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A lease is a form of Estate in land in which the landlord confers the right of occupation of the land on the tenant for a fixed period of time. The lease is a limited form of ownership: the tenant will be expected to surrender the property to the landlord at some (perhaps distant) point in time. The landlord continues to have an interest in the land, in the form of the Reversion, which may be valuable in its own right. A lease has both contractual (Contract) and tenurial (Tenure) features, and can be surprisingly difficult to identify. Identifying the existence of a valid lease is often very important because, as an estate in land, it is capable of being enforced not only by the original landlord and tenant against one another, but against their successors in title. In addition, covenants entered into by the landlord and the tenant are capable of 'running with the land', that is, binding their successors in title. In deciding what rights the landlord and the tenant may have, therefore, we have to distinguish between a lease, and a licence (seeref Lease or licence).
Leases can be recognized in law (see legal lease) or in equity (see Equitable lease) under the rule in walsh v lonsdale (1882). The obligations on the landlord and the tenant are mostly the same in either case; what is different is the extent to which the rights of the Lessee can be enforced against a person to whom the landlord sells his own estate.
To be recognized in law, a lease must be made by Deed, unless it is for less than three years, in which case it need not even be made in writing (s.52 Lpa (1925)). In addition, leases of over seven years (under the Editing Land registration act (2002)) remain equitable until they are registered with their own titles (this period was 21 years under the 1925 legislation).
The defining features of a lease are that
- it is for a fixed term, and
- the tenant gets exclusive possession, even against the landlord,and
- it is created out of, and therefore shorter than, some other estate.
It is probably not a defining feature of a lease that the tenant pays rent, although this is, of course, very common.