Examination Timing: 00H00M14S
A woman is the owner of the registered freehold of a workshop. She orally agrees to give an artist the exclusive right to occupy the workshop as his studio. They agree that the arrangement will last for 12 months and that the artist will take immediate possession. There will be no upfront payment but a monthly market rent will be payable. The artist confirms the terms of the arrangement in an email which the woman reads but does not acknowledge. The artist takes no further action in relation to the arrangement but, before the artist moves into the workshop, the woman tells him that she has changed her mind. The artist claims the arrangement has created an enforceable agreement allowing him to occupy the workshop as his studio.
What has been created by the arrangement?
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Under the Law of Property Act 1925, a lease for a term not exceeding three years can be created orally and does not require a deed to be valid. The agreement between the woman and the artist was for a 12-month lease, which falls within this category. Therefore, the oral agreement is sufficient to create a legal lease. The email confirmation, although not signed or acknowledged by the woman, is not necessary to establish the lease under these circumstances.
Key Point: A lease for a term not exceeding three years can be created orally without the need for a deed. This provision allows for short-term leases to be validly established through verbal agreements, provided the terms are clear and there is immediate possession.
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