Nature, Creation, Types and Transfer of Leases

Nature, Creation, Types and Transfer
KAG - FLAW 210 - IMMOVABLE PROPERTY II -

NATURE, CREATION, TYPES AND TRANSFER
OF LEASES 1
What is a Lease?
A lease is an agreement to use
another’s land, usually for a specific
time in return for the payment of
rent.
It creates between the Lessor and
the Lessee the special relationship
of landlord and tenant.
OF LEASES 2
Features of a Lease
 Rent – the lessee should necessarily pay rent for the use of the
premises although it has been held that in certain
circumstances, a lease can exist without the payment of rent.
 Ashburn Anstalt v. Arnold [1989] Ch. 1
 It has also been held that rent can be in the form of transfer of
shares in a company.
 Adomako v. Enterprise Insurance Co. Ltd & Consortium House
Ltd [2011] 1 SCGLR 247
 The lease must be for a definite period. It must have a certain
beginning and a certain end.
 Leases in possession (commencing immediately) and leases in
reversion (commencing in the future).
OF LEASES 3
Features of a Lease
 The parties can agree on a lease for any period however long
or short though the lease may be terminated before the term
ends. Periodic tenancies are acceptable because the
maximum period for any such tenancy can be ascertained at
any time.
 Lace v. Chandler [1944] KB 368
 Prudential Assurance Company Limited v. London Residuary
Body [1992] 2 AC 386
 Exclusive Possession – the lessee must have exclusive
possession of the leased property. A person on land who is
not entitled to exclusive possession may be a licensee and not
a lessee.
 Street v. Mountford [1985] AC 809
 The landlord may however put restrictions on the way the
property is used.
OF LEASES 4
Distinction between a lease and a license
 The main distinction is the concept of exclusive
possession
 Street v. Mountford
 Addiscombe Gardens v. Crabbe
 Brutton v. London and Quadrant Housing Trust
 Exclusive possession connotes that the grantee has
been given general control over the property.
 Wells v. Hull Corporation
 Marchant v. Charters

OF LEASES 5
Distinction between a lease and a
license
 What if the grantor retains keys to the premises? Does
it negate exclusive possession? It will depend on the
reason for the retention of the keys.
 Aslan v. Murphy
 There are however cases where a person may have
exclusive possession but will still be a licensee. Such
cases arise through
 Acts of generosity, charity or friendship where there is
no intent to create legal relations.
 Heslop v. Burns
 Gray v. Taylor
OF LEASES 6
Distinction between a lease and a
license
 Service occupancies and duty post
accommodation.
 Crane v. Morris
 Ampomah v. VRA
 Occupancy prior to the completion of a contract

for sale.
 Street v. Mountford
OF LEASES 7
Creation of Leases
 Leases, being transfer of interests in land are to
be in writing.
 Section 1(1) and section 10 of NRCD 175
 Djan v. Owoo [1976] 2 GLR 401 – Exchange of letters embodying
all the relevant terms was held to be a valid lease.
 Exception – oral leases – section 3 (1) (f) of
NRCD 175 – a lease taking effect in possession
for a term not exceeding three years may not be
in writing.
 All essential terms of the lease must be included
in the agreement – parties clearly identified,
rent stated and duration determined.
OF LEASES 8
Doctrine of Part Performance
 Section 3(2) of NRCD 175
 Oral Lease
 An oral lease which is for a duration of more than three years
may be enforced in equity if it is followed by certain acts of
part performance that will make it specifically enforceable.
 Sackey v. Ashong (1956) 1 WALR 108
 Djan v. Owoo
 Sbaiti v. Samarisinghe [1976] 2 GLR 361
 Koglex Ltd. (No. 2) v. Field [2000] SCGLR 175
 Kotey v. Kolete [2005-2006] SCGLR 368
 Tahiru v. Mireku [1989-90] 2 GLR 616
 Sykes v. Abbey [1995-96] 1 GLR 81 (SC) – Not necessarily a lease
but the principle spot on.
OF LEASES 9
 In Kotey v. Kolete, the Supreme Court restated
the requirements for an act of part performance in
equity which are as follows:
 The act must be referable to the contract alleged and
no other title;
 It must be such as to render it a fraud in the defendant
to take advantage of it not being in writing;
 the contract in its own nature must be enforceable by
the court;
 there must be proper parole evidence of the contract.
 See also Tahiru v. Mireku
OF LEASES 10
 Agreement for a Lease
 Where an agreement for a lease which contains all the essential
features of a lease is not being performed by one of the parties, the
court may order specific performance in appropriate cases. Equity
sees as done that which ought to be done.
 That agreement must be in writing (S. 2 of NRCD 175) and it must
contain all the material terms of a lease which may include
 The names of the parties;
 An adequate description of the property;
 The term granted;
 Rent payable;
 Any special covenants;
 Signature of party against whom the agreement is to be enforced.
 Sackey v. Ashong;
 Walsh v. Lonsdale (1882) 21 Ch. D 9

