Экзамен зачет учебный год 2023 / Sparkes, A New Land Law

Assurance,150 a single term to endure until land was required for road widening was held to be uncertain. Entry under a void tenancy, coupled with the payment and acceptance of a yearly rent meant that the tenant obtained a yearly tenancy. It was not permissible to imply a provision that this yearly tenancy could only be terminated when the land was required for the purposes of road widening. Like any other yearly tenancy, it could be terminated by one half year’s notice expiring at the end of any period of the tenancy.

4.Repugnancy

[25.22] An express or implied term of a periodic tenancy may be rejected because of an inconsistency with the nature of the periodic tenancy of which it forms a part. Old law prevented any term relating to any time after the end of the very first period, for example, a covenant to paint every three years,151 or to give two years notice to quit,152 or to do substantial repairs.153 Modern law restricts repugnancy to the future, allowing terms to be enforced which apply to a time when the tenant has actually been in occupation.154 Notice provisions limit termination in the future, but illogically a tenancy can restrict service of notice for a fixed period of time such as five years.155 A clause becomes repugnant if the landlord can never terminate the lease.156

E. FORMALITY FOR LEGAL LEASES

1.Legal leases by deed

[25.23] Leases are “conveyances “157 which section 52(1) of the Law of Property Act 1925158 requires to be by deed, unless they fall into the short lease exemption considered below. An informal lease is “void for the purpose of conveying or creating a legal estate”.159 Formality is also required for any legal assignment of any existing legal lease, whether it is long or short.160

150Prudential Assurance [1992] 2 AC 386, 394F, Lord Templeman; Onyx (UK) v. Beard [1996] EGCS 55, Ch D. It is odd that a licence may be created for an uncertain period: P Sparkes (1993) 109 LQR 93, 107–110.

151Tooker v. Smith (1857) 1 H & N 732, 156 ER 1396.

152Pinero v. Judson (1829) 6 Bing 206, 130 ER 1259.

153Doe d Thomson v. Amey (1840) 22 Ad & El 476, 479, 113 ER 892.

154Pistor v. Cater (1842) 9 M & W 315, 152 ER 134; Adams v. Clutterbuck (1883) 10 QBD 403, 406.

155Prudential [1992] 2 AC 386, 395A, Lord Templeman; Breams Property Investment Co v. Stroulger

[1948] 2 KB 1; DC Potter (1948) 11 MLR 342.

156Centaploy v. Matlodge [1974] Ch 1, Whitford J; Re Midland Railway Co’s Agreement [1971] Ch 725, 733F, Russell LJ.

157Including leases of intangible rights such as easements: Brown v. Peto [1900] 2 QB 653, CA.

158Replacing Statute of Frauds 1677 (writing) and Real Property Act 1845 s 3 (deed). For deeds see above [7] and short leases see below [25.24].

159For the effect in equity see above [24.05], below [25.29ff].

160Botting v. Martin (1808) 1 Camp 317, 170 ER 970; Crago v. Julian [1992] 1 WLR 372, CA; P Sparkes [1992] Conv 375.

2.Informal short-term leases

[25.24] Short leases are exempted from the need for a full formality by the Law of Property Act 1925 in these terms:

“Nothing [in sections 40 to 54] shall affect the creation by parol of leases (1) taking effect in possession, (2) for a term not exceeding three years (whether or not the lessee is given power to extend the term) (3) at the best rent which can reasonably be obtained without taking a fine.”161

Creation can be purely orally162 though full formality is required to transfer any existing lease.163

(1) Best rent

[25.25] The modern requirement is that an informal tenancy must be at the best rent, so that a deed is required for any lease which reserves a fine.164

(2) Term not exceeding three years

[25.26] A legal lease for three years certain can be written or oral, but a legal lease for three years and one week certain must be by deed.165 The maximum duration determines the necessary formality.166 Rights for the landlord to forfeit the lease, for the tenant to extend it,167 or for either side to break it168 are ignored.

