A partial overlap in the identities of landlords and tenants will not prevent the creation of a tenancy.
It has long been established that a grantor cannot, by granting a lease to himself, make himself his own tenant. There are logical reasons for this; such a grant would be pointless. An individual cannot contract with himself, or distrain on his own goods, or serve a notice to quit on himself and expect the law to take any notice of it. But can a grantor demise land to two or more tenants, if the grantor himself is one of the tenants?
Procter v Procter [2021] EWCA Civ 167; [2021] PLSCS 33 answers this question. Lord Justice Lewison, who spoke for the Court of Appeal, disposed of the objections to a demise by A and B to A, B and C, one by one.
The grant of such a lease would not be pointless. C has no right to enter the land before the grant. But, following the grant, A, B and C will enjoy exclusive possession of the land as against A and B – and that cannot be a legal impossibility because it is precisely what section 72 of the Law of Property Act 1925 (which enables a person to convey freehold land to himself jointly with another person) contemplates. Furthermore, a lease vested in A, B and C would not merge, either at law or in equity, with a freehold held by A and B alone.
Section 82 of the 1925 Act is also relevant. It provides that “any covenant, whether express or implied, or agreement entered into by a person with himself and one or more other persons shall be construed and be capable of being enforced… as if the covenant or agreement had been entered into with the other person or persons alone”. In other words, section 82 enables A and B to contract with A, B and C.
Lord Justice Lewison gave short shrift to the arguments based on distraint. Even if a landlord cannot, or would not, distrain on goods that belong to him alone, there was no reason why he should not distrain on goods that belong jointly to himself and someone else. And he deployed Lord Bridge’s comments in Hammersmith LBC v Monk [1992] AC 478 to deal with arguments about the service of a notice to quit. Where either the lessor’s or the lessee’s interest is held jointly by two or more parties, the will of all the joint parties is necessary to the continuance of the interest.
What then of Lord MacDermott’s suggestion, in Rye v Rye [1962] AC 496, that a person cannot convey a real or personal estate either to himself or to himself and another?
Lord Justice Lewison noted that Lords Radcliffe and Denning had indicated that the position might be different if there was not complete identity between landlords and tenants, or if the lease was from co-owners in one capacity to themselves in a different capacity. And he considered that, where A and B grant a lease to A, B and C, then A and B will own the freehold in one capacity, as landlords entitled to receive rents, while A, B and C will occupy the land in a different capacity, as tenants entitled to physical possession of the land.
Consequently, it is perfectly possible for a grantor to demise land to two or more tenants, even though he is one of those tenants. Furthermore, this analysis applied even though there had been no express grant (whether written or oral) and the existence of a tenancy had had to be inferred from the circumstances of the case.
Allyson Colby is a property law consultant
