Licensee in Property Law - Coursework Example

PROPERTY LAW ASSIGNMENT Can Tania stop Eric strolling through the tulips of Yellowacre? Explain THE MAIN POINTS TO MENTION IN THIS SECTION ARE ASFOLLOWS: - TANIA HAS TO PROVE LOCUS STANDI TO BRING A CLAIM IN TRESPASS AGAINST ERIC. - SHE HAS TO ESTABLISH AN INTEREST IN YELLOWACRE AND PREFERABLE TO BE A TENANT - DISCUSS WHETHER SHE IS A LICENSEE OR TENANT/CLASSIC TEST IN THE STREET V MOUNTFORD DECISION - IF A LICENSEE SHE MAY STILL BE ABLE TO SUE IN TRESPASS. Eric’s actions arguably constitute trespass however the issue in contention will be whether Tania has sufficient locus standi to bring a claim for trespass against Eric. It is established that the right to sue in trespass to land requires some interest in land1, however contention remains as to whether this “interest” requires an estate in land or whether a mere licence will suffice2. For example, in the case of Harper v Charlesworth3 it was held that possession without paper title will suffice. However, in the case of Delaney v TP Smith Limited4 it was held that the mere fact of possession will not to give standing to sue the notional owner of the land5. Conversely, in the case of Manchester Airport PLC v Dutton6 it was indicated that there are circumstances where a licensee will have a right to sue in trespass. If we consider this in context of the current scenario, whilst Tania’s rights as a licensee will not necessarily preclude the right to sue in trespass, status as a tenant will undoubtedly strengthen her position vis-à-vis Eric. Accordingly, the issue in the current scenario regards the nature of Tania’s rights and whether her living arrangement at Yellowacre constitutes a contractual arrangement under a licence, or alternatively proprietary rights under a lease. If the living arrangements point to rights under a lease, it will then be necessary to consider whether the interest takes effect as a legal or beneficial interest. With regard to whether or not the living arrangements constitute a lease or a licence, the general principle of law is that unless an individual occupying another’s land has exclusive possession, they will be a licensee and not a tenant7. With regard to the current scenario, there does not appear to be any contention that Tania has exclusive possession of the house with the right to use the property to grow tulips. However, the ambiguity lies in whether the right to use the remainder of the property to grow tulips is included in the tenancy or merely constitutes a licence as has been labelled by the written document between Tania and Oliver. Furthermore, the other key-defining factor of a tenancy is the offer and acceptance of exclusive possession for a term at “rent8”. We are not aware of the exact terms of the written agreement however Tania has been paying Oliver an agreed rent of $2,000 per calendar month, for a specified period of two years, which points in favour of the agreement being a lease. The distinction between a lease and a licence was formulated in the leading case of Street v Mountford9, where Lord Templeman asserted that the general test for determining a tenancy was to firstly consider the question of “exclusive possession” as a starting point. Lord Templeman further stated that the existence of “exclusive possession” was essentially a question of fact and that the intention of the parties was irrelevant10. Accordingly, if Tania can establish that in fact, the occupation arrangement resulted in the grant of exclusive possession, the arrangement will constitute a lease and not a licence. As Smith comments11, with regard to rented accommodation an occupier in residential accommodation is either a lodger or a tenant12. In Street v Mountford13, Lord Templeman asserted that the facts would point to a lodger if the landlord provides attendance or services that required the landlord to exercise unrestricted access to and use of the premises. However, in practice many landlords have not wanted to provide the services required but have used the shield of lodger as a route to indicate a licence14. For example, in the case of Aslan v Murphy15, the occupier was made to vacate the premises for 90 minutes every day and the owner retained a key on the pretence of cleaning the room and providing bed linen. However, the Court of Appeal asserted that the term requiring the vacating of room was not actually intended to be acted upon and was therefore a sham16. There does not appear to be any such requirement here and no such services were provided to Tania. With regard to the current scenario, the facts suggest that the Oliver does not have regular access to the property in order to provide services. Moreover, the regular receipt of monthly rent will also strengthen Tania’s position that the terms of her occupation constitutes a tenancy. Nevertheless, a person sharing a house may still be a lodger as opposed to a tenant17 and the relevant consideration is whether Tania’s occupation satisfied the requirements of “exclusive possession” as set out in Street v Mountford18. Whilst the terms of the written agreement between the parties describe the arrangement as an “occupancy and agricultural licence”, it is established that whilst the label given to an agreement will be a relevant factor, it is not conclusive19. Indeed in the Street case itself it was asserted that the relevant consideration was to look at whether the arrangement amounted to a tenancy in practice notwithstanding the label given to the arrangement by the parties20. In order for a lease to be valid, the case of Lace v Chantler21 asserts that it must be for a determinable period (in the case of periodic tenancies/recurring tenancies) or a specified period of