Leases & Licences
This section looks at the distinction between Leases and Licences and the rights and obligations that arise as a result of occupying premises/land under both types of land holding.
Distinction between leases and licences:
Unless a club is in the fortunate circumstances of owning the freehold of its property and having free access to sailing water, it will normally occupy premises and use water as a lessee or licensee. It is important to know whether the document in force is a lease or a licence, as this has a direct bearing the level of protection afforded by law and in particular the Landlord and Tenant Act 1954. Whether an agreement gives rise to a tenancy depends on the exact terms of the document, irrespective of the title given to it by the parties. Whatever the arrangement, it is most preferable to both parties to have at least the essential terms included in a written document.
A lease is defined as the grant of exclusive possession of premises, for a determinate period of time and should include such words as demise , let or even you shall have a lease . Such occupation of premises is known as a tenancy. An agreement that gave the right to train and exercise racehorses on the gallops , under which agreement the trainer enjoyed complete use of the gallops, was held to be a lease.
A licence is normally created where a person is granted the right to use premises without becoming entitled to exclusive possession of them, or where exceptional circumstances exist which negate the presumption of the grant of a tenancy. A licence will also arise where a club may be granted sole use of the premises but the landlord retains possession and control of the property, despite the use of words in the agreement which are more appropriate to a lease. A canal company that was granted the sole and exclusive liberty of putting pleasure boats for hire on the canal was held to have a licence as the canal remained open for other purposes to other persons.
Granting and accepting tenancies and licences:
Land can only be held with by legal entitles. An unincorporated club is not a legal entity and must therefore appoint individuals to act on the club's behalf as trustees for the club.
A club may enter into a business tenancy and be afforded the protection of the Landlord and Tenant Act 1954. That a club occupies premises for the purpose of the Landlord and Tenant Act 1954 was established by Addiscombe Garden Estates Ltd v Crabbe (1958), when the tenancy of trustees of a tennis club was acknowledged to be for the activities of the club and its members. It is not a condition of the 1954 Act that a rent should be payable under the tenancy.
A number of business tenancies are excluded from the protection afforded to them by the Landlord and Tenant Act 1954, namely:
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Tenancies for a fixed term of less than 6 months without a renewal provision where neither the tenant nor his predecessor occupied the premises before that tenancy commenced.
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Parties to the business tenancy have contracted out of the protection and the County Court has approved the tenancy agreement before it commences.
For details of the effect of the Act kindly refer to the See Also 'Premises - Lease Renewals' section.
Covenants: Express and Implied:
The conditions and mutual promises entered into by parties to a lease are binding on each party. Where covenants to repair, or to use the premises for specified purposes, or not to sublet, are expressly stated in the agreement, this needs no explanation.
There are however, a number of conditions that impliedly attach to a lease, even if they are not stated in the lease agreement. Perhaps the most important condition of it is the landlord's implied covenant to give the tenant quiet enjoyment of the premises, meaning that that landlord or his representative will not unlawfully interrupt the club's occupation of the property.
Similarly, every landlord impliedly covenants not to derogate from the grant when he retains land adjacent to that which comprises the tenancy. This means that the landlord cannot use his land adjacent to the club to render then club s property less suitable for the purpose it was leased. Therefore, if the landlord planted a substantial belt of trees immediately adjacent to a reservoir or lake which it had let for sailing purposes, that could amount to derogation, as could the blocking of access to or lowering of the water level in a reservoir (although in some leases the right to lower the water level is expressly reserved.)
The RYA has available a standard form of lease for inland sailing clubs which may be suitable as a template for most clubs operating or wishing to operate on reservoirs, private lakes or flooded gravel pits. For a copy please See Also 'Premises - Reservoir Leases' section.
Structures placed on leased or licenced land:
Clubs should ensure that the agreement makes provision for the construction of structures (i.e. a club house) on the occupied land and how those structures should be dealt with at the end of the occupation. Under a licence a club is required to clear the land of all its property, such as porta-cabins, at the end of the licence, although in the absence of any stipulation, the club is not compelled to remove buildings (fixed into the ground) erected under the licence. Also, clubs should always bear in mind that, unless there is a specific agreement to the contrary, once a building or any fixture is attached to the ground it is legally deemed to become part of the land, and will revert to the landlord when the lease expires.
If you require further assistance please do not hesitate to contact the Legal Team Tel: 0844 5569519 Email: legal@rya.org.uk.
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Contact UsArticle Published: August 16, 2010 10:01