Foundations of landlord and tenant law – part 7
For a tenancy – what are the essential elements? Here are what I think, are the most important:-
Parties – There must be a landlord and a tenant. Or you can have joint landlords or joint tenants, but there has to be at least one of each.
Property – This has to be physical land. It can be up in the air, like a flat on the fourth floor, but it has to be affixed to land. That’s why you can’t have a tenancy of a boat (which is just a license).
Term – The length of the term is one big way we differentiate between different types of tenancy or lease. The sort of leases this blog is concerned with mostly have a short term. Anything up to five years, although generally, the term is less than that. Usually 6 or 12 months or a rolling ‘periodic’ monthly tenancy.
Rent – As we saw earlier, this can be a ‘peppercorn’ rent, but it must be something. Otherwise, it is not a tenancy or a lease.
These are the main ‘bits’ of a tenancy – the variables that always need to go in a written document. However, there are two other essential elements of a lease which I want to look at here.
There is a very important House of Lords decision in a case called Street v. Mountford which was decided in 1985. I remember it well, as the day after the report was published in the Times my firm had a case on exactly the same point listed for hearing. That case was about the difference between a license and a tenancy.
- A license is where a landlord gives someone permission to stay in a property so they are not a trespasser.
- A tenancy is, as we have seen, an estate in land.
To a lawyer, they are very different although to a non-lawyer they may sometimes seem the same. In the Street v. Mountford case, the landlord was trying to make out the letting to be a license, as at that time the Rent Act made it very difficult to evict tenants.
What Street v. Mountfort decided was that if you have a property rented out to someone who is paying rent and they have ‘exclusive occupation’ of all or part of that property, then you have a tenancy. Irrespective of what it might say on the piece of paper the parties sign.
What is exclusive occupation? This means that the tenant has the right to shut out everyone including the landlord. When deciding whether an occupation is a tenancy or not, a Court will look at what actually happens rather than what is written on any document.
So if the written document says it is a license agreement where the landlord provides cleaning services, but in fact, no cleaning is ever done, then the letting will almost certainly be a tenancy.
You can also have a tenancy of a room in a shared house. But you have to have exclusive occupation of that room for it to be a tenancy. Generally, this means it has a lock on the door and no-one but the tenant is allowed in, without the tenants’ permission.
Some years ago I did some work for a client who owned a hostel in London. I had to draft up two sets of paperwork. Mostly they used license agreements where backpackers shared a bedroom with others in a dormitory type arrangement.
However my client also owned several properties where rooms were available for single occupancy, and there they had to use a tenancy agreement. He didn’t like it very much, but one time he had tried to evict an occupier of a room under a ‘license’ agreement and failed, so he was anxious to have his paperwork in order, in case there was ever a next time.
Covenant of Quiet Enjoyment
The final thing I want to talk about today is the ‘covenant of quiet enjoyment’. This is a term which is implied into all tenancies whether or not it is actually written down in the tenancy agreement.
The name is a bit confusing as it does not mean the property has to be quiet or that the tenants must be able to enjoy themselves. Basically, it means that the tenant must be able to live in (or ‘enjoy’ to use the old-fashioned meaning of the word) the property in peace without any disturbance from the landlord or anyone acting on his behalf.
As you can see it goes with exclusive occupation. If you have exclusive occupation (at a rent for a term per Street v. Mountford) then you have a tenancy, which brings with it the covenant of quiet enjoyment.
So the landlord will breach the covenant of quiet enjoyment if he enters the property without the tenants’ permission, or if he sends his workmen in without asking first. He will also breach it if he does anything else which prevents the tenants from ‘enjoying’ their use of the property. For example by failing to carry out essential repairs, or by cutting off the supply of services.
In fact breach of the covenant of quiet enjoyment generally implies harassment and under the Protection from Eviction Act 1977, this is a criminal offence.
The covenant of quiet enjoyment goes to the very heart of what a tenancy is and what a tenant is entitled to. It is one of the big rights that tenants have.
Next time I will be looking at the different types of tenancy or lease.