#7134 - Fragmentation By Reference To Time (Leasehold Estates) - Property A

DEFINITION: A lease is an estate in land given by a landowner to another person for a fixed or certain duration which gives that person a right to exclusive possession of the land.

“Demise” is another word for lease, as is “tenancy”.

Lessor’s interest during the lease: leasehold reversion.

• lasts for a fixed duration and determines when the term expires

• term must be certain or capable of being made certain (eg ends ‘on the last day of the 2010 Cth games’ is capable of being made certain)

• Seen as being for a definite period (eg a month) with a superadded provision that it is to continue for a further period unless the appropriate notice is given by either party

• Can be created by

  • Written or oral agreement

  • Fixed term lease is invalid but tenant goes into possession and pays rent periodically

  • Tenant overholds after expiry of a fixed term lease and continues to pay rent periodically

• Determines by proper notice to either party; what notice period is necessary depends on the period of tenancy

• Arise where a person is in possession with the consent of the landlord but does not pay rent

• Can be terminated at any time by either party without giving notice

• Alienation will bring the tenancy to an end

• Can arise by express agreement or by implication (usually by implication).

• Examples

  • Tenant overholding after expiry of lease

  • Purchaser allowed to occupy before settlement

Can't really be leasehold estate because there is no defined duration and duration is not capable of being known for certain. Even a tenancy at will can require reasonable notice (a ‘packing up’ period).

• Arises when a person originally enters into possession with consent (eg a tenant), but remains without paying rent and without the assent or dissent of the landlord (eg overholding tenant)

• Tenant ‘holds over’ without landlord’s express consent or dissent, pays no rent

• Landlord may sue for recovery of possession at any time without notice

• Only arises by implication, eg where

  • T remains in possession after fixed term lease ends without paying rent

  • Life tenant pur autre vie for the life of A remains in possession after A dies

Difference to tenancy at will: no consent from landlord.

See in problem notes.

Radaich v Smith, Street v Mountford

Lace v Chantler, Prudential Assurance Co v London Residuary Body

• Residential and retail leases are regulated by very detailed statutory provisions

• Residential Tenancies Act 1997 (Vic) = a code (examinable)

• Retail Leases Act 2003 (Vic) (for small businesses in retail leases)

  • Landlord and Tenant Act 1958 (Vic) - Originally applied to all leases but now limited by RTA and RLA

• Consumer protection legislation – Competition and Consumer Act 2010 (Cth)

Landlord’s covenants will usually include:

• Allowing T “quiet enjoyment”

• Requiring L to make structural repairs

Tenant’s covenants will usually include obligations

• To pay rent

• To make (non-structural) repairs,

• To use the premises only for specified purposes;

• Not to assign or sublet without L’s permission (will look at in sub-topic G)

See problem questions.

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