Q. (a) What is a lease? How is it created?

(b) How and under what circumstances may a lease be terminated?

(c) What is the effect of holding over? [2020]
(a) Ans. Definition of Lease: Page | 1

According to Section 105 of the TP Act, a lease is a transfer of a right to enjoy immovable
property, made for a certain time, either expressed or implied, or in perpetuity, in consideration
of a price paid or promised, or of money, a share of crops, service, or any other thing of value, to
be rendered periodically or on specified occasions to the transferor by the transferee, who
accepts the transfer on such terms.
Creation of a Lease:
The creation of a valid lease is governed by Section 107 of the TP Act. It states that a lease of
immovable property can be created in two ways:
Registered Instrument: Leases for a term exceeding one year, from year to year, or reserving a
yearly rent must be created through a registered instrument. This means the lease agreement
must be documented in writing and registered with the appropriate authorities.
Unregistered Instrument or Oral Agreement: The government, through notification in the
official gazette, can allow leases for less than a year, not reserving a yearly rent, or belonging to
a specific class, to be created through unregistered instruments or oral agreements without
delivery of possession.
Real-life examples:
Renting an apartment: When you rent an apartment, you enter into a lease agreement with the
landlord. This agreement specifies the duration of the lease, the rent amount, and the rights and
responsibilities of both parties.
Agricultural leases: Farmers often lease land from landowners to cultivate crops. These leases
can be oral or written, depending on the duration and terms agreed upon.
Commercial leases: Businesses lease office space, warehouses, and other commercial properties
for their operations. These leases are typically formal agreements drafted by legal professionals.
Relevant Sections:
Section 105: Definition of Lease
Section 107: Mode of creating a Lease
Section 111: Determination of Lease
Section 114: Rights of a Lessee
Section 116: Obligations of a Lessee
(b) Ans.
Modes of Termination:
The TP Act outlines various ways a lease agreement can be terminated. Some of the key methods Page | 2
include:
Follow section 111 of the Transfer of Property Act, 1882.
Circumstances for Termination:
The specific circumstances under which a lease can be terminated depend on the nature of the
lease agreement and the applicable provisions of the TP Act. Some of the common reasons for
termination include:
Non-payment of rent: This is a fundamental breach of the lease agreement and can be grounds
for forfeiture by the landlord.
Damage to the property: The tenant has a duty to use the property responsibly and avoid causing
damage. Excessive damage can be a basis for termination.
Violation of other lease terms: This can include unauthorized subletting, engaging in illegal
activities, or exceeding the permitted number of occupants.
Mutual agreement: As mentioned earlier, both parties can agree to terminate the lease at any
time, even if the original term has not expired.
Frustration of contract: In rare situations, unforeseen circumstances may make it impossible for
the lease agreement to be fulfilled. This can be a ground for termination by either party.
Real-life examples:
A landlord terminates a lease due to the tenant’s persistent failure to pay rent.
A tenant terminates a lease early due to a job relocation requiring them to move to another city.
A court orders the termination of a lease after the property is damaged by a natural disaster.
A landlord and tenant agree to terminate the lease early to allow for renovations to the property.
(c) Ans. In Bangladesh, the legal concept of “holding over” applies when a tenant remains in
possession of leased property after the expiration of the original lease term. This situation can
have significant legal consequences for both the landlord and tenant.
Relevant Section:
Section 116 of the Transfer of Property Act, 1882 (TP Act) governs the effect of holding over.
Interpretation:
According to Section 116, if a tenant holds over after the lease expires and the landlord accepts
rent or otherwise assents to the tenant’s continued possession, the lease is deemed to be renewed
automatically. The type of renewal (month-to-month or year-to-year) depends on the purpose for
which the property is leased, as specified in Section 106 of the TP Act. Page | 3

Real-life examples: A tenant continues to live in an apartment after their one-year lease
expires. The landlord accepts rent payments each month for several months. In this case, the
original lease is deemed renewed on a month-to-month basis.
A farmer continues to cultivate land after their five-year lease expires. The landowner allows the
farmer to continue using the land and accepts annual payments. In this case, the original lease is
deemed renewed on a year-to-year basis.
Consequences of Holding Over:
Holding over can have several consequences for both parties:
For the Tenant:
The tenant is obligated to continue paying rent at the same rate or at a rate agreed upon with the
landlord.
The tenant remains bound by the terms of the original lease, including any restrictions on use of
the property.
For the Landlord:
The landlord can continue to receive rent and enjoy the benefits of property ownership.
The landlord may be able to terminate the lease with a shorter notice period than the original
lease required.
The landlord may be able to increase the rent at the start of each renewal period.
Important Considerations:
Acceptance of Rent: The key factor determining renewal is the landlord’s acceptance of rent. If
the landlord accepts rent from the tenant after the lease expires, it signifies their consent to the
continued tenancy.
Express Agreement:
The parties can also enter into a new agreement explicitly stating the terms of the renewed lease.
Intention:
The intentions of both parties play a crucial role in determining whether or not the lease is
renewed.