OF LEASES 11
 Usually said that an agreement for a lease is as good as a lease. This is
not true in all circumstances because
 The agreement does not vest any legal title in the supposed
lessee;
 Specific performance is a discretionary remedy;
 It creates a mere equitable interest which may be overreached by
a bona fide purchaser for value without notice of the equitable
interest.
 Kusi & Kusi v. Bonsu [2010] SCGLR 60
 Western Hardwood Enterprises Ltd. v. West African
Enterprises Ltd [1997-1998] 1 GLR 645
 Gyimah & Brown v. Ntiri [2005-2006] SCGLR 247
 The aggrieved party may alternatively sue for damages for breach of
contract.
 Pele v. International Commercial Bank [2001-2002] 1 GLR 53
OF LEASES 12
Types of Leases
 Leases for fixed periods. Otherwise referred to as
leases for term of years absolute. Period as long or as
short as the parties may choose.
 Reversionary leases – usually a fixed period lease but
which takes effect at a future date. It may be granted to
take effect after the expiration of an existing lease.
 Equitable leases are leases that take effect in equity
when there is part performance and the courts will order
specific performance of the agreement as discussed
above.
OF LEASES 13
Types of Leases
 Concurrent leases – usually an assignment of the
reversion.
 Granted where there is an already existing lease but
the lessor as a result of debt or some allied issues
grants a concurrent lease so that the new lessee will be
entitled to rents accruing from the original lessee.
 The new lessee therefore steps into the shoes of the
landlord in the original lease.

OF LEASES 14
Types of Leases
• Periodic tenancies – tenancies which automatically
renew themselves at the end of each period.
• Duration is indefinite but may be terminated at any
time.
• They may run for periods of a year, month, week or
quarter.
 They may be created expressly if the document that
creates it states so by the use of such terms as yearly,
monthly, weekly amongst others.
 They can also be created orally under section 3 of NRCD
175.

OF LEASES 15
Types of Leases
 They may also arise by implication of law from the
payment of rent or inferred from the conduct of the
parties. Some circumstances under which periodic
tenancies may arise are:
 Where a lease is void for not being by deed, or else has
not proceeded beyond the contract stage but the tenant
has entered into possession and paid rent.
 Where the lease has terminated, but the tenant is
allowed to stay in possession, paying rent as before.

OF LEASES 16
Types of Leases
 Tenancy at will – tenancy subject to the will of the landlord.
 Where a lease has expired but the tenant continues to stay on the
premises with the consent of the landlord.
 Tenant must occupy the property as a tenant with the consent of the
landlord.
 No notice needed here when it comes to termination but it may be
given.
 Duration uncertain and tenant has no security of tenure.
 This tenancy also terminates when either party assigns his interest or
on the death of either party.
 Usually converted to a periodic tenancy where rent is paid in
accordance with a fixed period.
 The right of either party to terminate the tenancy at any time a
fundamental characteristic of a tenancy at will.
OF LEASES 17
Types of Leases
 Tenancy at sufferance – the landlord is suffering you
to be on the premises.
 Arises on the termination of a lease but the tenant
holding over without the consent or dissent of the
landlord.
 If it is with the landlord’s consent – tenancy at will or a
periodic tenancy on the payment of rent.
 If the landlord dissents – the tenant becomes a
trespasser.
OF LEASES 18
Transfer of Leases
• There are two main ways by which a
lease or part of the lease can be validly
transferred by the lessee to a third party:
 Sublease; and
 Assignment.
• The lessor can also assign his interest or
part of his interest in the reversion to a
third party.
OF LEASES 19
Transfer of Leases
 Sublease – this occurs where the lessee grants a
term shorter than his own to a third party.
 The sub-lessee becomes a tenant of the lessee but
has no relationship with the head lessor.
 For there to be a valid sublease, the term granted
must necessarily be shorter than the lessee’s
original term.
 If a person purports to grant a sublease which in
effect disposes of the lessee’s whole interest in the
property, the law sees it as an assignment and not a
sublease.
 P. Y. Attah & Sons Ltd. v. Kingsman Enterprises Ltd. [2003-2005] 2 GLR 90, CA
OF LEASES 20
Transfer of Leases
 Assignment – occurs where the lessee transfers the
residue of his interest in either part or the whole of
the property to a third party.
 The new party (assignee) steps into the shoes of the
lessee. He thus becomes a lessee to the original
lessor.
 The lessor may also assign his interest or part of his
interest in the reversion to a third party.
 The new party steps into the shoes of the lessor and
he becomes the lessor (landlord) of the original
lessee.
 SS 27 and 28 of NRCD 175.
OF LEASES 21

Nature, Creation, Types and Transfer of Leases

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Nature, Creation, Types and Transfer of Leases

Uploaded by

Copyright:

Available Formats

Nature, Creation, Types and Transfer

KAG - FLAW 210 - IMMOVABLE PROPERTY II -

KAG - FLAW 210 - IMMOVABLE PROPERTY II -

 Occupancy prior to the completion of a contract

KAG - FLAW 210 - IMMOVABLE PROPERTY II -

KAG - FLAW 210 - IMMOVABLE PROPERTY II -

KAG - FLAW 210 - IMMOVABLE PROPERTY II -

KAG - FLAW 210 - IMMOVABLE PROPERTY II -

You might also like