A legal tenancy from leap year to leap year would require full formalities, but periodic tenancies will generally qualify for informal creation169 – whether yearly, monthly,170 or weekly.171 This is despite the obvious fact that [a periodic] tenancy may go on for a great number of years.172 The touchstone is the length of the lease after each party has tried to terminate it. Despite Ex p Voisey,173 a deed should be required if either party is compellable past three years.174

161 S 54(2) (numbering supplied); it re-enacted in a different form the Statute of Frauds 1677 s 2; P Sparkes [1992] Conv 252, 337; JE Adams [2001] Conv 213.

162An oral lease suffers certain disadvantages: Rye v. Rye [1962] AC 496, HL.

163Botting v. Martin (1808) 1 Camp 317, 170 ER 970; Crago v. Julian [1992] 1 WLR 372, CA.

164Compare City Permanent BS v. Miller [1952] Ch 840, 846 (original overriding interest).

165Miller as above, CA.

166Not the minimum period: Hammond v. Farrow [1904] 2 KB 332, 335, Wills J; explained in Kushner v. Law Society [1952] 1 KB 264, 273, Goddard LCJ.

167LPA 1925 s 54(2); Hand v. Hall (1877) 2 Ex D 355; Gray v. Spyer [1922] 2 Ch 22, 38–39; Rollason v. Leon (1861) 7 H & N 73, 158 ER 398.

168Kushner at 274; query both Ex p Voisey (1882) 21 Ch D 442, 456, 459, 464, and Hammond v. Farrow [1904] 2 KB 332, 335, Lord Alverstone CJ.

169Westminster CC v. Peart (1991) 24 HLR 389, CA (public sector secure tenancy).

170Or a tenancy of indefinite duration terminable by a month’s notice: Doe d Lansdell v. Gower (1851) 17 QB 589, 117 ER 1406.

171Hammond v. Farrow [1904] 2 KB 332 (weekly tenancy for less than three months for rating purposes).

172Kushner [1952] 1 KB 264, 274, Lord Goddard CJ.

173(1882) 21 Ch D 442, 456, Jessel MR, 458, Brett LJ, 464 Cotton LJ (the lender/landlord had not executed the mortgage deed).

174Breams Property Investment Co v. Stroulger [1948] 2 KB 1, 7, Scott LJ (landlord restricted for exactly 3 years).

(3) Taking effect in possession

[25.27] This was a new requirement in 1925.175 In consequence a term for one month arising in one year’s time, or one day’s time, or on a contingency, cannot be legal without a deed176 as Long v. Tower Hamlets LBC177 demonstrates: a letter written on September 4th granting a tenancy from September 29th was ineffective at law. This need not matter. After 1989 contracts for a short lease do not require writing,178 so a lease to start in the future may operate as an informal contract for the creation of a legal lease.

3.Transfer of short tenancies

[25.28] Transfer of an informal short lease requires a deed. In Crago v. Julian179 the landlord was seeking possession of a flat against Mrs Julian. Her husband had rented the flat in 1966 but, when they divorced in 1982, he gave a written undertaking to do everything necessary to transfer to the tenancy of the flat to Mrs Julian. She stayed in the flat until 1987 when, having asked the managing agents to change the name shown in the rent book, she was asked to leave. The weekly tenancy of Mrs Julian’s former husband was validly terminated by notice to quit, and he had no right to claim security of tenure as he was no longer resident in the flat. Mrs Julian had to prove that she had taken an assignment (and, the court assumed, a legal assignment180) of the tenancy before its termination.

Nicholls V-C accepted the traditional view that a deed was required for a legal assignment of an parol lease and even an equitable assignment needs writing.181 The exemption for short legal leases is limited to parol creation.

F. EQUITABLE LEASES

1.Equitable leases by contract

[25.29] A person with a contractual right to an interest in land can obtain a decree of specific performance which enables him to get at the land itself, a right which confers

175Pre-1926 law was better, because it allowed one period of three years from the first grant to the end of the lease, and the date on which possession was taken did not matter: Statute of Frauds 1677 s 2; Wood

v.Beard (1876) 2 Ex D 30, 34; Rawlins v. Turner (1699) Ld Raym 736, 93 ER 760; Ryley v. Hicks (1725) 1 Stra 651, 91 ER 1392; Foster v. Reeves [1892] 2 QB 255, CA; query the decision in Ex p Voisey (1882) 21 Ch D 442, 464, Cotton LJ.

