The defendant with the benefit of an option to take a lease was allowed into the premises pursuant to what was described as, and purported to be, a licence. He then claimed a tenancy.
Held: The agreement was indeed a licence. Referring to Street v Mountford, Hoffmann J said: ‘Earlier in his speech Lord Templeman had contrasted the case in which the relationship between the parties was that of vendor and purchaser with an independent grant of exclusive possession for a term at a rent.’ and
‘Mr. Pearce drew attention to the fact that contracts for the sale of land commonly provide for the purchaser to be allowed into occupation as a licensee pending completion on terms that he is to pay all outgoings together with interest on the purchase money and is to keep the premises in good repair. The purchaser’s possession is ancillary and referable to his interest in the land created by his contractual right to a conveyance and Lord Templeman acknowledges that such a relationship, although exhibiting the ordinary badges of a tenancy, does not create one.
The fact that the contract in this case provided for Essex Plan to acquire a long lease rather than the freehold is not material. The difference between this case and the ordinary sale under the National Conditions is that Essex Plan had an option to take the lease but was not obliged to do so. In my judgment this also does not affect the application of the principle. The option gave Essex Plan the right to call for the grant of the lease and therefore gave it in equity an immediate interest in the land. Its entry into occupation pending the exercise or expiry of the option was ancillary and referable to that interest. There is therefore no need to infer the creation of a tenancy which would give Essex Plan a different interest in the same land.’
Hoffmann J
(1988) 56 P and CR 353
England and Wales
Citing:
Cited – Street v Mountford HL 6-Mar-1985
When a licence is really a tenancy
The document signed by the occupier stated that she understood that she had been given a licence, and that she understood that she had not been granted a tenancy protected under the Rent Acts. Exclusive occupation was in fact granted.
Held: . .
Cited by:
Cited – Cameron Ltd v Rolls-Royce Plc ChD 12-Mar-2007
His lease had expired, but the defendant continued in occupation under a licence. The parties agreed for new leases on terms fixed, but conditional on the lease being allowed to be contracted out. The tenant now asserted that it occupied the . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 11 December 2021; Ref: scu.269959