If the land is registered:
Leases are capable of being legal (s.1 LPA 1925)
To be legal, it should have been created by deed, if not but there is an agreement in writing, containing the terms and signed by the parties, there may be an enforceable equitable equivalent.
If a deed was used, was it noted on the register to reflect what interests reflect the land (bear in mind the lease is for 3 years)
If for whatever reason this hasn't been complied with, look to equity.
Is there an enforceable equitable equivalent? If so, should a notice have been entered on the register? (Don't get notice confused with the doctrine of notice).
If not, look to actual occupation. On reasonable inspection of the property, would the purchaser have realised that someone was in actual occupation?
If the land is unregistered:
At law, it's very similar to that of registered land but only trigger events require first registration.
Equity, again is similar, however you should look to see if the interest could have been protected with a land charge.
Actual occupation does not apply to registered land.
In my experience, when it doesn't tell you whether or not the land is registered, the question wants you to consider both.