SQE1 · FLK2 · Land Law
Leases — SQE1 Land question
A worked single-best-answer question on leases, with why each wrong option is wrong — the way SQE1 traps candidates.
Leases
Lorna owns a one-bedroom flat. She signed an agreement with Milo described as a 'licence to occupy', under which Milo pays £900 a month and occupies the flat on his own. Lorna keeps no key, provides no services and has no right to introduce anyone else. The agreement states that Milo is a licensee and that no tenancy is intended. Lorna now claims she can remove Milo without notice.
What is the legal status of Milo's occupation?
- AHe has a licence, because the parties expressly agreed that no tenancy was intended.
- BHe has a licence, because a tenancy can only be created by deed.
- CHe is a lodger, because Lorna owns the flat.
- DHe has a tenancy at will, which Lorna can end without notice.
- EHe has a tenancy, because he has exclusive possession for a periodic term at a rent, whatever label the parties used.
Show answer and reasoning
E is the best answer. In Street v Mountford the House of Lords held that where residential accommodation is granted for a term at a rent with exclusive possession, the grantee is a tenant, save in exceptional circumstances, irrespective of the label the parties use. Milo pays monthly rent and has exclusive possession, so he holds a monthly periodic tenancy.
Rule: Exclusive possession for a term at a rent creates a tenancy, whatever label the parties attach.
- A The court looks at substance not labels; exclusive possession for a term at a rent creates a tenancy. (wrong rule)
- B A periodic tenancy at a market rent taking effect in possession can be created without a deed or writing. (wrong rule)
- C A lodger receives attendance or services and lacks exclusive possession; Milo has exclusive possession. (right rule, wrong facts)
- D Regular periodic payment of rent with exclusive possession creates a periodic tenancy, not a tenancy at will. (wrong rule)
Source: Street v Mountford [1985] AC 809