SQE1 leases: what you must know and how it is tested

SQE1 leases questions test how a lease is created, what remedies a landlord has and how covenants pass to new owners. The key difference from a licence is exclusive possession for a certain term. Read it with the wider Property Practice guide.

SubjectProperty Practice (FLK2)

Key lawLPA 1925; L&T (Covenants) Act 1995; LTA 1954

Question typeSingle best answer, five options

The rules to apply

A lease gives exclusive possession for a term that is certain (Street v Mountford). If there is no exclusive possession, it is a licence. A lease of more than three years must be made by deed (Law of Property Act 1925, s52). A lease of three years or less that takes effect in possession, at a market rent without a premium, can be oral (s54(2)). A written agreement for a lease, signed by both parties as s2 of the Law of Property (Miscellaneous Provisions) Act 1989 requires, can create an equitable lease (Walsh v Lonsdale). A lease of more than seven years must be registered, or it takes effect only in equity; shorter legal leases bind buyers as overriding interests.

Covenants. For leases granted on or after 1 January 1996, the Landlord and Tenant (Covenants) Act 1995 applies. On assignment, the original tenant is released from the covenants, though they may have to stand as guarantor for the new tenant under an authorised guarantor agreement (AGA). Landlord and tenant covenants pass with the lease. A covenant not to assign without consent is read as subject to consent not being unreasonably withheld (Landlord and Tenant Act 1927, s19(1)(a)), and a landlord must respond in a reasonable time (Landlord and Tenant Act 1988).

Forfeiture. The lease must contain a proviso for re-entry. For non payment of rent, a formal demand is needed unless the lease dispenses with it. For other breaches, a notice under s146 of the Law of Property Act 1925 is required. A landlord who accepts rent or otherwise acts as if the lease continues, after knowing of a breach, waives the right to forfeit for that breach. A once and for all breach is waived permanently; a continuing breach is waived only up to that time. The tenant can apply for relief from forfeiture. Residential premises cannot be forfeited without a court order (Protection from Eviction Act 1977, s2).

Business tenancies are protected by Part 2 of the Landlord and Tenant Act 1954 unless the parties properly contracted out before the lease was granted. A protected tenancy continues after its contractual end until it is ended in a way the Act allows, such as a landlord's s25 notice or a tenant's s26 request. The landlord can oppose a new tenancy only on the grounds in s30.

Traps examiners use

Treating an occupier without exclusive possession as a tenant.
Forgetting the deed requirement for leases over three years.
Saying the original tenant is always released on assignment. Check the AGA.
Ignoring the waiver of forfeiture by accepting rent.
Assuming business tenants have no security of tenure.

Worked question 1

Tamsin and Brian sign a written agreement for Tamsin to grant Brian a five year lease at a rent. No deed is made. Brian takes possession and pays rent. Which is correct?

A. No lease exists, because it was not made by deed.
B. Brian has a legal lease for five years.
C. Brian has an equitable lease, which can be enforced by specific performance.
D. Brian is merely a licensee.
E. Brian has a periodic tenancy only and no protection.

Answer: C. A lease over three years not made by deed is not a legal lease, but a specifically enforceable agreement is treated as a lease in equity (Walsh v Lonsdale). Brian paid rent and has exclusive possession, so D does not fit. A and B are wrong.

Worked question 2

Lena is the landlord of a commercial lease that contains a re-entry clause and a covenant not to assign without consent. The tenant assigns without consent. The landlord learns of this in January, then accepts the next quarter's rent in March. Which statement is correct?

A. The landlord can still forfeit, because the breach is serious.
B. The landlord has waived the right to forfeit for this breach, which was a once and for all breach.
C. The landlord has waived only if the rent was paid late.
D. Acceptance of rent never affects forfeiture.
E. The landlord must have served a s25 notice first.

Answer: B. A landlord who, knowing of the breach, accepts rent due after it has waived the right to forfeit for that breach. An unauthorised assignment is a once and for all breach, so the waiver is permanent. D is wrong, and E confuses forfeiture with renewal under the 1954 Act.

Checklist before you move on

Lease or licence: exclusive possession and certain term?
Formalities: deed over three years, registration over seven.
Which regime for covenants (pre or post 1996)?
Assignment: consent and AGA.
Forfeiture: proviso, demand or s146, waiver, relief.
Business lease: protected or contracted out?

Test yourself on more original questions in our SQE1 practice questions.

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Questions

What is the difference between a lease and a licence?

A lease gives exclusive possession for a certain term. A licence is permission to occupy without that interest in land.

What formalities does a lease need?

A deed for leases over three years, and registration at HM Land Registry if the term is more than seven years.

What waives a landlord's right to forfeit?

Accepting rent or doing another act that treats the lease as continuing, with knowledge of the breach.

Sources: SRA: SQE1 Assessment Specification (from 1 September 2026); Landlord and Tenant Act 1954; Landlord and Tenant (Covenants) Act 1995. Checked 10 November 2026.