Oral short lease at a market rent creates a legal lease (LPA 1925 s.54(2))

Section 52(1) of the Law of Property Act 1925 requires a deed to create a legal estate, but s.52(2)(d) excepts leases not required by law to be made in writing. Section 54(2) provides that nothing in the preceding provisions affects "the creation by parol of leases taking effect in possession for a term not exceeding three years" at the best rent reasonably obtainable without taking a fine (a premium). Kwame's lease meets each condition: it is for exactly three years, it took effect in possession immediately, it is at the best rent, and no premium was paid. It is therefore a legal lease even though it was made orally. Because it is a grant of the lease itself, not a contract to grant one, the writing requirement for contracts does not arise, and s.2(5)(a) of the 1989 Act in any case excludes contracts to grant such short leases. A three-year lease is not a registrable disposition.

Why A is wrong: The deed requirement in s.52(1) does not apply to leases within s.54(2), which can be created orally at law.

Why B is wrong: Section 54(1) yields to the express exception in s.54(2) for short leases at the best rent in possession.

Why D is wrong: Section 2 of the 1989 Act governs contracts, not the grant itself, and s.2(5)(a) excludes contracts for s.54(2) leases anyway.

Why E is wrong: Only leases of more than seven years (and certain others) must be completed by registration; a three-year lease is not one of them.