time. However, with regard to the current scenario, it is important to mention at the outset that the lease if valid may not constitute a legal lease and may take effect in equity22. We are not told whether the property is registered or unregistered. In the case of unregistered land, a legal lease must be created by deed if longer than three years but not more than seven. In the current case the agreement is for two years and therefore can be created without formalities23. In summary, whilst the agreement itself is described as an occupancy licence, the factual scenario gives Tania strong grounds to argue that the arrangement in fact operates as a legal tenancy. As such, she will have a proprietary interest in Yellowacre thereby conferring sufficient locus standi to prevent Eric entering the property on grounds of trespass. Alternatively, if Tania is a licensee, the more recent decision in Manchester Airport plc indicates that Tania will still potentially have locus standi to sue in trespass, strengthened by virtue of her actual occupation24. 2. How quickly can Oliver get possession of the Property? MAIN POINTS TO POINT OUT IN THIS SECTION ARE AS FOLLOWS: - Oliver’s right to terminate if Tania is a licensee - If Tania is a tenant, then she will have an assured shorthold tenancy and he will have to issue a possession order under section 8 of the Housing Act 1996. Earliest he can do this is after six months of the term have passed and the conditions are stringent. Alternatively, he can terminate under s.21 of the Housing Act 1988 however the earliest he could terminate under section 21 is the termination of the two year period by giving two months written notice. Tania uses the property for commercial purposes and as such it may constitute a commercial lease, which will have security of tenure protection under the Landlord and Tenant Act 1954. If there is no contracting out clause in the lease itself then Oliver will have to issue court proceedings to get possession on grounds that he requires the premises for his own business purposes or residential occupation. If Tania is a licensee, Oliver will be able to take possession immediately on expiry of the two-year contract period or alternatively upon giving the requisite period of notice set out in the licence25. Alternatively, if Tania is a tenant, then she will have some protection under common law and statute in respect of termination of tenancy, which clearly impacts Oliver’s rights to get possession of the Property26. The arrangement was created after 28 February 1997 and as such, constitutes an assured shorthold under the Housing Act 1996. As the Landlord, Oliver may seek to terminate and gain possession of an assured shorthold by serving a section 8 notice and providing one or more of the statutory grounds specified by the Housing Act 1996. Under the Housing Act 1996, upon expiry of the two year period, Oliver will be able to within six months recover possession without a court order. However Oliver would have to serve notice on Tania two months before he wishes to retake possession. The notice can be served during the initial tenancy term, after the first six months, which means that Tania’s rights are only protected for six months, after the first six month period, he can give two months’ notice to quit at any time27. If the term has not expired, then Oliver can give two months notice and apply to the court for a possession order28. Such an order under the Housing Act 1996 will generally be granted if the sale is necessary to pay off mortgage loan and the tenant is more than eight-week arrears of rent29. Alternatively, the order may be granted at the discretion of the court in the following cases: 1) If Tania has breached the tenancy agreement; 2) If Tania has created actionable nuisance; or 3) Tania has been using Yellowacre for an illegal purpose. Accordingly, provided the six month grace period of the lease has passed, Oliver will be able to commence proceedings under Section 8, however the procedure is cumbersome and the onus will be on Oliver to satisfy grounds for possession. Alternatively, there is another method available to Oliver for getting possession under section 21 of the Housing Act 1988 by issuing Tania with a section 21 Notice. This notice must: 1) Be in writing, however there is no prescribed form; and 2) Give a minimum of two months’ notice to a tenant, which: i. if a fixed term Assured Shorthold Tenancy must be given to the tenant on or on before the date of the tenancy expires; ii. and be expressed to expire on the last day of the period of the tenancy; which date must be no earlier than the tenancy could have been determined at common law30. Accordingly, under the section 21 provisions, Oliver would be able to seek possession upon two months written notice to Tania, however the lease would not terminate earlier than the expiry of the two year period agreed. Alternatively, Oliver could issue a notice to quit under the common law31. In order to be a valid notice to quit (NTQ) at common law, the NTQ must be of correct length and correspond to the length of the tenancy32. For example, a weekly tenancy requires at least 2 weeks’ notice and a monthly tenancy requires a month’s notice33. There are however two exceptions to this rule. Firstly, a yearly tenancy requires only a 6 month NTQ and the parties can contract to a different length, which can be a shorter or longer period. If we apply this to the current scenario, we are not aware of any express notice provisions in the written agreement itself, it would appear that Oliver would have to give Tania at least six months notice to get possession under the common law. Alternatively, as Tania utilises the property to grow tulips