Definitional requirements of a lease change in street

Definitional requirements of a lease- change in Street v Mountford , look to the substance,
not the label
 Street v Mountford (1985), Lord Templeman : ‘ the parties cannot turn a tenancy
into a licence merely by calling it one ’ : substance not form.
 Miss Mountford paid what was called a ‘licence fee’ under the agreement, for her
premises; CA HELD: applying Summer v Hazelhurst: that the document stated the
intention of the parties  it was called a licence, so it was a licence.
 HL : overturned CA. Said the licence was a sham; the only object of using language of
a ‘licence’ was to disguise the fact that Street had granted a tenancy.
 So whether lease or licence doesn’t depend on what it is called by the parties—it’s
about the substance , the label used by the parties is not conclusive.
 The essential characteristics of a lease:
o (1) CERTAIN DURATION + (2) EXCLUSIVE POSSESSION = LEASE
o Templemen added: (3) you need RENT.
 However, Templeman was wrong about the requirement for rent:
o Rent is not a necessary definitional requirement for a lease:
o S205(1)(xxvii) LPA 1925
o Ashburn Astalt v Arnold (1989).
 So essential requirements are (1) CERTAIN DURATION + (2) EXCLUSIVE POSSESSION
= LEASE
(1) CERTAIN DURATION/CERATINTY OF TERM
 Two says to satisfy this:
 (1) Fixed Term:
o Maximum duration known at outset:
o The start and finish is set out in advance
o A lease for 6 months is just as much a lease as one for 999 years.
o Lace v Chantler (1944). Lease for the ‘period of the war’ failed as a fixed
term , because the parties didn’t know how long the war would last.
o Prudential Insurance v London Residuary Body (1992). Arrangement to let
land ‘until it was required for road widening’ . HELD: the exact end date
needn’t be known; only the maximum duration needs to be known; but in
this case even that failed.
o Break clauses : clauses which enable one party or the other to bring the
lease to an end earlier . These don’t offend the rule that the term must be
certain, because the parties still know the maximum term at the outset.
o Same with forfeiture clauses , which allow landlord to end the lease early if
the tenant breaches a covenant. Again, doesn’t offend ‘certain term’, but
maximum term is known at outset.
o Leases for life  are converted into a fixed term of 90 years by s149(6) LPA
1925
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 (2) Periodic Term:
o Hammond v Farrow (1904) : ‘short terms presumed not to be for more than 3
years’.
o In practice, they tend to be weekly, monthly, quarterly, annual .
o They can satisfy certain of term even though at start you don’t know how
long the arrangement will last.
o Agreed mode of payment (the period by which rent is calculated) = the
period term : if you pay weekly, then it’s a weekly lease.
o The lease renews with each payment : the certainty requirement is satisfied if
agreed period of payment.