WHAT ARE THE ELEMENTS OF LEASE

WHAT ARE THE ELEMENTS OF LEASE

A lease, demise, or tenancy is the transfer by the owner to a third party of the right to occupy all or a portion of an estate for a certain period of time while the owner retains a reversionary interest in the property. As a result, a relationship between the two parties is established through the signing of a lease or tenancy agreement.

The individual who receives the right to possession is referred to as the Tenant or Lessee, whereas the person who owns the property is referred to as the Landlord or Lessor.

A lease or tenancy may end when the defined time for which it was given expires, when the notice to vacate expires, or if it is forfeited.

When the predetermined period for which it was granted expires, when the notice to depart expires, or if it is forfeited, a lease or tenancy may come to an end.

FOR A LEASE TO BE VALID, UNDER THE LAW THE FOLLOWING ESSENTIAL ELEMENT MUST BE PRESENT CERTAIN

EXCLUSIVE POSSESSION TO THE TENANT

One of the key conditions of a lease is exclusive possession. The fundamental element of every leasehold arrangement is exclusive possession. What distinguishes a lease from a licence is the right to exclude all other parties, including the landlord, from the demised premises: 1 All ER 149 in Earington v. Earington (1951). This gives tenants the authority and vests them with the ability to protect their proprietary interests from third parties even when the landlord is not present.

CERTAINTY OF PARTIES

The parties to a lease must be legally capable of entering into the lease. The parties may be natural or juristic; in any case, they must be capable of suing and being sued. The individual who accepts the exclusive use of the demised premises is known as the lessee or tenant, while the owner of the property who makes the grant is known as the lessor or landlord. When a woman is the lessor, she is frequently referred to as a landlady.

A person's status as a landlord or landlady only indicates that he has the authority to permit another person to use the property; it does not imply that he is the estate's owner. This is due to the fact that just the right to use and occupy the property is being transferred, not the title to it.

CLEAR DESCRIPTION OF PROPERTY

A lease must include a description of the property. This was held in United Bank for Africa Plc v. Tejumola & Sons Ltd (1988) 2 NWLR (pt 79) 662. Here, the land or any interest in the land that is demised is the property. It might be for residential or commercial purposes. The intention of the parties must be ad idem in order to establish a leasehold relationship with the lessor's right of reversion.

This agreement is significant because, in addition to being considered an estate, a leasehold interest or relationship is also viewed as a contract, and a contract requires that all parties completely agree to its terms.

CERTAINTY OF TERM

In leases, a specific term is crucial. This means that a lease must grant a clear term, the duration of which is determined by the commencement date and the expiration date, both of which must be present. It is recommended that the beginning and ending dates be specified in detail. A specific start and a specific finish are required. The lease cannot last forever: Applying Lace v. Chantler, KB 364 (1944).

The conditions under which each party is obligated must be made very clear. These also cover each party's responsibilities and rights under the lease or tenancy agreement. In the event these are absent i.e. not provided in the agreement, the law of tenancy of the place where the land is located will apply as well as common law rules.

It is usually advisable for parties to precisely and carefully specify the parameters that govern the agreement because the law's provisions might not favour one party more than the other, or even both.

COMMENCEMENT DATE

Where the commencement of a lease is explicitly stated in the lease, no problem arises on its date of commencement. If the commencement date can also be reasonably inferred from the words used in the instrument creating the lease, the lease could be said to have a commencement date. In the cases of Okechukwu v Onuoha and Bosah v Oji, the question arose as to whether leases that had no commencement date, but which were said to commence on “the day the Onitsha Local Government Council issued to the lessees a certificate of occupancy in respect of the premises”, had valid commencement dates?

The court answered the question in the affirmative. The court reasoned that the commencement date which was dependent upon the occurrence of a future contingency (issuance of a certificate of occupancy) was valid and the lease became absolute and enforceable the moment the event in question occurred.

FORMALITIES

This only states that compliance is required where the applicable legislation specifies the manner in which the relationship shall exist, such as in writing, via deed, etc. In Nigeria, for example, a lease for a period of three years or more is expected to receive the governor's approval or authorization (i.e. about lands in metropolitan areas), failing to which deems such an arrangement void.

PAYMENT OF RENT

This implies that the tenant must pay for the use and occupation of the property in advance. The payment can either be monetary or in kind. The lease agreement must expressly indicate this.

THE RIGHT TO REVERSION

The landlord has the right of reversion of the property after the expiration or termination of the lease. This means that the landlord retains the ownership of the property after the lease. After the lease expires or is terminated, the landlord has the right of reversion of the property. This indicates that even after the lease has ended, the landlord will still own the property.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com

WRITTEN BY CHAMAN LAW FIRM TEAM

EMAIL: chamanlawfirm@gmail.com

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