176Bowes v. East London Waterworks Co (1821) Jacob 324, 330, 37 ER 873, Lord Eldon (lease on 20th to take effect on 25th is in reversion); Ex p Voisey would not be legal today; Bush Transport v. Nelson [1987] 1 EGLR 71, 73.

177[1998] Ch 197, 210–219, James Munby QC; S Bright [1998] Conv 229. Hence the squatter was not hindered in his claim to adverse possesson by the status of being a legal tenant.

178LP (MP) A 1989 s 2(5)(a); Target Holdings v. Priestley (2000) 79 P & CR 305, Ch D. This creates too wide a scope for future incumbrances. Protective registration is required.

179[1992] 1 WLR 372; P Sparkes [1992] Conv 375; G Battersby (1995) 58 MLR 637; Camden LBC v. Alexandrou (No 2) (1998) 30 HLR 534, CA (informal surrender may have same practical effect, though it requires the consent of the landlord).

180Presumably the undertaking in the divorce petition was a future promise to assign rather than an immediate written assignment; compare Croydon LBC v. Buston (1991) 24 HLR 36, CA.

181LPA 1925 s 53(1)(a).

an immediate equitable interest in the land. A contract for a lease operates as an equitable lease under Walsh v. Lonsdale.182 Lonsdale agreed as landlord to grant a lease of a mill to Walsh for seven years by unsealed writing. The rent was a minimum of £810 a year. After possession was taken in 1879, rent was paid quarterly in arrears for three years. In March l882 the landlord served notice on the tenant, as he was entitled to do under the contract, requiring a year’s rent in advance from that date. He waited only two days before distraining for that rent.183 Walsh sued his landlord for damages for illegal distress, claiming in other words that rent was not due.

Had the lease been granted by deed, the landlord’s case would have been (with apologies for the pun) run of the mill. In fact possession184 was held under a written agreement for a lease for seven years, with the right to specific performance conceded.185 The case was reported at an interim stage, but the decision favouring the landlord was in effect a ruling that the distress was proper.186 Walsh was an equitable tenant for seven years under the terms of his agreement.187

Orthodox analysis assumes that Walsh was liable to pay rent quarterly in arrears at common law and to pay a year’s rent in advance in equity.188 In any conflict between common law and equitable rules, the latter prevail. Actually rent probably was owing at law, but the common law position was simply an irrelevance.189 Walsh v. Lonsdale governs the effect of a contract in the interim period after formation of a contract but before any court application for specific performance. Equity treats as done that which ought to be done, so specific performance would be backdated.190 As between the original parties, a contract has the same effect as if a legal lease had been granted.191 Walsh v. Lonsdale considered the position immediately after 1875 when law and equity were fused by the (Supreme Court of) Judicature Act 1873.192 Unfortunately the decision can be seen either as a case of procedural fusion or of a substantive conflict.

(1) Procedural fusion

[25.30] Maitland concluded that:

“the Court of Appeal in deciding that under the Judicature Acts L[onsdale] could distrain did but give effect to the net result of the previously existing rules of law and equity.”193

182(1882) 21 Ch D 9, CA; Grays’ Elements (3rd ed), 574–586; Hopkins, Informal Acquisition, 61–86; Megarry & Wade (6th ed), [14.039–14.053], [14.168–14.171]; Sparkes NLT, 521–534.

183Ie he seized goods belonging to Walsh.

184Taking possession (mentioned at 14, Jessel MR) is not relevant after the abolition of interesse termini doctrine: LPA 1925 s 149(2).

185Both parties had an interest in securing a legal lease, Lonsdale to ensure his right to distrain and Walsh to keep occupation for all seven years.

186An interlocutory application to recover the goods taken by distress; the tenant was required to lodge security for the amount of the rent, implying that rent was owing and that the distress was lawful.

187Similarly a contract for a lease for life: LPA 1925 s 149(6); Kingswood Estates Co v. Anderson [1963] 2 QB 169.

188Maitland’s Equity, 157.

189P Sparkes (1988) 8 OJLS 350, 351–355.

190P Sparkes [1989] JLH 29 ( a legal distress was not justified).

191Liabilities date from entry into the agreement: Trane UK v. Provident Mutual Life Assurance [1995] 1 EGLR 33.

