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Review Your SQE 1 Practice Records

Examination Timing: 00H00M14S

Rachel is the fee simple owner of Sandringham Grove, a large stately home. To boost her income, she allows guests to occupy various suites on a long-term basis and permits Mike to move into one of the suites. Rachel does not provide any services to Mike and does not have any access to Mike's suite except to inspect it to ensure he complies with his obligations under their agreement. 

Which of the following statements best describes the legal position?

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Mike has exclusive possession of the suite and occupies it as a tenant. The primary requirement for an agreement to occupy space to be considered a lease, as opposed to a licence, is the requirement for exclusive possession. Exclusive possession is present when the tenant has the right to exclude everyone from the premises, including the landlord, except as provided for in the lease. This was established in the case of Street v Mountford [1985] AC 809. 

Key Point: For an occupancy agreement to be a lease rather than a licence, the occupant must have exclusive possession. This means the right to exclude all others, including the landlord, except in specific circumstances such as inspections.

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