⇒ In general, parties to a right in rem can opt for that right to operate in an in personam basis (i.e. as a personal right between the contracting parties, rather than as a proprietary right that binds third parties). For example, in IDC Group v Clark [1992], the parties wanted an easements to only have contractual effect.

⇒ For a time, this applied to leases e.g. even if the content requirements of a lease are fulfilled the parties could stipulate they wanted a licence instead.

⇒ However, in Street v Mountford [1985], the House of Lords ruled that an arrangement involving exclusive possession, rent and term is necessarily a lease i.e. if it fulfilled the content requirements of a lease it can only br a lease, even if the parties call it a licence.

• One exception to this is where exclusive possession is (i) based on charity or friendship; or (ii) referable to an employment contract between landowner and occupier.

⇒ Only leaseholders (i.e. not licence holders) have access to statutory protection e.g. the Rent Acts will only apply to leaseholders and not licence holders.

⇒ Before Street v Mountford [1985], lawyers tried to dodge the rent acts (and, therefore, circumvent obligations landlords would have for their tenants) by labelling an occupation agreement as a licence. This is now no longer possible.

⇒ Landowners/lawyers try to sidestep the Rent Acts now by drafting occupation agreements denuing the occupant the right to exclusive possession by:

1. Conferring occupation on multiple people (this would, therefore, not satisfy the 'unities' necessary to confer exclusive possession).
2. Reserve himself or a 3rd party the right to enter into occupation of the land.
3. Reserve himself extensive access to the land e.g. for cleaning/repairs.

⇒ Lord Templeman in Street v Mountford [1985] said the court should "be astute to detect and frustrate sham devices" designed to avoid granting tenancy and to evade the Rent Acts.

⇒ In Antoniades v Villiers [1988] the House of Lords held a contractual provision is a pretence if:

1. It does not reflect "the substance and reality" of the transaction.
2. It was "never seriously intended in fact".
3. The parties do not regard it as a provision "to which any effect would be given".

⇒ Any contractual provision held to be a pretence is removed from the occupation agreement so the 'true agreement' can be revealed.

⇒ Inferred intent:

• The court have been prepared to infer that the parties (more specifically, the landowner) never actually intended to act upon the sham provision (i.e. the pretence).
• The factors the court takes into account when inferring intention are: (i) the layout of the property; and (ii) the way the agreement operated in practice.

⇒ For example, in Antoniades v Villiers [1988], there was a provision for sharing occupancy in future. The property only had one bedroom so the clause seemed surprising. The court therefore inferred the landowner never actually intended to act upon the pretence.

⇒ In Aslan v Murphy [1990] there was a clause for extensive access to the land for the grantor, but the court inferred there was no intent to act upon the provision as no services were provided in practice (so it was a pretence).

⇒ The court will conclude a lack of joint tenancy is a pretence if at the time of contracting the landowner intended to confer rights on multiple occupants as a single unit. They will infer this intention if at the time of contracting the multiple occupants were an interdependent entity and the landowner knew this to be the case (in other words, if the occupants knew each other at the time of contracting and the landlord knew this, the court will infer an intention to create a joint tenancy e.g. in Antoniades v Villiers [1988] a couple were regarded as an interdependent entity).

⇒ In AG Securities v Vaughan [1988], the House of Lords held the 4 occupiers were not interdependent and therefore their lack of joint tenancy was not held to be a pretence, thus no lease found (this is a good contrast to Antoniades v Villiers [1988]).

⇒ Make sure you understand why people want to circumvent the Rent Acts.

⇒ Some other helpful legal resources on pretence:

• Quizlet: Pretence
• Lease or licence?