If you were to strip back all the case law and legislation that now is in front of us, and that contributes to a seemingly insurmountable hurdle in presenting such a definition or explanation, a lease in its simple context is a contract between two parties.
In such a contract, an interest of land or property is being created or given by the land owner (commonly referred to as the landlord), to the tenant (commonly referred to as the lessee). In such a contract, land or property has been demised to the lessee for a period of time. When such an interest in land or property is being granted, often there is consideration, (that’s money to me and you), passing from the lessee to the landlord. Such consideration may be a one-off premium payment being made at the start of the lease or a yearly premium, (rent), being paid over the term of the lease. In some instances there maybe a combination of both a one-off premium and a yearly rent being paid to the landlord.
The creation of this contract, the lease, gives rise to many rights, often bestowed on the lessee which, without this lease, the lessee would not have. Obligations both positive and negative between the two parties involved are recorded in this lease contract, where should one party fail to comply with such obligation this would give rise to a breach of lease, which is essentially a breach of a contractual obligation, resulting in someone probably getting sued. Or at least that was and is the theory. The contract, or lease, attempts to strike a position of equality between both landlord and lessee, but does it?
Clearly by looking at both the evolution of common law and statute which governs the relationship between landlord and lessee, it can been seen that the ‘powers that be’ have attempted to bring some certainty and ‘proper’ equality between the parties. One must remember, historically this contractual relationship between landowner and tenant often was not in written form. There was a time in English law where contracts for the sale of land or a disposition of an interest in land were enforceable by oral agreements as well as written ones. You can imagine the disputes that these oral contracts would have given rise to. Legislation was brought about which then sought to crystallise the position; such making it mandatory for transactions involving the sale of land/property and or disposition of the same to be in a written agreement. Reference can be made to both the Law of Property Act 1925 and The Law of Property (Miscellaneous Provisions) Act 1989.
There are many types of leases which relate to many types of properties and or relationships between the landlord and lessee. I shall not be attempting to either describe the numerous types of leases and the difference between a commercial lease and a residential lease for the purpose of this article. The fact is that this is an on going debate which the Judiciary constantly deal with, and is a topic of legal debate depending on what right you are trying to enforce at the time, or the position you want to adopt for personal achievement and or benefit.
In general terms, there are leases which are commercial in nature which attempt to regulate the business relationship between the landlord and lessee and there are leases which are residential in nature (in that the lease relates to a flat or house), which attempt to regulate the relationship between a landlord, who views his interest in the property purely from a commercial basis and a lessee, who views their interest in the demised property as a home. The residential lessees position theoretically changing of recent years, for example the lessee being one of these landlords in his own right, who has acquired the lease property for the purpose of renting the same out for short periods of time and earning a rental income. Whether the lease property is residential or commercial in nature, there is both ample common law and statute to provide guidance and regulations regarding the conduct of both the landlord and lessee.
For the purpose of the rest of this article I shall discuss in broad terms what you the reader should consider and reflect when dealing with a lease which relates to a residential property such as a flat or house. We shall discuss what they are, and why they are needed. Finally, we’ll look at the importance of being familiar with your lease and some of the things to look out for.
The first thing to realise when dealing with leases, is that there is no such thing as a standard lease. There may well be standard prescribed covenants, obligations and clauses which can be adopted and utilised when drafting a lease, however you should always ensure you take good independent legal advise before entering into or purchasing a lease.
Do not be afraid to ask your lawyer any question regarding the lease/property you are acquiring and any benefit you believe the same has. For instance you may believe the lease demise you are acquiring includes a particular car parking space and as such the premium you are paying is reflective. You therefore need to ensure that the car parking space you think you are acquiring is the actual car parking space demised within the lease and or the car parking space will actually belong to you, rather than the lease just making provision for the lessee to park a car in a particular space determined by the landlord from time to time; the landlord even having the ability to withdraw the offer to provide a car parking space. Such other questions you must ensure are investigated are other benefits you believe come with the acquisition of the lease, such as the use of communal gymnasium facilities or other such leisure facilities such as a communal garden etc.
Whilst a lease may seem like a complicated document, in actual fact as mentioned already the role it plays is essentially simple. It is the backbone of the contractual relationship between the landlord and lessee. It is important to remember, a fact most residential landlords attempt to forget, that the lease document is not only the binding agreement in this relationship. Rather it is the blueprint or starting point of the relationship setting out the terms between the parties. Statute plays a large role in determining various obligations and the exercise of such rights that each has a part in
The most common residential lease types are those that we are probably all most familiar with i.e. those where there exists a freehold owner of a property or land, and the leaseholder who is granted a lease over a part of it. However there are other arrangements in which residential leases are fundamental, such as those where a Resident Management Company is in place. In such situations, it is common for most if not all persons owning a flat to also own a share of the freehold via ownership of a share interest in the Resident Management Company. This can result in the leases functioning slightly differently to reflect the make-up of the property. In recent years, the rise of the shared ownership lease has also come to the fore, with its own unique elements such as allowances for the shared ownership leaseholder to gradually purchase the full extent of their individual property.
Some of the more complex estates may even contain multiple levels of ownership, such as head leases and under leases, or have a mixture of leasehold units like flats and freehold dwellings such as houses, commercial units and social housing.
In such instances it is important you are sure that there is adequate provision for each person or entity within such an estate to enjoy the use of their premises in harmony and in conjunction with each other and where necessary each party contributing their equitable share to any costs resulting from them exercising such a right in common with all who reside or occupy such an estate.
As briefly mentioned, the advantage of residential leases in particular is that there is a wealth of both common law and legislation designed to serve as a protection to those party to such leases. Some would argue notably to the benefit of the lessee, but it would be fair to say that such legislation also provides to a discerning landlord a clearer obligation they must provide when seeking to profit in the relationship they are seeking to create. Leasehold ownership is unique to England and Wales, in the way that Acts of Parliament such as the various Landlord and Tenant Acts (notably 1985 and 1987), the Leasehold Reform, Housing and Urban Development Act 1993, and more recently the Commonhold and Leasehold Reform Act 2002, to name but a few, have been instrumental in helping to define and shape the landlord and lessee relationship. Such acts of Parliament have sought to apply guidance and in some instances clarify previous statute and provide further understanding to the contents and workings of residential leases and the way in which the same can be handled by the various parties.
Copy Lease
If you need a copy lease and you have a mortgage on your property a copy can usually be obtained from your mortgage lender.
Alternatively the Land Registry will hold a copy although an administration fee may be charged for providing a copy visit www.landregistry.gov.uk
Shalim Ahmed F.Inst.L.Ex AssocRICS MIRPM
