You've just worked through a 180-question FLK2 paper and come out feeling confident about Land Law—only to realise you confused a lease with a licence in question 47, muddled registered and unregistered land in question 89, and forgot which covenants run with freehold land in question 134. Sound familiar? Property Law and Practice sits inside FLK2 alongside Land Law, and while the two subjects overlap, they test very different skills. Land Law focuses on proprietary rights and equity; Property Law and Practice zeroes in on transactional mechanics—how you actually buy, sell, lease and finance property in England and Wales. Miss that distinction and you'll lose marks on questions you thought you knew.
In this article we'll walk through three high-yield areas that appear in nearly every SQE1 sitting: the lease-versus-licence distinction, the enforceability of freehold covenants, and the Land Registration Act 2002 priority rules. Each section ends with a concrete tip you can apply in your next mock. We'll also flag where CELE SQE's FLK2 curriculum and Question Bank mirror the official SRA format, so you're practising the right way from day one.
Lease or Licence? The Street v Mountford Test
A lease grants a proprietary interest; a licence is merely a personal permission to occupy. The distinction matters because only a lease can bind a successor in title, only a lease triggers the Landlord and Tenant Act 1954 security-of-tenure rules, and only a lease counts as an estate in land under the Law of Property Act 1925, s 1(1)(b). The SQE1 examiners love this because candidates often choose the wrong label when the facts are ambiguous.
The leading authority is Street v Mountford [1985] AC 809. Lord Templeman held that if an agreement grants exclusive possession for a term at a rent or other consideration, it is a lease—regardless of what the parties call it. Labels don't matter; substance does. Even if the contract says "licence," the court will re-characterise it as a tenancy if those three hallmarks are present.
Exclusive possession means the occupier can exclude all others, including the landlord (except where the landlord reserves a right of entry for inspection or repair). If the owner retains a general right to move the occupier to another room or to share the space at will, that usually negatives exclusive possession and points to a licence.
Watch for fact-patterns involving "service occupancies" or "lodgers." In Facchini v Bryson [1952] 1 TLR 1386 the court found a licence where the occupier was an employee and occupation was tied to the job. Similarly, where an owner provides attendance or services (daily cleaning, linen changes) and retains keys to perform those services, the arrangement may be a licence rather than a lease—see Marchant v Charters [1977] 1 WLR 1181.
SQE1 tip: In a Single Best Answer question, if the stem says "the agreement is labelled a licence but gives the occupier sole use of a defined flat for twelve months at £800 per month," pick the answer that treats it as a lease. Conversely, if the occupier shares a kitchen with the owner and has no right to exclude the owner from the bedroom, it's almost certainly a licence. The examiners will often add a red-herring clause—"the parties agree this is not a tenancy"—to see if you apply Street v Mountford properly.
Freehold Covenants: Which Ones Run and Which Don't?
Covenants—promises about land use—are everywhere in practice. A developer sells off plots and wants to stop buyers opening a fish-and-chip shop; a neighbour agrees not to build above two storeys. The question is whether a successor in title to the original covenantor or covenantee can enforce (or be bound by) the promise. Get this wrong in an SQE1 question and you'll miss straightforward marks.
Benefit of a Covenant
For the benefit to run at common law, four conditions must be met (derived from P & A Swift Investments v Combined English Stores Group [1989] AC 632):
- The covenant must touch and concern the land of the covenantee (it affects the value or use of that land, not just a personal matter).
- The original parties must have intended the benefit to run. Section 78 of the Law of Property Act 1925 creates a statutory presumption of such intention unless the covenant expressly excludes successors.
- The claimant must hold a legal estate in the benefited land.
- At common law, the benefit and burden were historically required to touch the same land, though this has been relaxed in equity.
In equity the benefit can also pass by annexation (express or statutory under s 78 LPA 1925), by assignment (if assigned with the land each time), or under a building scheme (a local-law exception for estates sold off in plots with reciprocal covenants).
Burden of a Covenant
Here's the rub: the burden of a freehold covenant does not run at common law (Austerberry v Corporation of Oldham (1885) 29 Ch D 750). The only way to bind a successor is in equity, and only if the covenant is restrictive (negative in substance). The rule in Tulk v Moxhay (1848) 2 Ph 774 allows a restrictive covenant to bind successors if:
- it is negative in nature (does not require expenditure of money);
- it was made to benefit retained land of the covenantee;
- it touches and concerns that land;
- the burden was intended to run; and
- the current owner had notice (actual, constructive or by registration).
A covenant "not to use the premises for business purposes" is restrictive. A covenant "to maintain the boundary fence in good repair" is positive (requires expenditure) and will not bind a successor at law or in equity—though clever drafting (an estate rentcharge under the Rentcharges Act 1977, or a chain-of-indemnity covenants) can work around this in practice.