19236 & 37 Vict c 66; amendments in 1875 did not affect fusion.

193Maitland’s Equity, 157; Holdsworth’s History vol XV, 134; Supreme Court Act 1981 s 49(2).

In pursuance of this proceduralist vision, Lord Esher MR (who sat in Walsh v. Lonsdale as Brett LJ) later restricted the scope of the decision to cases “where there is such a state of things that a court of equity would compel specific performance.”194 In most cases in which equitable status has been refused the contract has been conditional, so that the right to specific performance has never accrued, and the future tenant’s rights are obviously contractual.195 Where procedural theory extends beyond that it suggests, for example, that there was no equitable lease in a county court lacking the jurisdiction to grant specific performance.196 This is quite wrong.

(2) Conflict

[25.31] In a fused system the conflict provision197 allocates priority to the equitable rule whenever this is different from the common law rule. Walsh v. Lonsdale can be seen as just such a case. At one level there was a conflict about the estate held by Walsh who, Jessel MR said, had a seven year term in equity rather than the old common law periodic tenancy.198 On another level, the case seems to decide that distress is allowed under a contract after 1875,199 whereas earlier cases saw distress as a legal remedy restricted to a legal lease.200 Most modern cases adopt the true fusion line.201 For example, the contract continues to regulate the rights of the parties after the lease has ended, when the right to specific performance is lost.202 Also, a sub-tenant holding from a Walsh v. Lonsdale head tenant has an equitable sub-tenancy, without the need for any proof that the superior tenancy is specifically performable.203

194Swain v. Ayres (1888) 21 QBD 289, 293; Gray v. Spyer [1922] 2 Ch 22, CA. Support comes from cases on equitable charges: Holroyd v. Marshall (1862) 10 HLC 191, 11 ER 999; Rose v. Watson (1864) 10 HLC 672, 11 ER 1187; Howard v. Miller [1915] AC 318, 326, Lord Parker; Central Trust & Safe Deposit Co v. Snider [1916] 1 AC 266, HL.

195Cornish v. Brook Green Laundry [1959] 1 QB 394, CA; JWA Thorneley [1959] CLJ 171; Warmington

v.Miller [1973] QB 877, CA.

196Foster v. Reeves [1892] 2 QB 255, CA. Now limited to claims as opposed to defences and counterclaims: Cornish v. Brook Green Laundry [1959] 1 QB 394, CA; Kingswood Estate Co v. Anderson [1963] 2 QB 169 (ratio); S Gardner (1987) 7 OJLS 60, 69–70. Widening of the county court jurisdiction has removed much of the sting from Foster: P Sparkes (1987) 6 CJQ 304.

197Now Supreme Court Act 1981 s 49(1).

198(1882) 21 Ch D 9, 14; Cardiothoracic Institute v. Shrewdcrest [1986] 1 WLR 368, 378B, Knox J; Tinsley v. Milligan [1994] 1 AC 340, 371A–B, Lord Browne-Wilkinson; R v. Tower Hamlets LBC ex p Von Goetz [1999] QB 1019, CA; R(JR) Pickering v. Bradford MBC (2001) 33 HLR 38, Munby J.

199(1882) 21 Ch D 9, 15; Re Young ex p Vitale (1882) 47 LT 480; Crump v. Temple (1890) 7 TLR 120;

Murgatroyd v. Silkstone & Dodsworth Coal & Iron ex p Charlesworth (1895) 65 LJ Ch 111; Manchester Brewery Co v. Coombs [1901] 2 Ch 608; Rickett v. Green [1910] 1 KB 253.

200Vincent v. Godson (1853) 1 Sm & G 384, 390, 65 ER 168, Stuart V-C; Walters v. Northern Coal Mining (1855) 5 De G M & G 629, 43 ER 1015, Cranworth LC; P Sparkes (1988) 8 OJLS 350.

201Apart from those mentioned elsewhere; Allhusen v. Brooking (1884) 26 Ch D 559; Re Maugham (1885) 14 QBD 956; Crump v. Temple (1890) 7 TLR 120; Zimbler v. Abrahams [1903] 1 KB 577; Rushton v. Smith [1976] QB 480.

