4464-sample.pdf - Leases Topic 7 What is a Lease Lease is a...

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Leases- Topic 7
What is a Lease?
 Lease is a contract to confer exclusive possession for a definite term
o Not a license (no EP)
o Not a freehold (no certain end, is a non-freehold estate)
o Real property (land)
 Source of Law: Residential Tenancies Acts 1997 ( Vic)
 A lease is an agreement between the landlord and tenant to confer EP, upon terms for a
limited period of time. Right in rem for duration of lease.
 Lease used to be treated as purely contractual relationship, now is a real property
interest with more extensive remedies and property rights.
o E.g. right to damages, specific performance at equity or the doctrine of ejectment.
Terminology
 Leasehold Grantor = landlord/lessor
 Leasehold Grantee = tenant/lessee
 Agreement = lease/ tenancy agreement /demise /tenancy
o Tenant (T) gets the leasehold
o Landlord (L) gets the leasehold reversion (after the end of the lease, fee simple
revert back to the landlord)
The Lease Contract
 Parties can incorporate any terms subject to some statutory exceptions
o Forfeiture clause : L can determine the lease in the event of a breach by T
 Covenant : damages / injunction
 Condition : rescission
 Typical covenants:
o Covenant by the tenant to pay rent
o Covenant by either tenant or landlord to repair the premises
o Covenant by the tenant not to assign or sublet the premise without prior consent of
the landlord
Types of Leases
1. Fixed Term Lease
 A lease of a fixed period
o Fixed term does not have to be one continuous period
 E.g. lease for three successive public holidays is valid. (certain duration)
o Automatically expires at end of fixed period, not need to give notice.
 Usually created by deed (if >3 years or more) PLAs52(1)
 Duration must be certain .

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o Can be one day or 300 years ( PLA s153 )
o Any lease more than 300 years, tenant can turn into fee simple.
 Perpetual leases (only by statute); E.g. for state library.
 RULE : Can be of any length provided that at the time the agreement is entered into the
exact date of termination is either known or ascertainable by the parties
o B ishop v Taylor (1968) 118 CLR 518
o Lease term for “duratio n of the war” (problem- don't know when war will end).
o “U ntil Easter Sunday 2015” is ok because the date is ascertainable
Roadmap: Lease?
1. Issue – is it a lease?