Leases Notes

Leases A lease is an estate in land, so gives rights to a tenant in rem. A tenant can then sell, mortgage, sublease, assign, testamentarily promise a lease. A lease is an objective, definitional concept. Not subjectively defined by the parties to a lease contract, because it confers property rights (which will affect third parties). So can describe a lease as a licence, but it will still have the effect of a lease. Likewise, can't make a licence a lease by labelling it so. Whether a lease is created depends on the substantive intentions of the parties, not the nominal intentions (labelling). Definition of a lease: A legal right to the exclusive possession of certain land for a period (less than that for which the landlord holds the land), which period is either certain (fixed tenancy) or capable of being rendered certain. Need: Exclusive possession. A period of time. Period of time: Can be for a fixed term, or be a periodic tenancy; or terminating on occurrence of a future event: Property Law Act s 212 (1) Lease not invalid only because it provides for (notice of) termination on some future event, as long as the event is sufficiently defined so that it can be identified when it occurs. (2) The lease will terminate on the tenth anniversary of its initiation if the future event has not occurred before then (3) (2) doesn't apply if a lease provides for termination on a date that is (a) Fixed in the leased; and (b) Is later than the tenth anniversary date (4) A lease terminating on occurrence of a future date cannot be registered under the LTA, but creates an equitable estate in the land. Rent Not strictly necessary, but might go to whether parties intended to be bound by a contract (and create a property right). Fatac v CIR [2002] Lease vs Licence New Zealand Fish and Game v Attorney General [2009] HC The Crown had granted 'pastoral leases' to farmers, NZFG claimed the leases were in fact licences (so farmers couldn't exclude fishermen on land). Considerations: ? Look at substance of lease, not labels. ? Consider extent of contractual terms; perhaps so qualified that exclusive possession has not been given (like in Wik) ? Purpose of the lease document # If obligations of occupier are extensive, unlikely that they are taken aboard for only a right to occupy. # Does the document suggest the owner retains for itself legal possession? # Does the document give rights to perform positive acts, or exclude such rights? ? There would be no need to specifically provide for restrictions unless otherwise a lessee had exclusive right to possession. # Ability to assign rights (or be consulted before rights are assigned) is consistent with exclusive possession. Licences binding third parties? Harvey v Prangley Daughter and son in law selling property which was subject to grazing licence for parents to a family trust (trustees = daughter and son in law) Document of sale included reference to grazing licence, and sale was for undervalue. Enough to create a constructive trust whereby the trust would be obliged to recognise the grazing rights. Commercial Leases A lease in common law required a deed. It then created 1. Remedies at common law between L/T 2. A lease binding on transferees (because it created a legal estate) 3. A relationship called 'privity of estate', where covenants of a lease that 'touched and concerned the estate' (weren't personal) remained binding on assignees. A lease in equity required only a promise to create a lease, either in writing, or orally with part performance. Created: 1. Equitable remedies to enforce the contract 2. An equitable tenancy binding on transferees who were not bona fide purchasers for value without notice 3. The equitable lease was transferrable. Now the distinction between common law/equitable leases doesn't matter; registration does. S 115 LTA: Form and registration of leases (1) Lease instrument required (2) Lease instrument must contain (a) The land/estate with reference to the register (b) Identity of lessee Property Page 25

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