202Tottenham Hotspur Football & Athletic Co v. Princegrove Publishers [1974] 1 WLR 113.

203Industrial Properties (Barton Hill) v. Associated Electrical Industries [1977] QB 580.

(3) Statute

[25.32] Some rights are denied to equitable tenants204 because the statute conferring the right defines “tenants” too narrowly. A legal tenant in breach of a covenant in his lease is liable to forfeiture, but he has a statutory right to receive a notice warning him what is wrong205 and to effect a timely remedy of the default. Coatsworth v. Johnson206 held that a tenant in breach of a contract for a lease had lost the right to specific performance, so that he had no protection as a tenant and no right to a warning notice. This wrongly applied pre-1875 law,207 was shown to be wrong in the case of a contract lacking a forfeiture clause,208 and is contrary to what Jessel MR thought.209 The underlying cause was the narrow ambit of the early statutory provisions about warning notices, but corrective legislation in 1892210 ensures that equitable tenants do now benefit from the notice provision.211

2.Purchasers and equitable tenants

[25.33] Maitland, in his Lectures on Equity stressed that different considerations had to be applied when Walsh v. Lonsdale doctrine was applied to a case involving third parties:

“[B]etween the contracting parties an agreement for a lease may be as good as a lease. . . . But introduce the third party and then you see the difference.”212

This was another case of defective statutory definitions. The old rules for the running of leasehold covenants were restricted to legal tenants,213 but modern statutes do equate legal and equitable leases.214 In modern law there should be no difference between a lease by deed and one created by contract, provided only that the agreement is properly protected so as to secure priority over the purchaser.215

204Borman v. Griffith [1930] 1 Ch 493, 497–498 (not a conveyance); City Permanent BS v. Miller [1952] Ch 840, CA; Re Rycroft’s S [1962] Ch 263; S Gardner (1987) 7 OJLS 60, 63.

205LPA 1925 s 146; see below [26.35].

206(1886) 55 LJ QB 220; Swain v. Ayres (1888) 21 QBD 289; Bell Street Investments v. Wood (1970) 216 EG 585, O’Connor J.

207Parker v. Taswell (1858) 2 De G & J 559, 44 ER 1106.

208Lowther v. Heaver (1889) 41 Ch D 248, CA; Gourlay v. Duke of Somerset (1812) 1 V & B 69, 73, 35 ER 27, Eldon LC.

209Walsh v. Lonsdale (1882) 21 Ch D 9, 14.

21055 & 56 Vict c 13; now LPA 1925 s 146(5)(a)–(c). This could also be given by express agreement:

Dream Factory v. Crown Estate Commissioners [2000] 3 EGLR 107, Ch D.

211Sport International Bussum v. Inter-Footwear [1984] 1 All ER 376, 385e, Oliver LJ; S Gardner (1987) 7 OJLS 60, 63, 98; C Harpum (1984) 100 LQR 369, 372–375; Re Olympia & York Canary Wharf (No 2) [1993] BCC 159, Morritt J; Megarry & Wade (6th ed), [14.168–14.171]. Query dicta in the pre-condition case Greville v. Parker [1910] AC 335, 341, PC.

212Maitland’s Equity, 158.

213See below [27.31].

214LPA 1925 ss 141–142; LT (Covenants) A 1995 s 28(1); also eg LTA 1988 s 5(1).

215Eg by entry of a notice or by occupation.

3.Estoppel

[25.34] A lease can be created by estoppel,216 but here the right in advance of a court order to enforce it is inchoate.217

G. SUBSTANTIVE REGISTRATION OF LEASES

1.Categories after 2002

[25.35] The original 1925 scheme218 was confused and fragmentary219 until greater coherence was introduced in 1986.220 These categories were reworked again in 2002, with much confusion creeping back in. An undoubted defect in the Land Registration Act 2002 is the failure to give convenient labels to the various types of lease recognised by the Act. Basically there are three kinds of lease: (1) leases requiring substantive registration – here called registrable leases; (2) leases requiring protection by notice – here called protectible leases; and (3) short leases which override the register – here called overriding leases. Many but not all leases can migrate from category (3) to category

(2). The position is complicated further by the need for transitional provisions to cope with the change from the 1925 to the 2002 system.

