Topic 1 Leases and Licences Overview 2022 PDF

**Topic 1: Leases and Licences** **This document is an overview/summary of Topic 1. It is not a substitute for your own study of the prescribed readings and other study materials.** **A: Background to Topic 1** The exclusive possession of land commonly provides the physical foundation for a home...

**Topic 1: Leases and Licences** **This document is an overview/summary of Topic 1. It is not a substitute for your own study of the prescribed readings and other study materials.** **A: Background to Topic 1** The exclusive possession of land commonly provides the physical foundation for a home or business. When compared with the purchase of a freehold estate, a lease is generally quicker to acquire and requires much less initial capital outlay (although the enjoyment and security of leasehold tenure is generally inferior to the freehold estate). For that reason the leasehold estate is one of the most commonly encountered interests in land. This, together the often diverse interests of the tenant enjoying vacant possession and the reversionary interest in the demised premises retained by the landlord, coupled with the complexity of the law governing the relationship between tenant and landlord, means that the documentation of leases and the resolving of leasehold disputes is common (and often profitable) work for a legal practitioner. For that reason, I am dedicating up to the first 4 weeks of the semester to our study on leases! Our studies will be complemented by a highly practical focus accompanying our study of the law. The topic of retail shop leases will be the subject of the major assignment and will be dealt with intensively through 2 workshops run in lieu of 2 tutorials. We will also consider leases within the current WA legislative framework regarding the COVID-19 pandemic.[^1^](#fn1){#fnref1.footnote-ref} We will not be examining pastoral leases or mining leases in any significant detail. **B. Outline of Topic 1** Our study of leases in week 1 begins with an examination of key concepts including a lease, leasehold reversion, sub-lease and assignment, and covenants. WA requirements at law and in equity for the creation of a lease are considered (see especially *Abjornson v Urban Newspapers Pty Ltd*[^2^](#fn2){#fnref2.footnote-ref}). The difference between the very common fixed term lease, a periodic lease, a tenancy at will, a tenancy at sufferance, and a tenancy by estoppel are considered, before then considering the characteristics and qualities essential to all leases (exclusive possession, duration, certainty and reversion). Note we will not be looking too closely at pastoral leases and mining leases. The obligations and rights of a tenant are considered, with particular attention to covenants implied by the *PLA* or *TLA* and common law against a tenant (e.g. repair). The obligations and rights of a landlord are considered, with particular attention to leasehold covenants implied by statute and the common law against a landlord (in particular quiet enjoyment and non-derogation from grant). Students will be encouraged not to over stress the importance of implied covenants given the general currency of express provisions within a lease. The ability of a tenant to assign or sub-letting is considered in detail, with care being taken to distinguish the two concepts, particularly as regards the enforceability of covenants. Particular attention is given to the consequences of the breach of a covenant by a landlord or a tenant and who is not an original party to the lease. The concepts of privity of contract, privity of estate, a covenant "touching and concerning the land" and the passing of benefits and burdens of covenants are carefully examined. The determination of leases is studied, with particular attention to remedies, including forfeiture by the landlord, and relief against forfeiture to the tenant.