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Introduction to leases
A lease in land law can be most commonly characterised by the situation where a tenant (the lessee) rents property from a landlord (the lessor), in which the lessee will live, usually for a termly fee (the rent). Section 205(1)(xxvii) of the Law of Property Act 1925 provides a complex definition of a lease, which can be summarised to a commercial transaction in which temporary and conditional use and occupation of land is granted. Leases encompass a much broader range of transactions that the above characterisation suggests. They can be much longer in term than 1 month, such that a 99-year lease can be said to be the equivalent of a fee simple. A lease, or more properly a ‘term of years absolute’, according to s 1(1)(b) LPA 1925, can be a type of legal estate which is ‘carved out’ of its parent fee simple estate.
Types of leases
There are several types of lease, the most common of which are fixed term leases, and periodic tenancies.
Fixed term leases
Fixed term leases are usually purchased for a lump sum with a nominal rent. They are much closer to a fee simple legal estate and as such, are often used as securities for loans. They can, however, be very short, as illustrated by Krell v Henry .
A periodic tenancy is for a set period, but automatically rolls on: it grows from period to period, on the assumption of an (often fictional) agreement not to end the lease at the end of a particular period...
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