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SQESalespersons Qualifying Examination✓EAQEEstate Agents Qualifying ExaminationMr Leung's mortgage forbids letting without the bank's consent. He lets the flat to Ms Tsui without asking the bank. Later the bank, which has title paramount, takes action for possession. What is Ms Tsui's position?
Answer: She was a tenant by estoppel as against Mr Leung only, and has no right to stay against the bank. Why not the others: - Good faith protects her against the bank: The bank's title is paramount and the letting breached the mortgage. - The bank must grant a new tenancy: The bank is not obliged to accept her. - No rent from the start: As between them, she cannot deny Mr Leung's title and must pay him rent while in occupation. Rule: Where a mortgagor lets without the mortgagee's required consent, the tenant is a tenant by estoppel; when the mortgagee asserts its rights, the tenant becomes a trespasser liable for mesne profits. Source: EAA, A Study Guide to Estate Agency Law and Practice, Part 7, para 9 (Typhoon 8 Research Ltd v Seapower Resources International Ltd [2001]); as at Oct 2026
Forgetting to check the landlord's mortgage for a no-letting clause.
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Start practising →An original question written to the published EAQE syllabus. Figures in the explanation carry their effective dates; check them against the current law before relying on them. Independent exam practice. Not affiliated with or endorsed by the Estate Agents Authority (EAA) or the examination administrator.