[^3^](#fn3){#fnref3.footnote-ref} The doctrine of repudiation is also studied, with particular attention to the remedies available to a landlord (see especially *De Landgrafft v Brown*[^4^](#fn4){#fnref4.footnote-ref}) and how damages are determined. Remedies available to a tenant upon default by a landlord are studied, with particular attention to set-off. **C. Learning Outcomes** After the completion of Topic 1, your learning outcomes should include: - - - - - - - - - - - Note as regards retail shop leases, the required learning outcomes will be achieved through the 2 prescribed workshops and the major assignment. **D. Prescribed readings** **Week** **Topic** **Prescribed Readings Lecture** **Other references (see also paragraph H)** ------------ --------------------- ------------------------------------------------------------------------------------------- ------------------------------------------------------------------ **Week 1** Leases and Licences *Sackville & Neave, Australian Property Law* , 11^th^ ed. paragraphs \[8.1\]-\[8.55.\] *Transfer of Land* Act 1893 (WA) *Australian Real Property*, 7^th^ ed. paragraphs \[14.05\]-\[14.160\] See also *Commercial Tenancy (Retail Shops) Agreements Act* 1985 **Week 2** Lease and Licences *Sackville & Neave, Australian Property Law* , 11^th^ ed., paragraphs \[8.56\]-\[8.117\] *Transfer of Land* Act 1893 (WA) *Australian Real Property*, 7^th^ ed. paragraphs \[14.165\]-\[14.235\] See also *Commercial Tenancy (Retail Shops) Agreements Act* 1985 **Week 3** Lease and Licences *Sackville & Neave, Australian Property Law* , 11^th^ ed., paragraphs \[8.118\]-\[8.144\] *Property Law Act* 1969 (WA) *Australian Real Property*, 7^th^ ed. paragraphs \[14.245\]-\[14.305\] See also *Commercial Tenancy (Retail Shops) Agreements Act* 1985 **Week 4** Lease and Licences *Sackville & Neave, Australian Property Law* , 11^th^ ed., paragraphs \[8.145\]-\[8.220\] *Property Law Act* 1969 (WA) *Australian Real Property*, 7^th^ ed. paragraphs \[14.310\]-\[14.450\] See also *Commercial Tenancy (Retail Shops) Agreements Act* 1985 **E. Lecture Outline: Leases and Licences** **1. Introduction and Sources of Law \[Power point 1\]** 1.1 Classification. 1.2 Key words. 1.3 Sources of WA leasing law. 1.4 Legislation generally applicable. 1.5 Legislation applying to specific types of leases only. 1.6 Legislation controlling leases. 1.7 The common law. 1.8 Equity. 1.9 Is any relevant legislation a code? **2. Creation of leases and types of leases \[Power point 2 (A and B)\]** 2.1 Requirements at law. 2.2 The registration of Torrens leases. 2.3 The registration of Torrens subleases. 2.4 The failure to comply with legal requirements. 2.5 Registration will not save a lease void for uncertainty. 2.6 Leases prior to registration. 2.7 Requirements for a lease in equity. 2.8 The requirements of Wash *Lonsdale* (1882) 21 Ch D 9. 2.9 5 fundamental differences between a lease at law and a lease in equity. 2.10 The agreement to lease. 2.10 Summary of the rules on legal and equitable leases in WA (*Abjornson v Urban Newspapers Pty Ltd*[^5^](#fn5){#fnref5.footnote-ref}*.* 2.11 Creation of tenancy by estoppel. 2.12 Estoppel by convention. 2.13 Equitable estoppel. 2.14 Fixed term leases. 2.15 Periodic leases. 2.16 Tenancy at will. 2.17 Tenancy at sufferance. 2.18 Life tenancy 2.19 Tenancy by estoppel. **3. Lease characteristics and essential elements \[Power point 3\]** 3.1 Lease v licence. 3.2 The impact of statutory provision on what is a "lease". 3.3 The significance of the lease/licence distinction. 3.4 The requirement of exclusive possession. 3.5 The test of exclusive possession. 3.6 The importance of intention of the parties. 3.7 Mining lease. 3.8 Pastoral lease. 3.9 The requirement of duration. 3.10 Rent is not an essential feature if there is a deed or consideration. 3.11 Certainty as to leased area. 3.12 Statutory limitations on dealing with land other than as a lot or lots. 3.13 Landlord must retain reversion. 4\. **Covenants against the tenant \[Power point 4\]** 4.1 Express terms 4.2 Forfeiture clauses. 4.3 *Contra proferentum* rule 4.4 The relevance of a failure to caveat in a priority dispute. 4.5 "Usual covenants". 4.6 Short form covenants. 4.7 Implied covenant to pay rent, rates and taxes. 4.8 Implied covenant of repair. 