A lease for three years or less may be created verbally or by writing, provided the rent is substantial, that is, at least two-thirds of the full annual value of the land.

All other leases must be by deed. - By the Statute of Frauds, a lease must be in writing (unless it is for not more than 3 years as above) and a mere verbal lease takes effect as a tenancy at will only (d).

If the tenant pays rent, it will therefore become a yearly tenancy.

By the Real Property Amendment Act, 1845 (e), all leases which are required by the Statute

(c) Right v. Darby, 1786, 1 T.R. 159, at p. 163.

(d) 29 Car. II. c. 3, ss. 1 and 2. (e) 8 & 9 Vict. c. 106, s. 3.

of Frauds to be in writing, must be by deed, otherwise they are void at law.

Thus if a lease for more than three years is in writing, but not sealed, it is void " at law." It may, however, be enforced in equity as an agreement for a lease, for equity treats that as done which is agreed to be done.

Hence the present law in case of a lease for more than three years is as follows: -

(1) If it is verbal - it creates a lease at will only and cannot be enforced even in equity.

Unless there has been some definite act of part performance of the lease which proves that there must have been some agreement to grant a lease, or unless there was fraud which prevented the lease from being put into writing.

(2) If it is in writing - it does not give the tenant the legal estate; but he has an equitable estate in the lease, because equity will grant him specific performance of the landlord's agreement to give him a lease.

(3) If it is by deed - the tenant gets the legal estate for the term created by the lease.

Walsh v. Lonsdale (1882), 21 Ch. D. 9.

In 1879 L agreed in writing to lease a mill to W for 7 years, the rent to be paid in advance. W took possession and paid rent quarterly.

In 1882 L demanded 1000, partly for rent already due and partly for rent in advance.

W claimed that the lease was void at law, and that he . merely became a tenant at will, and having paid rent quarterly he was now a tenant from year to year, so that he was only liable for so much of the rent as was in arrear.

L claimed that as the lease was in writing either party was entitled to specific performance of the agreement for the lease contained in the writing, and that he was entitled to rent in advance.

Held, both parties must be treated in equity in the same way as if the lease had been actually granted, and L could claim rent in advance.

A lease should always be under seal if for more than 3 years.

The student may wonder why a lease should ever be granted by deed, if a mere written lease can be enforced. The reason is as follows: -

When two innocent persons are defrauded by the owner of land, the person who has the legal estate will have the better title, by reason of the equitable maxim that "where equities are equal, the law prevails."

Thus if A by an unsealed writing grants a lease to B for 99 years at a premium of 1000, and afterwards grants by deed a. lease to C of the same land on the same terms, and C has no-notice of the lease to B, C will have the better title to the lease.

Iateresse Termini. - The grant of land for a term of years does not create a lease until the "lessee" takes possession.

Thus if A grants a lease for 21 years to B, and then grants a lease for 10 years to C to take effect after the end of B's lease, C cannot enter while B's lease lasts, and C has therefore merely an interesse termini, and has no estate in the land. The chief defect of this is that C cannot distrain for rent due from B (f).

Since the Statute of Uses, a lessee may be deemed to have taken possession without actual entry if the land is granted to the use of the lessee for a term of years.

Lease by Estoppel. - If a person who has no estate in a certain piece of land, purports to grant a lease of that land to another, the lease is of course invalid; but if the grantor afterwards

(f) Lewis v. Baker, [1905] 1 Ch. 46.

acquires the land, he is "estopped" or prevented from claiming that the lease was void.

Thus, in 1880 A granted to B for 20 years land which then belonged to A's father. In 1890 A's father died having devised the land to A in fee simple. A could not after 1890 say that the lease to B was bad, and as no one else had any right to the land, B, in effect, got a lease for the remaining 10 years " by estoppel," and it became an actual legal lease.

But if the lessor had some interest in the land at the time of granting the lease, there is no estoppel (g).

Thus, in the last example, if before 1880 A's father had granted to A a lease of the land for 20 years, then, on the death of the father, A would not be estopped, and B would not have a legal lease.

B however would not be without a remedy, for he could sue A for specific performance of his agreement to grant him a lease.