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www.newlawjournal.co.uk | 22 June 2018 LEGAL UPDATE 13 tockphoto/wsmahar S i ©

However, one of the main provisions of the —why a deed? and Tenant (Covenants) Act 1995, which applies to all leases (including those Mark Pawlowski asks whether we should abolish entered into before 1 January 1996), requires the formal requirement of a deed for leases that, if the landlord wishes to sue the original tenant for fixed charges (ie arrears of rent, service charge or liquidated damages), he must give notice of his intention to do so IN BRIEF in for a term not exceeding within six months of the liability arising: s ff There is much to be said for abolishing the three years . . . at the best rent which can 17. Failure to do so means that the landlord formality of requiring a to be described be obtained without taking a fine’: s 54(2) of loses the right to recover from the original as a deed or to be executed or signed as a the 1925 Act. Leases within this exception tenant to the extent that the sums fell due deed. (which include all periodic tenancies) require more than six months prior to any notice no formality at all and will be valid in even served. To this extent, therefore, landlord s is widely known, a lease must if made orally. The same is not true, however, and tenant already provides its be made by deed in order to be where the parties wish to effect an own limitation period in relation to both valid at law: s 52(1) of the Law of of the tenancy. Here, the parties are required residential and commercial leases. AProperty Act 1925. The current to use a deed even where the tenancy falls Finally, a deed takes immediate effect, requirements are that (1) the document within the s 54(2) exception: Crago v Julian whereas an agreement will not take effect makes it clear on its face that it is intended [1992] 1 WLR 372, [1992] 1 All ER 744 until exchange or the other party signs to be a deed (2) it is validly executed as a (weekly tenancy). the agreement. In the landlord and tenant deed by signature and attestation and (3) context, however, it is customary practice it is delivered as a deed: see, s 1(2) and What are the advantages of using a for the parties to execute a lease and (3) of the Law of Property (Miscellaneous deed? counterpart. They are unlikely to consider Provisions) Act 1989. Most importantly, perhaps, a deed is binding the lease binding until the two parts have Apart, therefore, from the document without . Virtually all leases, been exchanged. Indeed, s 1(5) of the 1989 containing the formal description that it is however, will have consideration moving from Act states that, where a solicitor purports to a ‘deed’ (or expressing itself to be executed both landlord and tenant in the form of the deliver a document as a deed on behalf of or signed as a deed), execution simply of exclusive possession for a stated term a party to the document, it is conclusively requires the individual’s signature (properly in return for a rent, as well as the performance presumed in favour of a purchaser that he witnessed) together with, what has now of the parties’ respective covenants in the has authority to so deliver it. This means become, constructive delivery of the lease. that there is no need for an to arise document (ie, delivery by words) without Second, a deed does not require two simply because a client wishes to sign a deed any change in its physical control to mark the parties—a single party to a deed is sufficient. before completion. In most cases, therefore, essential irreversibility of the transaction. Here again, however, a single party to the the party will simply sign the document Failure, however, to use the appropriate transaction is highly unlikely in a landlord and and the solicitor will then deliver it dating it formal wording (ie ‘signed as a deed in the tenant context. It is well-settled that a single correctly as at completion. presence of . . . and delivered . . .’) renders individual cannot grant a lease to himself: Rye the lease void at law. v Rye [1962] AC 496, [1962] 1 All ER 146. What if a deed is not used? Third, a limitation period of 12 years If the tenant enters into possession of the An important exception applies to the enforcement of a term in a deed, property and pays rent under a void lease, The general requirement of a deed is whereas the period is only six years in relation the law will normally imply the grant tempered in relation to ‘leases taking effect to an agreement which is not a deed. of a periodic tenancy on the same terms 14 LEGAL UPDATE Property 22 June 2018 | www.newlawjournal.co.uk

as the void lease provided these are not of limiting the scope for disputes over As we know, leases granted for a term inconsistent with the periodic term. whether the relevant document has been of more than seven years from the date may also step in and treat the properly signed. The Law Commission, of the grant already require substantive informal lease at law as being ‘as a good as in its report, Deeds and , (Law registration under the a lease’ under the rule in Walsh v Lonsdale Com 163, 1987), while recommending Act 2002: see, s 4(2)(b) and s 27(2)(b). (1882) 21 Ch D 9, [1881-5] All ER Rep Ext the retention of obligatory attestation of If the requirement of registration is not 1690. Significantly, the equitable lease will deeds, also considered it undesirable that complied with, the grant becomes void as be capable of binding successors in by a failure to attest should render the whole a legal in much the same way as a reason of either registration or overriding deed void. Instead, it recommended that lease in the absence of a deed, since the . The equitable lease is, of course, failure to have a signature witnessed and invalid grant takes effect as a dependent on the availability of specific attested would only have the effect that the made for valuable consideration to grant performance and this, in turn, requires the signatory would not prima facie be bound, the legal estate concerned: s 7(1) and s parties’ agreement to be a valid written but that the deed, if capable of operating 7(2)(b). contract at law (signed by the parties without that signatory, would still be valid. Is there also any real sense in retaining and incorporating all the agreed terms) Significantly, the signatory would still be the requirement of a deed for the pursuant to s 2(1) and (3) of the Law of bound if he took the benefit of the deed: assignment of a tenancy? The case of Property (Miscellaneous Provisions) Act see para 2.15. Crago, above, only illustrates the absurdity 1989. In the case, however, of for of applying such formality to short short leases made pursuant to s 54(2) of term tenancies. Here again, equity may the 1925 Act, the requirement of a written A deed takes intervene and save the void assignment at contract is removed under s 2(5)(a) of the immediate effect, law by characterising it as an agreement 1989 Act. “ to assign subject (where appropriate) to Assuming, therefore, that the whereas an compliance with the requisite contractual appropriate contract formalities are formalities contained in s 2(1) of the 1989 complied with (or dispensed), equity agreement will not Act: Croydon London Borough Council v prevails over the so that take effect until Buston (1991) 24 HLR 36. NLJ there cannot be two estates—the implied exchange or the periodic tenancy at law gives way to Deeds: intention the equitable lease on the same terms other party signs as the failed lease at law. To all intents & attestation and purposes, therefore, there is little the agreement” The need for delivery should be abolished. difference between a legal lease created Far from being a matter of physical fact, by deed and an equitable lease created delivery has become a mere question of by written agreement capable of binding In terms of the requirement of delivery, the deliverer’s intention to be bound. Such successors by registration or through it is apparent that this may now be inferred intention can be proved as soon as the actual occupation. from conduct and, in particular, from the formality of signature is completed. mere fact of signing: Hall v Bainbridge Attestation of a signature is not a requirement under s 2 of the Law of Why then a deed? (1848) 12 QB 699; Alan Estates Ltd v WG Property (Miscellaneous Provisions) Act So, if the tenant ultimately ends up with Stores Ltd [1982] Ch 511, [1981] 3 All 1989 and it is debatable whether it serves an equitable lease which requires only a ER 481. The eventual onset of electronic any useful purpose in avoiding disputes signed written contract, why insist on a , under ss 91–95 of the Land over whether a lease has been properly deed in the first place? Attestation of a Registration Act 2002, will, of course, signed. signature (which, as we have seen, is now a ultimately give way to a new era of requirement for a deed), was not (except in paperless transactions where electronic registered conveyancing) essential before signatures (properly certified) will do away Mark Pawlowski is a barrister and professor the 1989 Act and it is debatable whether it entirely with the concepts of delivery and of , School of Law, University of Greenwich. actually serves any useful purpose in terms attestation.

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