SQE1 tip: If the question asks "Can the new owner enforce the covenant?" check first whether it's the benefit or the burden in issue. If it's the burden and the covenant is positive, the answer is almost always "No, it does not bind the successor." If it's restrictive and registered or the successor had notice, it probably does bind.
Land Registration Act 2002: Priority and Overriding Interests
Most land in England and Wales is now registered at HM Land Registry. The Land Registration Act 2002 (LRA 2002) governs how interests are created, protected and ranked. Two concepts trip up SQE1 candidates every sitting: priority (whose interest wins in a dispute?) and overriding interests (which rights bind a buyer even though they don't appear on the register?).
The Basic Priority Rule
Section 28 LRA 2002 says that the priority of an interest affecting a registered estate is determined by the date of creation, except where the Act provides otherwise. In practice, "provides otherwise" means registration. If you want your interest to bind a buyer, you must either:
- register it as a registrable disposition (for example, a legal lease over seven years must be registered with its own title—s 27(2)(b));
- protect it by a notice on the burdened title (for example, a restrictive covenant, an estate contract, or an equitable lease); or
- rely on it being an overriding interest under Schedule 3.
If you do none of those, your interest is vulnerable. A buyer for value who is registered as proprietor takes free of your unprotected interest (s 29 LRA 2002), even if the buyer knew about it. Knowledge alone does not create priority; registration (or overriding status) does.
Overriding Interests That Bind Everyone
Schedule 3 lists interests that override a registered disposition. The two that appear most often in SQE1 questions are:
- Short leases (para 1): a lease for seven years or less (provided it is legal) overrides, so a buyer takes subject to it even if it's not on the register.
- Interests of persons in actual occupation (para 2): if someone with a proprietary interest (e.g. a beneficial interest under a trust, an equitable lease, an option) is in actual occupation at the date of the disposition and the interest is not obvious on a reasonably careful inspection and the occupier did not fail to disclose it when asked, that interest overrides. This is why conveyancers always ask "Who lives in the property?" and insist occupiers sign consent forms.
An example: A holds the legal title on trust for himself and B (a resulting or constructive trust). A sells to C without B's consent. If B is living in the house when C buys, B's equitable interest will override the sale and bind C, even though there's nothing on the register—Williams & Glyn's Bank Ltd v Boland [1981] AC 487. If B was not in occupation, or if C made enquiry and B failed to disclose, the interest would not override and C would take free.
SQE1 tip: When a question mentions "the buyer inspected the property and saw no sign of occupation," that fact is there for a reason—it may defeat an overriding interest claim under para 2(c)(i), which excludes interests that would have been obvious on a reasonably careful inspection. Read every word of the stem.
Pulling It All Together: A Worked Example
Imagine this SQE1 fact-pattern: "L grants T a three-year agreement to occupy Flat 5 at £900 per month. The agreement states 'This is a licence, not a tenancy.' T has exclusive use of Flat 5 and L may only enter to inspect on 48 hours' notice. L sells the freehold to P. Can P evict T immediately?"
Step one: apply Street v Mountford. T has exclusive possession (can exclude L except for inspection), for a term (three years), at a rent. The label "licence" is irrelevant. This is a lease. Step two: check registration. A lease of three years is legal (granted by deed or, if not exceeding three years, can take effect under s 54(2) LPA 1925 without a deed if at market rent with immediate possession). It does not require registration because it is under seven years. Step three: overriding interest? Yes—para 1 of Schedule 3 LRA 2002. The lease overrides P's purchase. P takes subject to it and cannot evict T until the term ends. The answer is No, P cannot evict T immediately.
That one question touches lease/licence, formalities, registration thresholds and overriding interests—exactly the kind of synthesis the SQE1 examiners deploy. If you've memorised rules in isolation, you'll struggle. If you've practised applying them to layered facts, you'll spot the path in seconds.
How CELE SQE Prepares You for Property Law and Practice
CELE SQE's FLK2 curriculum covers all six subjects—including Property Law and Practice—through structured video lectures, detailed outlines and hundreds of Single Best Answer questions that mirror the official SRA format. Our Question Bank subscription (£575 per month) gives you unlimited attempts at MCQs across both FLK1 and FLK2, with instant feedback and model reasoning for every answer. If you're joining mid-cycle or close to your exam, the Short-term Course (£1,750) condenses the essentials into a focused sprint, and early-bird or last-three-months candidates save £150. You'll also find worked examples of lease-versus-licence scenarios, covenant enforceability grids and LRA 2002 priority flowcharts in the course materials—practical tools you can print and use right up to exam day. For more details or to speak with the team, visit celebar.com, email [email protected], or add us on WeChat at SQE100.
Property Law and Practice rewards candidates who think like solicitors, not law students. Know your Street v Mountford essentials, master the restrictive-covenant rules, and never forget that registration (or overriding status) trumps mere knowledge. Do that, and you'll turn FLK2 Property questions from stumbling blocks into straightforward marks.