LEASES & TENANCY
LEASE
• Letting of a land for a term exceeding 3 years & is a
registrable interest.
• type of dealing where registered proprietor (lessor)
allows another person (lessee) to occupy the land for a
specific duration (consideration: rent payment).
• NLC requires parties to sign specific forms (must be
registered).
TENANCY
• Tenancy-letting of land for a term not exceeding 3
years and is not a registrable interest.
*Characteristic of a lease?
1. Given the right to exclusive possession of the land.
2. Parties must have intended to create a lease and not a
licence.
3. A lessee must be given a definite period.
Yong Tong Hong v Siew Soon Wah
- The landlord served a month notice to AP to quit
unless the AP (tenant) accept a new tenancy at an
increased rental.
- 1 year later, the landlord transferred the land to his
children, (RS).
- RS brought action to eject AP based on 2 grounds: it
was void for uncertainty- the term stated therein “the
tenancy shall be permanent” and void for lack of
registration.
- Held: No uncertainty as the parties has agreed for
some form of permanent letting. (S. 222(3) NLC) &
even an unregistered lease is void, it is good as an
agreement for a lease.
*Duration?
• Every lease or sublease must exceed 3 years;
- Min above 3 years and max up to 99 years (for whole
land).
- Min above 3 years and max of 30 years (if part of the
land).
- Min above 3 years and max of 30 years (if sublease).
• A lease less than 3 years is term as tenancy/ tenancy
exempt from registration.
*Power to grant lease under NLC?
• S. 221, 222. 223
*Formality?
• The parties must execute:
- Form 15A and register it at the relevant land office if it
is for a lease transaction.
- Form 15B and register it at the relevant land office if it
is for a sub-lease transaction.
- If lease or sub-lease relates to alienated land, must
attached a plan and description to enable to identified.
*General restrictions on powers?
• S. 225 NLC (refer)
• No lease or tenancy may be granted to 2 or more
persons otherwise as trustees or representatives.
• If the alienated land is subject to a charge, written
consent from the chargee must be obtained prior to the
creation of the lease or sub-lease.
• Such consent when obtained, must be signified when
executing the relevant instrument in Form 15A or Form
15B.
*Consent from chargee?
Murugappa Chetty v Low
- Chargee’s consent was not obtained in of 30 months
unregistered lease granted by the owner.
- When the chargee brought foreclosure proceedings
because of the chargor’s default, the court ordered the
lessee’s caveat to be removed.
- Held: Where any land subject to a charge, the
proprietor shall not be capable of granting any lease
without first obtaining the consent of the chargee.
*Express & implied provisions on the lessors’s part?
• To pay all rent due to the state authority.
• To guarantee quiet enjoyment of the property to the
lessee.
• During tenancy, if the property unfit for occupation not
by lessee’s negligence, the rent cease to be payable
until the property fit again for use (if remain 6 months,
the lessee may terminate by giving 1 month notice).
• To observe and perform all express or implied
conditions.
• Not to transfer the lease or sub-lease or part without
the written consent of the lessor.
• To pay the rent, rates, taxes in respect of the property.
Khoo Ee Liang v Henry Waugh Ltd Margaret Chua v Ho Swee Kiew & Ors

- The lessor claimed from the lessee the sum of
RM38118.78 which he had paid as rates and taxes to
the authorities.
- Held: In the absence of any agreement to the contrary,
all rates and taxes are payable by the lessee and
consequently the lessor was entitled to recover the said
sum from the lessee.
*Determination of lease?
• Express surrender.
- Lease may be terminated before the original
termination by landlord agree to surrender the lease.
- Effected by an instrument in Form 15C.
- Must obtain written consent from the chargee.
• Expiry of term.
- S. 240, S. 313
- Upon expiry of the term of tenancy exempt from
registration, endorsement made on the RDT may be
cancelled.
- AP (registered prop) granted to the RS a lease over a
shophouse for a term of 25 years at the rental of
RM280 per month.
- The lease was not registered, and AP wanted to sell the
premised and offered the RS to purchase the premise at
RM90,000 within 3 days.
- RS claimed for specific performance, AP appeal on the
ground that the lease was not registered.
- Held: Although the lease was not registered, but it’s a
valid as an agreement for a lease and can be enforced
in equity by specific performance.
Wan Salimah v Mahmood bin Omar
- PF entered into a lease agreement with DF who lease
his share in land with PF for 15 years for rental of
RM1800 per year.
- The lease was not registered, DF refused to sign Form
15A.
- Held: The lease was good as an agreement enforceable
in equity and ordered the Def to sign the Form 15A.

