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Paper 1 · Lesson 7 — Leases and Tenancies

Lease formation and form

Formation and form of a lease: the verbal-lease cap (3 years), registration of leases over 7 years, and the parts of a lease (premises / habendum / reddendum).

2 questionsAnswers & explanations includedFree — no sign-up

Question 1

A landlord and tenant agree only verbally on a lease of a shophouse, meaning it to run for ten years. There is no written agreement and nothing is registered. A dispute later arises over how long the tenant is entitled to stay under the arrangement they made.

Which statement is correct?

  1. A. The verbal lease confers nothing at all, a lease of a shophouse requiring writing to exist.
  2. B. The verbal lease is good for the full ten years, a spoken term binding just as a written one.
  3. C. The verbal lease is good for a term of up to three years, not the ten years they intended.
  4. D. The verbal lease is good for seven years, that being the ceiling for an unregistered lease.
Show the answer and full explanation

Answer: C

The rule. A lease created only verbally is good for a term of up to three years. It cannot confer a longer term, however long the parties intended, because a longer lease must be made in writing.

Why C is correct. The parties meant a ten-year term but put nothing in writing. As a verbal lease it is good for up to three years only; the intended ten years cannot take effect.

The other options.

  • B gives the full ten years. A verbal lease cannot exceed three years.
  • A says it confers nothing. A verbal lease is valid up to three years.
  • D picks seven years. Seven years is the registration threshold, not the ceiling on a verbal lease.

Exam note. Verbal leases top out at three years. The seven-year figure is about registration, a different rule.

A lease created only verbally is good for a term of up to three years →

Question 2

Mr Chan is granting a lease of commercial premises for a term of nine years, including the period of an option to renew. His conveyancing clerk is unsure whether anything has to be done with the land register, given the length of the term.

Which statement is correct?

  1. A. The lease need not and cannot be registered, registration being confined to a sale of the land.
  2. B. The lease cannot be registered, only leases granted for the full statutory maximum being registrable.
  3. C. The lease must be registered under the Land Titles Act, its term exceeding seven years.
  4. D. The lease must be registered only if the tenant additionally lodges a caveat against the title.
Show the answer and full explanation

Answer: C

The rule. A lease for a term exceeding seven years — counting any option to renew — must be registered under the Land Titles Act. A lease of seven years or less need not be registered, though a caveat may optionally be lodged.

Why C is correct. The term, including the option to renew, is nine years, which exceeds seven. The lease must therefore be registered under the Land Titles Act.

The other options.

  • B confines registration to leases of the statutory maximum. Any lease over seven years is registrable.
  • A limits registration to a sale. Long leases are registered too.
  • D makes registration depend on a caveat. Registration is required by the length of the term itself.

Exam note. Over seven years — including the option to renew — means register. Seven or under means registration is not required.

A lease of seven years or less need not be registered →

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