These categories are similar on compulsory first registration,221 on voluntary first registration,222 on the grant of leases out of existing registered titles, and on the transfer of leases.223 It would have been better to have defined each category once to avoid the awkward repetition of the 2002 Act.

2.Registrable leases

(1) Seven year leases

[25.36] Registration is required of any legal leasehold estate for a term which has more than seven years to run,224 this time is measured at the time of the transfer grant or creation calling for registration.225 The most marked change226 is the shortening of the length of registrable leases from 21227 to seven years, a change opposed by the profession228 but one that will greatly increase the utility and comprehensiveness of the

216Tower Hamlets LBC v. Sherwood [2002] EWCA Civ 229, [2002] HER 13.

217See above [23.32].

218LRA 1925 ss 8–12, 21–24, 48, 70.

219Hayton’s Registered Land ch 3; FRR Burford (1936) 1 Conv 344; R Graham Page (1937) 2 Conv 98.

220LRA 1986 in force January 1st 1987; Law Com 125 (1983).

221LRA 2002 s 4(1)(c), (2)(b), (4).

222S 3(3)–(4).

223S 27(2), sch 2 para 3.

224Ss 3(3), 4(2), 27(2). Mortgage terms are not substantively registrable.

225This form of legislation does not take full account of the gap between the grant and the term taking effect; if this is more than 3 months registration is compulsory: see below [25.37].

226Law Com 271 (2001), [2.6], [3.14].

227P Sparkes NLL (1st ed), 399–400.

228Hansard HL vol 1916, February 11th 2002, col 40.

register, since it will bring on to the register many business leases.229 There is power to reduce the length of registrable leases still further.230

(2) Other registrable leases

[25.37] This category is restricted to legal estates,231 the following of which may attract substantive registration:

(1)a lease for any discontinuous period however short;232

(2)any lease to take effect in reversion more than three months after the date of the grant;233

(3)certain “public” leases;234

(4)any lease of a registered franchise or manor.235

3.Events calling for substantive registration

(1) Compulsory first registration on grant of a new lease

[25.38] Compulsion applies on a grant or transfer of a registrable lease, now as already explained basically a lease having more than seven years to run at the time of transfer grant or creation,236 and subject to the exceptions also outlined above, and also to the principle that registration is not required when a lease is assigned or surrendered to the owner of immediate reversion so as to merge into it.237

(2) Grant of a new lease

[25.39] When a registrable lease is granted out of an unregistered reversion, registration of title is compulsory, the triggers238 being broadly the same as for freeholds and under post-1997 law.239 It makes no difference whether the grant is for valuable or other consideration or by way of gift or pursuant to a court order.

(3) Compulsory registration on transfer of an unregistered lease

[25.40] Registration is also compulsory following a transfer of a qualifying estate, that is a registrable estate, the length exceeding seven years judged at the date of the

229There is a trend for shorter terms: J Roberts [1997] 24 EG 55 (average in 1995 14 years).

230LRA 2002 s 118; Law Com 271 (2001), [3.16], EN [519–520]; transitional protection will be required.

231LRA 2002 s 3(1)(a); this is much better than LRA 1925 s 2 which talked of leases capable of existing at law – implying that equitable leases should have been included. Mortgage terms are not substantively registrable.

232Registration is voluntary: LRA 2002 s 3(4); Law Com 271 (2001), [3.10–3.16]. This will include timeshare arrangements as in Cottage Holiday Ass v. Customs & Excise Commissioners [1983] QB 735.

233Registration is compulsory: LRA 2002 ss 4(1)(a), 27(2)(b)(ii).

234See below [25.58].

235LRA 2002 s 27(2)(c).

236LRA 2002 s 4(2); PJG Williams [2001] 28 EG 138.

237LRA 2002 s 4(4)(b).

238S 4.

