GO TO GOOGLE APP STORE SEARCH FOR VITESOLUTIONS AND DOWNLOAD THE FULL VERSION (OF ALL FIRST AND SECOND SEMESTER NOTES) ONTO AN ANDROID MOBILE DEVICE.

Transcription

1 PREVIEW FOR LAND LAW. THIS IS A PREVIEW COPY GO TO GOOGLE APP STORE SEARCH FOR VITESOLUTIONS AND DOWNLOAD THE FULL VERSION (OF ALL FIRST AND SECOND SEMESTER NOTES) ONTO AN ANDROID MOBILE DEVICE. TOPIC TWO: LEASES AND TENANCIES. The Land Use Act has generally converted freehold interest to right of occupancy limited by a term certain see Section 8 LUA. Leasehold interest now assume position of sub-lease (except in the case of a deemed grantee who has not obtained a certificate of occupancy). See Savanah Bank V Ajloh, Section 23 Land Use Act. Note that statutes generally do not apply to tenancies created under customary and Islamic law. :: A landlord and tenant relationship arises where the holder of a right of occupancy creates a term of years in favour of another person. The Common law position applies to vacant lands not used for dwelling. Generally, a person out of whose interest a tenancy is created is the landlord but in states where common law applies, it includes a person between whom and another the relationship of landlord and tenant exists. LEASES DISTINGUISHED FROM A LICENCE. What is a license? It is a personal privilege permitting a person to do an act which would otherwise have amounted to a trespass-mobil Oil V Johnson. Types: - Bare: permission to enter without consideration furnished. - Contractual: where consideration is furnished-smith V West African Pictures. Here, reasonable notice must be given before revocation-okoye V Dumez. Else, damages-mobil V Johnson. Reasonable depends on the facts and construction of the license agreement-smith V West African Pictures. - Statutory: granted by the governor empowering a person to enter land (which is not subject of right of occupancy) and take materials for building excluding minerals- Section 12 LUA). Minerals belong to the FG (Section 1 Minerals Act) so the Governor cannot authorise a person to go and extract minerals from a land. A license need not be in writing although it is advisable to be in writing.

2 So what distinguishes a license from a lease? At common law, the feature of exclusive possession was the distinguishing feature of a lease. See Lynes V Snaith. However, Lord Denning in Errington V Errington noted that the intention of the parties can rebut the presumption of a lease notwithstanding that there is exclusive possession. As the court would look into the substance of the agreement-cobb V Lane. In construing intention, the courts look at: - The relationship of the parties: Family arrangement, friendship, generosity-cobb V Lane. - How long the occupation is to last-in Moss V Brown; long occupation for several months was presumed to be a tenancy. - Purpose for which the occupier is permitted to use the premises- In Balogun V UAC permitting the plaintiffs to use the defendant s petrol station was construed as a licence. Same position was maintained in Mobil Oil Nigeria V Johnson on similar facts. In Street V Mountford, the court noted that facts prevail over the language of the document. Tenancy was construed notwithstanding that the appellant was granted right to occupy as a licensee on payment of E37 weekly. In summary, the intention of the parties should be looked upon, the nature and substance of the agreement would also be examined to construe whether it is a lease, license or something else. IMPORTANCE OF DISTINGUISHING. - Estate in Land (This is the most important feature): Unlike a licence which gives mere permission to use, a lease creates an estate in land-okoye V Dumez. Consequently, a lessee can sue the lessor for trespass for entry without permission. A licensee cannot do same to a licensor. - Assignability: Since lease creates an estate, it can be assigned or sublet to a third party (in the absence of an agreement to the contrary in the lease agreement). A license cannot be assigned since it creates a mere personal right. - Irrevocability: Generally, a lease once granted is irrevocable while a license without valuable consideration can be revoked after due notice-smith V West African Pictures Ltd. - Implied covenants: The law implies certain (regulatory) covenants to leases which are not implied in licences. Implied covenants shall apply even where the parties failed to provide for it. - Effect of Death: Death of the grantor determines (i.e. puts an end to) a license while a lease binds successors in title and is not terminated by death.

