Distinction between a lease and a license
- A lease confers an interest but not a license
- A tenant (with/without) or a licensee with exclusive possession can sue in nuisance (Hunter v Canary).
- Essential test to distinguish lease from license is test of exclusive possession. (Mahuvawalla v Iranee)
Requirements for a lease
- Exclusive Possession
-Exclusive possession is the right to use the land to the exclusion of all others, including the grantor himself, albeit temporarily and with some restrictions. (Street v Mountford)-Exclusive possession distinguished from exclusive occupation - attribute of a tenancy v right of sole occupation.
Difference: Although having exclusive physical occupation, does not have overall control over the use of, and access to, the premises; Because the occupier can be moved around or landlord have unlimited access to the premises in order to provide services.
How to distinguish?
- If landlord provides service that required the landlord or his servants to exercise unrestricted access to and use of the premises -> NO exclusive possession -> NOT tenants (Street v Mountford)
- If occupancy does not require services that leads to unrestricted access to and use of the premises -> Likely to HAVE exclusive possession -> YES tenants (Street v Mountford)
- It is the inability to resist intrusion by the landlord who requires access to supply the services that is the key. (Antoniades v Villiers). If there is such a contract of service but the service was never supplied, the landlord still reserve the right to access the premise, therefore, it is still NOT tenancy.
Example of NO exclusive possession:
- If landlord has a right to introduce other licensees to share the premises at a later date (Somma v Hazelhurst).
- A term that allows owner to move the occupier to another room within the house (Crancour v Da Silvaesa).
- Was not allowed to see visitors and had to comply with directions of warden. (Westminster v Clarke)
- Exclusive use of a bunk in a cubicle
- Students in university halls of residence
- Lodgers in hotels or boardinghouses
- Lodgers in a furnished home or serviced apartments and residents in nursing homes
- Occupiers who provides domestic service in return and pay minimal payment below economic rent (Barnes v Barratt)
NO exclusive possession means NO tenancy conclusively (Lam Man-Yuen v Lucky)
But Exclusive possession does NOT infer a tenancy conclusively (Lam Man-Yuen v Lucky)
The fact of exclusive possession for a fixed term at a rent gave rise to a tenancy unless special circumstances existed which negative such a presumption (Street v Mountford)
Special circumstances beyond exclusive possession (Exclusive possession already established)
1a) Family arrangement thus NO tenancy (So Ho v Chan Chui Yip)
1b) Fact of family relationship but YES tenancy (Nunn v Dalrymple)
2a) Act of friendship or generosity thus NO tenancy (Street v Mountford)
2b) Act of friendship or generosity but YES tenancy (Ramnarace v Lutchman)
3a) NO tenancy if occupant is an object of charity or a service employee occupant (Street v Mountford) because his possession should be treated in law as someone else's possession.
3b) Occupant in cheap housing provided by housing association is NOT object of charity even if occupant agreed not to have tenancy (Bruton v London)
3c) The ultimate question is whether the occupant's right to exclusive possession is referable to a legal relationship of charitable nature other than a tenancy? NO tenancy if it is (Gray v Taylor)
3d) Possibly YES tenancy if service occupancy is simply incidental to, and not contingent on employment (Facchini v Bryson)
Irrelevant factors in determining lease or not
1) Duration of occupancy (Marchant v Charter)
2) Provision of furniture (Marchant v Charter)
3) Payment for the occupancy is called "rent" (Street v Mountford)
4) Potential application of the LTO (Street v Mountford)
5) Look at whether the requirements of a tenancy are fulfilled.; what the occupancy agreement is called -"lease" or "license" is NOT conclusive (Street v Mountford)
6) Professed intention test in Somma v Hazelhurst REJECTED; look at whether the requirements of a tenancy are fulfilled; whether it is expressly intended to be a "lease" or "license" is NOT conclusive (Street v Mountford)
7) Only relevant intention is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent (Street v Mountford)
Control & exclusive possession
-Have to take account of the surrounding circumstances to determine whether the degree of control enjoyed by the occupier is sufficient to conclude that a right of exclusive possession is granted (Street v Mountford)
-Have to determine whether the terms are unrealistic and shams and are intended to cover up the grant of tenancy (Street v Mountford)
-E.g. In Antoniades v Villers, in the agreement, the landlord reserved a right to authorize someone to share or share the flat with the couple occupiers. The term was unrealistic because the flat was specifically for the residence of a couple.
But Exclusive possession does NOT infer a tenancy conclusively (Lam Man-Yuen v Lucky)
The fact of exclusive possession for a fixed term at a rent gave rise to a tenancy unless special circumstances existed which negative such a presumption (Street v Mountford)
Special circumstances beyond exclusive possession (Exclusive possession already established)
1a) Family arrangement thus NO tenancy (So Ho v Chan Chui Yip)
1b) Fact of family relationship but YES tenancy (Nunn v Dalrymple)
2a) Act of friendship or generosity thus NO tenancy (Street v Mountford)
2b) Act of friendship or generosity but YES tenancy (Ramnarace v Lutchman)
3a) NO tenancy if occupant is an object of charity or a service employee occupant (Street v Mountford) because his possession should be treated in law as someone else's possession.
3b) Occupant in cheap housing provided by housing association is NOT object of charity even if occupant agreed not to have tenancy (Bruton v London)
3c) The ultimate question is whether the occupant's right to exclusive possession is referable to a legal relationship of charitable nature other than a tenancy? NO tenancy if it is (Gray v Taylor)
3d) Possibly YES tenancy if service occupancy is simply incidental to, and not contingent on employment (Facchini v Bryson)
Irrelevant factors in determining lease or not
1) Duration of occupancy (Marchant v Charter)
2) Provision of furniture (Marchant v Charter)
3) Payment for the occupancy is called "rent" (Street v Mountford)
4) Potential application of the LTO (Street v Mountford)
5) Look at whether the requirements of a tenancy are fulfilled.; what the occupancy agreement is called -"lease" or "license" is NOT conclusive (Street v Mountford)
6) Professed intention test in Somma v Hazelhurst REJECTED; look at whether the requirements of a tenancy are fulfilled; whether it is expressly intended to be a "lease" or "license" is NOT conclusive (Street v Mountford)
7) Only relevant intention is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent (Street v Mountford)
Control & exclusive possession
-Have to take account of the surrounding circumstances to determine whether the degree of control enjoyed by the occupier is sufficient to conclude that a right of exclusive possession is granted (Street v Mountford)
-Have to determine whether the terms are unrealistic and shams and are intended to cover up the grant of tenancy (Street v Mountford)
-E.g. In Antoniades v Villers, in the agreement, the landlord reserved a right to authorize someone to share or share the flat with the couple occupiers. The term was unrealistic because the flat was specifically for the residence of a couple.
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