239Law Com 271 (2001), [3.30–3.34]; Sparkes NLL (1st ed), 399–400; see above [9.24].

event calling for registration. This may therefore bring on to the register a pre-2002 Act lease in the bracket 7–21 years which was not registrable when granted but which will require registration if assigned. The triggers are:240

a transfer for any consideration, valuable or otherwise or for a negative value;241 a gift, settlement, assent or vesting assent;242

a transfer in pursuance of court order; and transactions with certain “public” leases.243

Events which do not act as triggers are:244

assignment or surrender of lease to the owner of the immediate reversion so as to cause merger;245

death (when the subsequent assent is the trigger); and

bankruptcy (when it is the the court order appointing a trustee in bankruptcy).

(4) Voluntary first registration

[25.41] Voluntary registration is allowed, without any trigger, of 246 any leasehold estate:

with more than seven years unexpired;

which coupled with a subsequent lease taking effect within one month of the end of the first lease creates a term exceeding seven years;247 or

any discontinuous term however short.

(5) Transfer or grant of a lease out of a registered title

[25.42] Grants of leases out of registered titles are affected by registration requirements, as are dispositions of registrable leases.248 No legal rights pass in advance of registration.249 The requirement of registration250 applies to the following transactions with registrable leases:

a transfer;

a grant of a lease for more than seven years;251

a grant of those other leases that are registrable;252 and some transactions with “public” leases.

240LRA 2002 s 4(1)(a), (2).

241S 4(6).

242S 4(1)(a), (7), (9); except a bare trust for the settlor or a transfer uniting the legal and sole beneficial interest.

243See below [25.58].

244LRA 2002 s 4(3)–(5).

245S 4(4)(b).

246S 3(3)–(4).

247S 3(7); Law Com 271 (2001), [3.13].

248LRA 2002 s 27.

249See above [8.43].

250LRA 2002 sch 2.

251This is a disposition and not a first registration: LRA 2002 s 4(1)(c), (2).

252See above [25.37].

Registration requirements do not apply to death, bankruptcy, or corporate dissolution.

4.Rules for substantive registration under the 1925 Act scheme

[25.43] Any legal lease with a term exceeding 21 years remaining unexpired at the time of registration required completion by registration.253 This applied: (1) to a grant of a new lease by a landlord whose title is registered, when the case is one of dealing; (2) to a grant of a new lease by a landlord with an unregistered title, when it is a case for first registration;254 or (3) to any transfer of an unregistered lease with at least 21 years of the term unexpired at the time that it passes.255

If a long lease was granted before December 1990 (when the last parts of the country became compulsory) and the last sale occurred while the district was noncompulsory, registration may never have been triggered – though it will be if the lease is assigned when more than seven years remain. For grants before 1987256 further factors come into play. If the landlord’s title was unregistered at the time of the grant of the lease, registration of leases (both grants and assignments) was only compulsory where the term was for 40 years or more, and remained voluntary where the term was between 21 and 40 years in length.257 Further, substantive registration was not allowed for leases containing an absolute prohibition against dealings.258

5.Classes of leasehold title

(1) Leasehold absolute

[25.44] Absolute title requires proof of the title to the lease and also proof of the landlord’s title to grant the estate.259 The requirements for first registration with leasehold absolute title are rather similar to the requirements for freehold absolute title, the test being whether a competent professional adviser would advise a buyer to accept the title,260 but the registrar may disregard any defect which is not likely to lead to the holding being disturbed.261 The state guarantees both ownership of the lease and that the lease was validly granted and if the tenant is in possession is pretty well secure against prejudicial alteration of the register.262

Registration with title absolute has effect263 to vest the leasehold estate with all easements and other appurtenant rights that benefit it264 subject to the following burdens:

253LRA 1925 s 8(1)(b) as amended by LRA 1986 s 2.

254LRA 1925 s 123, as amended by LRA 1986 s 2; the period was measured from the grant, not the date of application for registration: LRA 1925 s 8(1A).

255LRA 1925 s 8(1) and 8(1A) as amended.

256LRA 1986.

257LRA 1925 old s 13(1).

258LRA 1925 old s 8(2). In fact such a lease could be sold with the consent of the landlord and the anomaly was removed by LRA 1986 s 3.

259LRA 2002 s 10(1).

260S 10(1).

261S 10(4).

262See above [11.48ff].

263LRA 2002 ss 12(2)–(4), 13(1); DLRR 2003 r 31.

264LRA 2002 s 63; Law Com 271 (2001), [9.29–9.35].