable organisations where exclusive possession may arise only due to a person's homelessness.

The Role of Rent in Establishing a Lease

Rent is the third requirement of a lease. In Ashburn Anstalt v Arnold, it was stated that the payment of rent is considered consideration, which must be sufficient but need not be adequate. As per Thomas v Thomas, rent that is sufficient will be accepted. Therefore, it is clear that the courts are flexible as to what amounts to rent; as such, anything of economic value would suffice. However, Section 54(2) of the Law of Property Act 1925, which applies to leases of three years or less, requires the payment of the 'best rent', which is market rent, as per Fitzkriston v Panayi. Rent is also important to determine the kind of tenancy, e.g., a fixed-term or periodic tenancy. A periodic tenancy is determined by how much rent is paid and the frequency of payment.

Formalities for a Legally Valid Lease

In conclusion, for an occupier to have a tenancy, they must satisfy the requirements laid out by Lord Templeman. Even if these essentials are satisfied, the formalities for a valid lease must also be complied with. The registration requirements depend on the length of the lease:

• A lease for a term of more than seven years requires substantive registration under Section 27 of the Land Registration Act 2002.
• A lease for a term of less than seven years can be protected by entering a notice on the register, as per Section 32 of the Act.
• A lease for a term of three years or less does not require a notice under Section 33, as it can be an overriding interest.

An interest that cannot be entered as a notice may need to be protected by a restriction.