Covenants, Leases and Possession

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A.
  1. Whether the covenants in the head lease are binding on Jabba.
To begin with, it is imperative to note that, once a lease has been assigned to the new tenant, they are liable for their breaches of covenant. However the solution to this query depends on whether the assignment of the lease complies with the criteria stipulated in Spencer’s Case (1583) (5) Co Rep 16a[1]. These requirements are as follows:
  1. There must be privity of estate between the parties, that is, a relationship between the current property owner and current tenant.
  2. There must be a legal lease.
  3. The lease must have been assigned legally.
  4. The covenant must touch and concern the land.
In this matter, the lease inter alia meets all the above criteria. Consequently, the covenant in the head lease is legally binding to Jabba.
  1. Esmeralda has not received any rent from Jabba for at least ten months.
The characteristics of a lease were laid down by the House of Lords in the case; Street v Mountford [1985] AC 809.Lord Templeman stated: “To constitute a tenancy the occupier must be granted exclusive possession for a fixed or periodic term certain in consideration of a premium or periodical payments.” However, in yet another case law; Ashburn Anstalt v Arnold [1989], contradictory to Street v Mountford [1985], it was concluded that the payment of rent is not a requirement[2]. This is because it is not contained in the definition in section 205(xxvii), LPA 1925. From that standpoint, the best manner in which Esmeralda can resolve this matter is through the forfeiture of the lease:
  • Forfeiture of Leases
When a property owner forfeits his tenant’s lease, he effectively revokes the lease, leaving the tenant with nothing. In order for the property owner to forfeit the lease, there has to have been a breach of contract and a forfeiture clause in the lease. It is solely up to the property owner as to whether he/she will forfeit the lease. A lease may be rendered forfeit either for:
  1. Non-payment of rent.
  2. Breach of other (non-rent) agreements.
In this matter, Jabba’s failure to pay rent for ten months is enough ground for Esmeralda to render the lease forfeit.
  1. Esmeralda has yet to receive any advertising advice from Jabba.
As mentioned in the matter above, for the property owner can forfeit the lease where there is a breach of other (non-rent) covenants. However, we need to consider in what circumstances covenants become enforceable between the old property owner and a new tenant. The answer to this query depends on whether the assignment of the lease complies with the criteria from Spencer’s Case (1583) 5 Co Rep 16a. According to the fourth requirement of Spencer’s Case (1583), ‘the covenant must touch and concern the land.’ In a related case, Lord Oliver formulated rules that provide a working test that determines whether a covenant touches and concerns the land. A covenant touches and concerns the land where:
  1. The covenant benefits only the reversioner for the time being, and if separated from the reversioner ceases to be of benefit to the covenantee.
  2. The covenant affects the quality, mode of user, value, or nature of the land of the reversioner;
  3. The covenant is not expressed to be personal.
  4. The fact that a covenant is to pay a sum of money will not prevent it from touching and concerning the land so long as the three conditions are satisfied and the covenant is connected with something to be done on, or in relation to the land[3].
According to part ‘d)’ above, the covenant demanding that Jabba provide Esmeralda with advertisement advice is enforceable considering it does touch and concern the land. Jabba’s failure to comply with the covenant is therefore tantamount to breach of contract. Esmeralda therefore has ground to sue Jabba for breach of contract in this matter. B.
  1. Adverse Possession.
Adverse possession, commonly known as ‘squatting’, involves possession of land that is incompatible with the title of the owner. This leads to the adverse possessor gaining title to the land[4]. There are various essential determinants for evidence of adverse possession illustrated as follows:
  • Proof of adverse possession
In this matter, Esmeralda, clear to the world and to the exclusion of others, demonstrated her intention to possess the piece of land in dispute. The intention to possess can be demonstrated by conduct provided it is unequivocal and indicates that the squatter’s intention to possess the land has been made open to the world[5]. Relevant case law would be; Prudential Assurance Co Ltd v Waterloo Real Estate [1999] EGLR 85[6].
  • Running of the necessary time period
According to section 15 of the Limitation Act 1980, once 12 years have elapsed, the owner is barred by statute from suing the squatter to recover the land. Note that the Land Registration Act 2002 only applies to unregistered land. In this matter, the land in question had been registered under Anakim’s ownership. Under section 17 Limitation Act 1980, after 12 years of adverse possession the registered proprietor’s title is extinguished. The squatter, at this point is allowed to apply for registration as the registered proprietor of the land at the Land Registry[7]. NOTE: The squatter must prove that he/she has both factual possession and animus possidendi[8]. Esmeralda displayed both when she used the piece of land to plant her crops. Being such a small piece of land, it is reasonable to conclude that she used the land for the same purpose that Anakim would have used it for (Factual Possession). Concurrently she made it known to the world that she intended to possess that piece of land (Animus Possidendi)[9]. In addition, Anakim, the registered proprietor, delayed 18 years in making an objection regarding the fence erected by Esmeralda while the stipulated time period within which an objection is allowed is 12 years[10]. Anakim therefore has no legal claim to the land. Esmeralda would be within legal confines applying/obtaining registration for the piece of land at the Land Registry. Section 15 of the Limitation Act 1980 states,‘no action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him’. On the other hand, Schedule 6 para 5 Land Registration Act 2002 stipulates that: ‘Where there is a counter-notice within the specified time limit, then the squatter's application for registration will be rejected unless that squatter satisfies one of the three conditions set out in Schedule 6 para 5 Land Registration Act 2002:
  • Where the registered proprietor is stopped from objecting.
In this matter Anakin has been stopped from objecting under section 17 of the Limitation Act 1980; after 12 years adverse possession the ‘original owners’ title is extinguished.
  • Where the squatter has some independent right to the land.
  • Where (i) the squatter owns neighboring land and (ii) the boundary is unclear and (iii) for at least 10 years the squatter reasonably believed that the land belonged to him and (iv) the land has been registered for at least a year[11].
Esmeralda meets the first and third criteria. Having established that, the defendant, Esmeralda has the ground to apply for proprietorship over the disputed piece of land. Bibliography Books Martin Dixon, Modern Land Law, 8th Ed A |2012| Adverse Possession. Peter Butt, Land Law, 6th Edition |2009|Lawbook Co., AUSTRALIA. Roger Sexton&Barbara Bogusz, Land Law |2011|Oxford University Press. Legislation Land Registration Act 2002 Law of Property Act 1925 Limitation Act 1980 Cases J.A.Pye (Oxford) v Graham [2002] 3 WLR 221 Powell v McFarlane [approved in J.A.Pye (Oxford) v Graham [2002] 3 WLR 221 Swift Investments Ltd v Combined English Stores Group Ltd [1989] AC 362
[1] A lease contained an agreement that the tenant would erect a wall. The lease however was assigned twice. The court ruled that the burden of lease agreements that touch and concern are passed to the assignees of that lease. [2]Law of Property Act 1925 [3]Swift Investments Ltd v Combined English Stores Group Ltd[1989] AC 362 [4]Peter Butt, Land Law, 6th Edition |2009| Law book Co., AUSTRALIA. [5]Martin Dixon, Modern Land Law, 8th Ed |2012| Adverse Possession. [6]‘The squatter need not intend to own, only to possess the land.’ [7]Sexton and Bogusz, Land Law |2011| Oxford University Press. [8]J.A.Pye (Oxford) v Graham [2002] 3 WLR 221 [9]Powell v McFarlane [approved in J.A.Pye (Oxford) v Graham [2002] 3 WLR 221. [10]Limitation Act 1980.s.15 [11]Limitation Act 1980.s.17.

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