Take care with your lease drafting. A Court of Appeal case from earlier in the year, which has only just been fully reported, held that where a lease, which had seemingly been contracted-out of the 1954 Act by court order, demised a term for a fixed period of time, but stated (accidentally, one assumes) that the expression “the term” included any period of holding over or extension whether by statute, or at common law or by agreement, the effect of the drafting was to prevent the lease from being a “term of years certain”. Accordingly, the contracting-out had failed. Ouch! Accidentally leaving in the extended definition of “the Term” is not uncommon when contracting-out. (Remember how the District Judge would reject your application for a court order if he/she spotted it?) The case is Newham LBC v Thomas-Van Staden [2008] EWCA Civ 1414, and will be considered in full in the CPI Update at the end of this month. Rimer LJ goes so far as to speculate, briefly, that the lease may be void for uncertainty.
Property PSL leases are drafted so as to demise premises for a fixed contractual term (as set out in clause LR6 if the lease is a prescribed clauses lease, or in a separate definition of Contractual Term if it is not). The extended definition of “the Term” is therefore only relevant to those covenants and other provisions of the lease which make reference to “the Term”, and, if accidentally left in as drafted, it does not impact upon the nature of the term which remains very much a term of years certain.