4.9 Putting in repair v keeping in repair. 4.10 No liability for inherent defects. 4.11 Measuring damages for non-repair. 4.12 Landlord's implied right of entry for inspection. 4.13 Landlord's remedy for breach. 4.14 Covenants implied in a sublease. 4.15 Modifying or negativing implied covenants. 4.16 Covenants implied by common law against a tenant. 4.17 Residential tenancy agreements **5.** **Covenants against the landlord \[Power point 5\]** **5.1 Quiet enjoyment** **5.2 Non derogation from grant** 5.3 Fitness for human habitation? 5.4 **Reasonable care for the safety of occupants.** **5.5 Implied duty of good faith?** **5.6 Covenants implied by construction.** **5.7 Residential tenancy agreements.** **5.** **Assignment and subletting: consent and the unreasonable withholding of consent \[Power point 6\]** **6.1 Assignment of a lease; subleasing.** **6.2 Is there a need to obtain consent?** 6.3 Is the landlord unreasonably withholding consent? 6.4 The consequences of assignment or subletting without consent. **7. Assignment and subletting: the enforceability of covenants by and against an assignee or subtenant \[Power point 7\]** **7.1 Common law requirements.** **7.2 The burden of covenants.** **7.3 Touching and concerning the land.** **7.4 The passing of benefits and burdens of leasehold covenants at law.** **7.5 The passing of benefits but not burdens of covenants in equity.** **7.6 Retail shops and assignment.** **7.7 Variations to a lease.** **7.8 Indemnity by assignee.** **7.9 Options to purchase or renew and assignment.** **8.** **Determination of leases \[Power point 8\]** **8.1 Effluxion of time.** **8.2 Notice to quit.** 8.3 Surrender. 8.4 Merger. 8.5 Forfeiture. 8.6 Exercise of the right of forfeiture. 8.7 Forfeiture in WA. 8.8 The effects of forfeiture. 8.9 Waiver. 8.10 **Residential tenancy agreements.** **8.** **Relief against forfeiture \[Power point 8A\]** **8A.1 A tenant's relief against the landlord's forfeiture.** [^6^](#fn6){#fnref6.footnote-ref} **8A.2 Relief against the forfeiture of a sublease.** 8A.3 Relief against loss of an option. **9.** **Other remedies available to a landlord \[Power point 9\]** **9.1 Frustration.** **9.2 Distress (abolished).** 9.3 Damages and/or injunction. 9.4 Repudiation. 9.5 The 2 options available to a landlord upon a right of termination existing. 9.6 Rules on recovery of damages 9.7 Examples of damages 9.8 Damages where landlord unable to mitigate loss. 9.9 Illegality of penalty clauses. 9.10 Other remedies. **10.** **Tenants' remedies \[Power point 10\]** **10.1 The nature of the obligation to pay rent** **10.2 Set-off at common law; in equity.** 10.3 Commonwealth restrictive trade practices and consumer protection provisions. 10.4 **Residential tenancy agreements.** **F. Tutorial/Workshop activities** Please refer to the tutorial/ workshop activities for weeks 1 and 2 and 3 and 4 on Blackboard. **G: Additional Resources** 1. Residential Tenancy Law and Practice Western Australia ========================================================================================================================================== 2. C Croft, R Hay, L Virgona, *Commercial Tenancy Law*, 4^th^ ed, LexisNexis, 2017, especially chapter 26. ========================================================================================================== 3. W D Duncan, *Commercial Tenancy Law in Australia*, 9^th^ ed, LawBook Co, 2020. ================================================================================= ::: {.section.footnotes} ------------------------------------------------------------------------ 1. ::: {#fn1} *Commercial Tenancies (Covid-19 Response) Act 2020(WA); Residential Tenancies (Covid-19 Response) Act 2020(WA).*[↩](#fnref1){.footnote-back} ::: 2. ::: {#fn2} \[1989\] WAR 19[↩](#fnref2){.footnote-back} ::: 3. ::: {#fn3} See *Property Law Act*, 1969 (WA), s 81[↩](#fnref3){.footnote-back} ::: 4. ::: {#fn4} \(1993) 9 SR (WA) 236[↩](#fnref4){.footnote-back} ::: 5. ::: {#fn5} \[1989\] WAR 191 at 199 per Kennedy J[↩](#fnref5){.footnote-back} ::: 6. ::: {#fn6} *Property Law Act* 1969 (WA), s 81[↩](#fnref6){.footnote-back} ::: :::