Q. (a) Define mortgage. What do you mean by usufructuary mortgage? Distinguish

Page | 4
between simple mortgage and English mortgage.
(b) What is the nature of the right of redemption? Who can redeem? Who does the right of
redemption arise? [2020]
(a) (1) Ans. Mortgage:
Definition:
A mortgage is a transfer of an interest in immovable property for the purpose of securing the
payment of money. In simpler terms, it is a loan secured by property. The borrower pledges the
property as collateral to the lender, and if the borrower fails to repay the loan, the lender can take
possession of the property and sell it to recover the debt.
Relevant Section:
Section 58 of the Transfer of Property Act, 1882 (TP Act) defines different types of mortgages.
Real-life example:
Asma borrows BDT 50 lakhs from a bank to buy a flat. She mortgages the flat to the bank as
security for the loan. If Asma fails to repay the loan, the bank can sell the flat to recover its
money.
(2) Ans. Usufructuary Mortgage:
Definition:
An usufructuary mortgage is a specific type of mortgage where the mortgagee (lender) is given
the right to possess and enjoy the benefits of the mortgaged property until the loan is repaid. The
mortgagee receives the income generated from the property, such as rent, as part of the loan
repayment.
Relevant Section:
Section 58(c) of the TP Act defines usufructuary mortgages
Real-life example:
Rahim mortgages his agricultural land to Karim to secure a loan. As per the usufructuary
mortgage agreement, Karim takes possession of the land and collects the crops until Rahim
repays the loan. The income generated from the crops goes towards reducing Rahim's debt.
(3) Ans. Distinction between Simple Mortgage and English Mortgage:
Simple Mortgage:
The mortgagor (borrower) retains possession of the mortgaged property.
The mortgagor conveys only the ownership title to the mortgagee as security for the loan. Page | 5

The mortgagor remains responsible for taxes and maintenance of the property.
The mortgagor is entitled to any income generated from the property
English Mortgage:
The mortgagee takes possession of the mortgaged property until the loan is repaid.
The mortgagor transfers both ownership title and possession to the mortgagee.
The mortgagee becomes responsible for taxes and maintenance of the property.
The mortgagee is entitled to any income generated from the property, which is used to offset the
interest on the loan.
Real-life example:
Farida mortgages her house to a bank with a simple mortgage. She remains living in the house
and is responsible for its upkeep. The bank only holds the title to the property as security.
In contrast, Jamal mortgages his land to an investor with an English mortgage. The investor takes
possession of the land and collects rent from the tenants. The rent payments are used to pay off
Additional Notes:
The choice between a simple mortgage and an English mortgage depends on the specific needs
and circumstances of the borrower and lender.
Both types of mortgages are subject to the provisions of the TP Act and other relevant laws in
Bangladesh.
It is crucial to seek legal advice from a qualified professional when entering into any type of
mortgage agreement.
(b) Ans.
Nature of the Right of Redemption:
The right of redemption in Bangladesh is a statutory right granted to a mortgagor (borrower)
under the Transfer of Property Act, 1882 (TP Act). It allows the mortgagor to reclaim their
mortgaged property by paying the outstanding mortgage debt and any associated costs.
Relevant section:
Section 60 of the TP Act states the right of redemption as follows:
"The mortgagor has the right, at any time after the principal money has become due, to redeem
the mortgaged property, and to require the mortgagee, on payment or tender of the mortgage
money, to deliver to the mortgagor the mortgage-deed and every document relating to the
mortgaged property that is in the possession or power of the mortgagee." Page | 6

Persons who can redeem:

Only the mortgagor or their authorized representative can exercise the right of redemption. Third
parties, such as creditors, cannot redeem the property unless they have a subrogation right.
When Does the Right of Redemption Arise?
The right of redemption generally arises when the principal mortgage debt becomes due.
However, it can also arise in other situations, such as:
Default in payment of interest: The right of redemption may arise if the mortgagor defaults on
interest payments, depending on the terms of the mortgage agreement.
Breach of other conditions: The right of redemption may arise if the mortgagor breaches any
other covenants or conditions stipulated in the mortgage agreement.
Real-life examples:
A homeowner takes a mortgage to purchase a house. If they default on the mortgage
payments, the lender may initiate foreclosure proceedings. However, the homeowner has the
right to redeem the property by paying the outstanding debt and associated costs before the
foreclosure sale is finalized.
A farmer receives a loan from a bank against their agricultural land. If the farmer fails to repay
the loan, the bank can take possession of the land. However, the farmer can redeem the land by
paying the outstanding debt and any interest within a specified timeframe.