LEASES TO BE BY DEED.

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LETTER XIX.

It now comes in order to give you a few instructions as to Leases. What I have to say on this head will lie in a narrow compass.

Leases not exceeding three years from the time of making them, whereupon the reserved rent amounts to two-thirds of the improved value, may be granted by parol, or word of mouth; but all other leases must be in writing, according to the provisions of the Statute of Frauds which I have before mentioned, and so must an agreement for a lease, however short the term; although here, as in the case of purchases, equity will, in some instances, for which I refer you to my 8th Letter, enforce even a parol agreement to grant a lease. To this, however, a party should not trust.

By a recent statute,* leases required by law to be in writing are made void at law unless made by deed. Therefore, as with the exception of leases not exceeding three years at a rent equal to two-thirds of the value, all leases must have been made in writing, now they must be made by deed; and assignments and surrenders of leases (not being of a copyhold interest) are equally required to be by deed. There are exceptions which would only puzzle you if I were to attempt to explain them. It will be sufficient for you to know that you cannot safely grant or accept a lease, or an assignment, or surrender of one, without a deed.

This alteration of the law has led to much embarrass

* 8 & 9 Vict., c. 106.

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ment. The judges felt the difficulty of holding a lease in writing, but not by deed, to be altogether void, and consequently decided that, although such a lease is void under the statute, yet it so far regulates the holding that it creates a tenancy from year to year, terminable by half a year's notice; and if the tenure endure for the term attempted to be created by the void lease, the tenant may be evicted at the end of the term without any notice to quit.

If an agreement, not by deed, for a lease for a term of years, to begin at a future day, were made, and it were to be construed to be a lease, it would of course be void under the statute, and the intended tenant could not force the landlord to give him possession at the time when the lease was to commence, for he would be entitled to possession only on a tenancy for the years agreed upon, and that tenancy never commenced; but it was said that the party might proceed upon the agreement to grant such a lease. This will show you the difficulty which may arise upon an informal agreement since the statute; for before the statute, if the writing, not under seal, was held to be a lease and not an agreement, still it was in favour of the intention, as collected from the instrument, and it did operate as a lease; but now in a like case, the intention, as collected, does not create the lease, but destroys the instrument.

A court of equity has, however, held that an agreement not under seal, yet amounting to a lease in terms at law although void at law, not being by deed-may be specifically enforced as an agreement upon the terms stated; and although the informal instrument may be so framed that it would have operated as an actual lease if it had been by deed, yet if it contains an agreement that a lease shall be granted, an action at law may be maintained for breach of the agreement. The legisla

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tive alteration, which was not called for, has led to serious difficulties.

An agreement for a lease, like an agreement for purchase, must contain the names of the parties, the consideration-viz., the rent, and also the property to be demised, and for what term. The parties must sign the agreement by themselves or their agents, in like manner as an agreement for a purchase. And the caution which I before gave you, in regard to writing letters about the sale or purchase of an estate, applies equally to leases. I must observe that nothing can be added to an agreement of this kind by parol or verbal evidence: you cannot, for instance, if the agreement is silent on that head, show that the tenant agreed verbally to pay the land-tax. The parties must stand or fall by the written agreement. Therefore, whatever the terms are upon which you agree, you must reduce them to writing.

If you should ever be under the necessity of entering into an agreement to grant a lease, without the assistance of your solicitor, insert an express declaration that it is meant to be an agreement, and not an actual lease. It has frequently happened, that what was intended by the parties as an agreement only, has been construed to be a lease, by which means the tenant has evaded the conditions which would have been imposed on him if a regular lease had been granted.

The law is not altered by the recent statute to which I have before referred.* What before the statute would have been a lease, although in form an agreement, will still be so construed, although, if not made by deed, the consequence may be, as I have already shown to you, that it will be void at law.

It is highly desirable that agreements for leases should contain a minute of the covenants to be entered into by * 8 & 9 Vict., c. 106.

N

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INSURANCE. OPTION TO RENEW.

the tenant. Disputes frequently arise as to the covenants to which the landlord is entitled. If you wish your tenant not to part with a lease without your consent, you should stipulate by the agreement that a proper clause for that purpose shall be contained in the lease, because you cannot insist upon such a restraint unless it is bargained for.

If you agree to grant a building-lease, the tenant must engage by the lease to insure the property, although the agreement was silent on that head; but the rule is otherwise as to tenants at a full rent, or, as we term it, a rack-rent. If, therefore, you mean that a tenant at rack-rent shall insure at his own costs, you must make him agree to do so by the contract. If you omit this, the lease should be so framed as to exempt him from making good accidents by fire. But even in this case you are not bound to insure; and although the house should be burned down, yet the tenant must continue to pay the rent: so that each bears his burden; you lose your house, and the tenant loses his rent during the term. It is material, however, to observe, that whatever may have been the agreement, unless the tenant is exempted by the lease from making good accidents by fire, he must, under the common covenants to repair, rebuild the house if it is burned down.

If you agree to grant a man a lease, and he afterwards says that he is merely a trustee for an insolvent who claims the lease, you are not bound to grant it.

It may be useful to state that if you grant, or even agree to grant, a lease, to hold for seven or fourteen, or any other number of years, in the alternative, the option to determine the lease at the end of the first term mentioned is in the tenant, and not in you; therefore, if this is not your intention, you should expressly provide by

the agreement, or lease, that the option shall be in you as well as the tenant.

You should always, before granting a lease, consider what interest you have in the estate. If you are merely tenant for life, without a power of leasing, you must not grant a lease beyond your own life. If you have only a power to grant a lease, which is the case with every man whose property is settled on his family, you should communicate that circumstance to your solicitor, and furnish him with a copy of the power, because a very slight deviation from it may render the lease void, by which you may not only ruin your innocent tenant, but may, by the covenant which you must enter into with him for quiet enjoyment of the land, subject your estate to make good his loss in case he is evicted by the person entitled to the estate after your death. This has too frequently happened. A painful instance is recorded in our law reports. A man and his wife settled her estate to certain uses, with a power of leasing to him. They then, under a power in the settlement, gave the estate, after their deaths, to another. The husband granted a lease under his power, and died. The person to whom the appointment had been made took advantage of a defect in the lease, and turned out the tenant, who recovered his loss out of the husband's estate, under a covenant entered into by him for quiet enjoyment; so that his property suffered severely by the act of the person to whom he had joined, with his wife, in giving

the estate.

If you are restrained by your power from taking a fine on granting a lease, you must not accept any sum whatever from the tenant. But, although you are required to reserve the best rent which can be obtained, yet you are not compellable to take the highest actual offer for a lease, provided you act bonâ fide, and reserve