commercially, the lease could arguably constitute a business lease34. As such, business tenancies for a term in excess of six months provide tenants with security of tenure under Part II of the Landlord and Tenant Act 1954. Accordingly, upon expiry of the term, the lease will “hold over” under the LTA 1954 and continue by operation of law35. It can only be terminated by one of the procedures laid down in the Landlord and Tenant Act 1954. If the security of tenure provisions are not contracted out in the lease itself, Oliver will have to serve a notice under Section 25 of the LTA 1954 specifying a termination date of not more than 12 months nor less than 6 months from the date of service36 and the specified date cannot be earlier than the expiry date of the initial fixed term of the lease37. Applied to the current scenario, this suggests that the earliest Oliver could terminate would be upon the expiry of the two year period under the LTA 1954. The notice must specify reasons for objections to a new tenancy only using certain specified grounds38. The exact wording of the grounds are set out in section 30(1) of the LTA 1954 and are reproduced in full in the body of the section 25 request39. With regard to the current scenario the most relevant ground for Oliver would be the section 25(g) ground that he intends to occupy the premises for his own business or residence. Oliver would have to pay Tania compensation if successful in getting possession under a section 25 order40. THE MAIN POINTS IN SECTION 3 ARE AS FOLLOWS: 1) Subdivision of the land by Oliver will be breach of covenant; 2) The fact that he subdivided the land renders it highly unlikely that he will get an injunctive order. Q3. If Fran’s will had left Blackacre so long as does not subdivide it, then this would operate as a restrictive covenant and the legal position would depend on the nature of the covenants and whether the conditions required by law and equity for covenants becoming attached to and running with the land have been satisfied in order to be enforceable. The enforceability of covenants against successors will initially depend on the nature of the covenant. The case of Haywood v Brunswick Permanent Benefit BS41 it was determined that only negative covenants could be enforced against a successor. Furthermore, in the case of London & South Western Railway42, Jessell MR affirmed this principle on the grounds that “the doctrine of [Tulk v Moxhay43], rightly considered appears to be either an extension in equity of the doctrine in Spencer’s Case44 to another line of cases, or else, an extension of the doctrine of negative easements.” Moreover, the House of Lords affirmed previous case law distinguishing between the enforceability of positive and negative covenants in the case of Rhone v Stephens,45 asserting that where a restrictive covenant imposed both positive and negative obligations, the restrictive element would be enforceable distinct from the positive obligation46. Accordingly, with regard to the current scenario, the subdivision of the land would be in breach of covenant in the will in relation to the property. However, whilst injunctive relief is the main remedy for breach of restrictive covenant, the courts are more likely to order prohibitive relief to prevent anticipated breach of covenant in place of a mandatory injunction requiring rectification47. However, it is highly unlikely that Oliver would be able to seek an injunction to reverse the subdivision of land he acquiesced in. Indeed, in the case of Gafford v Graham48 it was held that a claimant aware of a breach of covenant would lose the right to seek an injunction to have the structure pulled down49. Furthermore, it was asserted in this case that a landowner seeking damages or rectification for breach of covenant would lose this entitlement to claim damages where they had been guilty of acquiescence rendering it unconscionable to rely on the legal right. Alternatively, if Oliver sought repossession of the subdivided parts of Blackacre on grounds of breach of covenant, equity provides for potentially substantial damages awards under Section 2 of the Chancery Amendment Act 1858 (Lord Cairns Act). As such, this could expose Oliver to a claim for damages by the occupants of Yellowacre and Blueacre on grounds that the subdivision of Blackacre was done in breach of covenant. In the case of Jaggard v Sawyer50 it was held that the relevant consideration in considering the award of damages is to consider whether the likely injury caused to any claimant by a breach of covenant can be assessed in monetary terms, whether monetary payment is adequate compensation and whether an injunction would be oppressive51. In summary, if the bequest to Oliver expressly prohibited the subdivision of Blackacre, the subsequent division of the property would constitute breach of covenant. The fact that Oliver is responsible for the subdivision would prohibit any attempt by him to seek injunctive relief for breach of covenant on grounds of unconscionability. As such, Oliver would have to rely on the common law and statutory provisions to regain possession of the subdivided parts of land. BIBLIOGRAPHY Blackstone’s Statutes on Property Law., (2007-2008). 15th Edition Oxford University Press. M. Dixon (2005) “Principles of Land Law”, 5th Edition. Routledge –Cavendish Publishing A J Oakley (2001) Megarry’s Manual of the Law of Real Property 8th. Sweet & Maxwell R J Smith (2003) Property Law 4th Edition, Longman R J Smith (2003) Property Law Cases & Materials 2nd Edition, Longman Megarry and Wade., (2007) The Law of Real Property. 7th Edition Sweet & Maxwell J MacKenzie& M Phillips (2005). Land Law. 10th Edition Oxford University Press. Read More