Croftons Conveyancing

The Court of Appeal has held that the automatic 90 year term lease granted for the life of a tenant cannot be relied upon unless a lease for life has been validly created.

In Hardy & another v Haselden & others [2011] the Claimant, Mr and Mrs Hardy, moved to a farm which was owned by the Defendant, Mr and Mrs Haselden and their daughter Mrs Ollerton. However, crucially, there was no written agreement between the parties stating the terms under which Mr and Mrs Hardy could reside on the farm.

The Claimant claimed to have an oral agreement with the Defendant that they could live on the farm for as long as they wanted in exchange for a monthly rent of £200. Ten years after moving to the farm the Claimant sought a declaration that they had a tenancy for life, taking effect as a term of 90 years pursuant to section 149(6) of the Law of Property Act (LPA 1925).

Granting a lease for the life of a tenant used to be common. However, as the length of the tenant’s life was uncertain, so to was the length of the term of the lease! Therefore, The LPA 1925 intervened to automatically convert certain types of leases into leases for a term of 90 years. The qualifying lease includes a lease granted for the life or lives of the tenant(s) so long as a rent or premium is payable by the tenant(s).

In the County Court, the district judge made the declaration sought and ordered the owners of the farm to execute a lease in favour of Mr and Mrs Hardy.

The owners appealed and the Court of Appeal set the County Court’s order aside because:-

• There was no evidence in the particulars of claim given by the Claimant to support their claim to a lease under section 149(6) of the LPA 1925;
• The alleged terms of the oral agreement were not consistent with the grant of a lease as there was no term certain; and
• Even though the alleged terms of the oral agreement might give rise to a life tenancy, they were not in writing. Leases for a term of three years and over must be in writing in order to create an interest in land.

Therefore, the Court of Appeal held that there was no grant of a tenancy, never mind one that could be converted to a 90 year term by section 149(6) of the LPA 1925.

This case is harsh reminder of the formalities which are required to be met in order to create a lease. Should you wish to discuss any of the issues raised by this case with a property specialist please feel free to contact us on 0845 838 7013 alternatively, you can use our contact form.

Cathy McFadden, Associate

Posted on 08.12.11

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