Leases & licences
A lease grants exclusive possession for a term and is a proprietary estate; a licence is only a personal permission. Correct classification determines whether third parties are bound and whether statutory protection applies.
What "Leases & licences" covers
- Three hallmarks of a lease (Street v Mountford): exclusive possession, for a term, at a rent (rent is usual but not strictly essential — Ashburn Anstalt).
- Substance prevails over the label the parties give the agreement; a document called a 'licence' may still create a lease.
- Sham or pretence clauses purporting to deny exclusive possession are disregarded (Antoniades v Villiers).
- A legal lease over three years must be granted by deed (LPA 1925 s.52); leases over seven years must be registered (LRA 2002 s.27).
- Short leases of three years or less taking effect in possession at best rent without a fine are legal without a deed (LPA 1925 s.54(2)).
- A contract for a lease that fails as a legal grant may take effect as an equitable lease if it satisfies LP(MP)A 1989 s.2 and specific performance is available (Walsh v Lonsdale).
- No exclusive possession where the occupier is a lodger, there is a service occupancy, or entry is under a genuine act of friendship/charity (no intention to create legal relations).
Key cases & statutes
The authorities and provisions most likely to matter for this subtopic:
How it's tested in SQE1
SQE1 uses single best answer questions: a short factual scenario, one precise question, and five options of which only one is the best answer on the law applied to the facts. For leases & licences, expect to be asked what the correct legal position is, what a party may or must do, or which outcome follows — with more than one option looking arguable. Reading the facts carefully and eliminating the near-misses is the skill that earns the mark.
Where candidates lose marks
- Accepting the parties' 'licence' label instead of analysing exclusive possession.
- Forgetting the term must be certain in duration (Prudential Assurance) for a valid lease.
- Missing that a periodic tenancy can arise by implication from possession and payment of rent.
Learn this subtopic in the course
A video lesson, notes and exam-style practice on leases & licences.
FAQ
Is leases & licences tested on SQE1?
Yes — leases & licences is part of the SQE1 Land Law syllabus (FLK2) and can appear in single best answer questions.
How is leases & licences examined in SQE1?
SQE1 tests it by application: you're given a realistic scenario and choose the single best answer from five options. The focus is on using the law correctly, not reciting it — knowing the leading authorities (Street v Mountford [1985], LPA 1925 s.54(2)) helps.