• Service of notice to quit. *Difference between lease and licence?

- Issue by one party to another
- Notice must express an unconditional intention to LEASE LICENCE
terminate the lease of a certain date.
Creates interests in land. Does not create interests in
• Operation of law. land but a personal
- Where there has been a frustration of the contract. obligation.
- Eg : Compulsory land acquisition by the government.
Exclusive possession of the Right to occupy
• Forfeiture. land.
- When the landlord is given the right to terminate the
lease upon the violations of certain terms and Dispossession entitles the Compensatable in breach
conditions. lessee to recover possession with damages.
- S. 234, 235 NLC (refer) of the land.
- Forfeiture is affected either by re-entry of the land or
action in the court. A right in rem A right in personam
- Eg : failure to pay rent, unlawful use of the premise.

*Effect of unregistered lease? Woo Yew Chee v Yong Yong Hoo

• If unregistered will still create a lease relationship
between lessor and lessee.
• Such lease stands as an equitable lease.
• Confers only a right in personam and not a right in
rem.
• Parties may sue for breach of provisions.
- Court test: the nature and quality of occupancy whether
it was intended that the occupier should have a stake in
the premises sub-let or whether he should have only a
personal privilege.
- Court will look at the arrangement between parties and
their intention.
TENANCY EXEMPT FROM REGISTRATION Mok Deng Chee v Yap See Hoi

• Tenancy not exceed 3 years. - RS were the owners of a house.

• Not registrable under NLC.
• Can be created by word of mouth or in writing.
• The interests of the tenant may be protected against
subsequent dealings is by RDT under s. 316 NLC.
• Failure to endorse the TER would not bind any
subsequent tranferee, chargee, sub-lesee of the land.
Than Kok Leong v Lo Kim Hai
- Held: TER does not bind a subsequent purchaser
unless prior to the sale and transfer, an endorsement of
the tenancy has been made pursuant to s. 213(3).
- The house was subsequently sold to the AP’s father
which inherited by AP and continued paying the
ground rent of one dollar.
- AP demolished the house and built a completely new
house.
- The parties started to quarrel and RS served on AP a
notice to quit.
- Held: No written agreement between the landowners
and the house owners regarding the tenancy is
immaterial. Payment of rent shows there is tenancy.
- The equity is not lost by the changes made to the house
not by the changes in its relationship.

Luggage Distributors Sdn Bhd v Tan Hor Teng *Tenancy with estopple?

- AP (registered prop) of a property ground floor rented • Invoked by the landlord against the tenant.
out to the RS. • S.116 of the Evidence Act: no tenant be permitted to
- Terms of the rental- 2 rears + further 2 years option. deny his landlord’s title.
- No endorsement of the tenancy on the RDT. • 2 conditions: Possession & permission.
- AP entered into agreement to sell the property.
- RS exercised option to renew and entered a private Wee Tiang Yap v Chan Chan Bros
caveat on the RDT. Singma Sawmill Co. Sdn. Bhd. v Asian Holdings Sdn. Bhd.
- Held: S. 224(b) prohibits any option for renewal from
being considered in determining the length of time. 
TER is not a registrable interest-not qualify as
caveatable interest.

*Tenancy coupled with equity?

• A tenant spends his money to improve the land with an

expectation of being able to remain on the land.
• If the landlord serves a notice to quit, the tenant may
plead a doctrine of tenancy coupled with equity.
• The landlord is estopped from terminating the tenancy
until he has satisfied the tenant’s equity either:
1. By giving more time for the tenant to be in
possession of the land.
2. To compensate the tenant.

Inwards v Baker

- Held: if the owner of land requires or allows another,

to expend money on the land under the expectation
that he would be able to remain there, that raises an
equity in the licence such as to entitle him to stay.