The oral lease: Judgment Stress Test for lawyers

The decided case

Landlord Fenner agreed with Tamsin, in conversation, to let her a flat for two years from 1 March at £800 a month. The flat’s market rent was £850. Nothing was written down. Tamsin moved in on 1 March and paid the rent every month.

After nine months, Fenner changed his mind and told Tamsin that there was no lease and that she must leave at the end of the month. Tamsin refused to leave and said that she had a two-year lease.

The court held that Tamsin had a valid lease for the two years.

The rules the court applied

Rule A. A lease of more than three years must be made by a deed that is signed and witnessed.
Rule B. A lease of three years or less may be made orally if it takes effect immediately and the rent is at least two-thirds of the market rent.
Rule C. A tenant who has taken possession and paid rent for more than six months under an invalid lease becomes a periodic tenant, who may be ended only by proper notice.

The decision

Tamsin had a valid two-year lease, and Fenner could not end it early. The lease was for two years, which is under three, so Rule A did not require a deed. It took effect immediately on 1 March, and £800 is more than two-thirds of the £850 market rent (about £567), so under Rule B an oral lease was valid.

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