NATURE AND CREATION OF LEASES WHAT IS A LEASE? . A lease is a right to occupy land or a building to the exclusion of other parties for a period of time · Three common uses: o Commercial office buildings o Retail shops, and o Residential premises · In this unit we focus on commercia office building leases DUAL NATURE OF A LEASE: · A lease is both: o An interest in land; and o A contract · Therefore, both real property law and contract law apply to leases Term Meaning Lessor / the person(s) who Landlord grants the lease and retains a reversionary interest in the land Lessee / Tenant the person(s) who is granted the lease and holds a leasehold interest in the land Reversio n the lessor's remaining interest in the premises during the currency of the lease Demise / demise - antiquated tenancy / lease / technical description of lease
term of years Term Meaning Lease the physical area of Area / land being leased Premises / Demised Premises Sublease a lease of all or part of the premises that is granted by the lessee for a term tenancy - more informal description, often used for residential leases lease - either the grant of a right of exclusive possession for a fixed or determinate term or the document that records that grant term of years - lease for a term of years
that ends at least one day before the end of the lease term. The original lease is known as the 'headlease' occurs when the Holding over lessee remains in possession of the premises and pays rent after a fixed term lease has expired LEGAL DEFINITION - LEASE · A grant by a lessor . To a lessee · Of a right to exclusive possession of land . For a fixed or determinative period of time ffithat may be terminated earlier upon default) . Typically in exchange for the payment of rent andfior other consideration ffior otherwise entered into by way of deed) EXCLUSIVE POSSESSION . Lessee has right to exclusive possession of premises O = right to exclude all others, subject to statute ffie.g. s 107 PLA) and reservations in the lease o -- > lessee has right to remove trespassers and to recover possession of premises Premises must be identifiable · Lease vs licence o A licence is granted to permit a person to use andfior occupy land without a legal right of exclusive possession o A lease is a property right, a licence is, merely personal Radaich v Smith ffi1959) 101 CLR 209 · Concerned a "sole and exclusive licence and privilege to supply refreshments" · The "licensee" was to: o "carry on the business of a milk bar" o "keep business open at all times allowed by the law" o Give up possession upon determination of licence · McTiernan J quotes Lord Denning: