Mortgages

Introduction

A **lease** (or **tenancy**) is one of the two legal estates in land recognised by **s.1(1)(b) LPA 1925** — the **term of years absolute**. This chapter introduces the **three hallmarks of a lease** (exclusive possession, certain term, and usually rent), the foundational authority of **Street v Mountford [1985] AC 809** (substance over form), the all-important **distinction between a lease and a licence**, the **formalities** for creating a lease, and the **major legislative reforms** — the **Renters' Rights Act 2025** and the **Leasehold and Freehold Reform Act 2024** — examinable from the July 2026 sitting.

Assessment focus

The SRA FLK2 syllabus expressly requires you to know the **essential characteristics of a lease including the difference between a lease and a licence**. You must be able to (1) apply the three hallmarks — **exclusive possession, certain term, rent**; (2) use **Street v Mountford** to determine **lease or licence** on a client's facts (substance over form); (3) identify the correct **formalities** (s.54(2) LPA 1925 for leases of 3 years or less, deed for longer leases, substantive registration for leases over 7 years); and (4) understand the **Renters' Rights Act 2025** and the **Leasehold and Freehold Reform Act 2024**. Questions are single best answer questions set in **realistic client scenarios** — expect to apply the law, not merely recall it. This is a **closed-book** assessment.

Study tips

1) Memorise the **three hallmarks** (exclusive possession + certain term + (usually) rent) and the **Street v Mountford** 'fork not a spade' principle — the **label is irrelevant**. 2) Learn the **sham/pretence** pair: **Antoniades v Villiers** (sham clause -> tenancy) v **AG Securities v Vaughan** (genuine flat-share -> licences). 3) Know the categories that **negate** a tenancy despite exclusive possession: **service occupancy**, **lodger**, family/friendship arrangements. 4) Master the **formalities ladder**: **≤3 yrs** (oral/written OK, s.54(2)) -> **>3 yrs** (deed, s.52 LPA / s.1 LP(MP)A 1989) -> **>7 yrs** (substantive registration, s.4 / s.27 LRA 2002). 5) Understand **Walsh v Lonsdale** equitable leases and that they are **weaker against third parties**. 6) For the **RRA 2025**: ASTs abolished, **s.21 gone**, possession only on **s.8 grounds**, tenant's **2-month notice**.