3 These distinctions and effects are irrelevant under Statute (like the Law of Landlord and Tenant, Recovery of Premises Law). The Statutes/laws just say that all persons in lawful occupation of premises qualify as tenants-sobamowo V Federal Public Trustees. It doesn t care whether the lawful occupation resulted from a tenancy agreement, mid-time agreement, license agreement or whatever. What matters is that occupation is lawful. Note however that Section 1(2) of the Lagos State Tenancy Law 2011 excludes certain categories of license from the ambit of tenancy. ESSENTIALS OF A VALID LEASE. 1. Certainty of parties: The Lessor and Lessee must be juristic persons with the capacity to grant and take an interest in land respectively-idowu V Williams. The Law of Landlord and Tenant further requires that there must be an intention to let and take the lease by the landlord and tenant respectively. 2. Certainty of Property: The demised property (must exist at the date when the lease is to commence) must be ascertainable and described with precision-scarfe V Adams. 3. Certainty of Term: The lease must have a certain beginning and a certain end as it cannot enure in perpetuity otherwise void-uba V Tejumola, see also Section 50 Rivers State law (Landlord and Tenant). 4. Certainty of Terms: If the parties want to enforce a covenant (that is not implied by the law) it must be clearly spelt out in the agreement. E.g. covenant not to assign or sublet the premises. 5. Exclusive possession: is necessary at common law. This is not the case under the laws of Landlord and Tenant. Exclusive possession is occupation of the land to the exclusion of all but a person with better title-chiroma V Suwa. 6. Formalities: the lease must be executed in the manner prescribed by the applicable law. See Section 3 Real Property Act, Section 1 Statute of Frauds 1677 and so on which stipulate various requirements and formalities. :: Rent is not an essential element of a lease. It may or may not be present in a lease. All in all, the court would usually look at the substance of the agreement rather than the form-uba V Tejumola and sons. VITIATING ELEMENTS. A lease shall be void where the tenancy is procured by fraud, used for illegal purposes or purposes contrary to public policy. See for example, Section 40 Rivers State Law. Money or other payments made cannot be recovered.

4 Also where there is a mistake as to fact. Where it is one party that is mistaken, it shall be voidable at the instance of the mistaken party-cundy V Lindsay, Ingram V Little- Section 44 Rivers State. Where the lease was induced by misrepresentation, the innocent party can rescind- Angel V Jay. - Rectification can be ordered where the words of the agreement differ materially from that intended by the parties. This would bring the written words in consonance with the mutual intention of the parties-craddock Bros V Hunt. See Section 46 Rivers State Law (note that other States have their own laws which contain similar provisions. We are just picking a few states for specimens. Rivers being one). CREATION OF LEASES AND TENANCIES. Who can create or take a lease? - The owner of a right of occupancy. - A tenant: (not a tenant at will or sufferance) can create a tenancy of a lesser duration.a donee of Power of Attorney: not more that the authorized period else surplus be void. - A person in loco parentis creates on behalf of an infant. See Section 14 Rivers Law. At common law, a lease created by an infant is voidable at his instance within a reasonable time upon attaining majority. - Persons of Unsound Mind can create a lease provided the lessee was ignorant of his insanity at the time of creating the lease-molton V Camroux. Under the Law of Landlord and Tenant, A person of unsound mind can be granted a lease but cannot be sued unless the tenancy/lease is a necessary for him. See Section 22 Rivers State Law. - Married women by virtue of the Married Women's Act 1882 can validly grant and take a lease. - Corporations may grant a lease under its corporate seal. If the lease is not under seal but the tenant enters and pays rent, he holds the tenancy on the terms of the instrument- Ecclesiastical Commissioners V Meral. - A company registered under the CAMA can create or take a lease as authorized by its memorandum of association-pan Asian African Co Ltd V Nicon. Where lease is taken in an unauthorised manner, it would not be void but may form the basis for an application for injunction by third parties. - Members of a partnership may jointly create or take a lease provided it is NOT done in the business name. Else void because a business name does not qualify as a juristic person in law.

5 - Associations: Registered trustees of an association under the CAMA can create or take a lease on behalf of the association. - Trustees holding land on trust for sale can create leases-settled Lands Act 1882, Section 34 PCL How can a lease be created? The relationship of landlord and tenant is created by a lease OR an agreement for a lease in law and equity respectively. There is no hard and fast rule as regards formalities provided that a lease exceeding 3 years must be created in writing (by deed)-section 3 Statutes of Frauds. Section 79 PCL. Note however that under Section 3 of the Lagos state Tenancy Law, a tenancy agreement may be made orally or in writing. However, equity can still enforce an oral lease which is above 3 years in the interest of justice. Especially if the plaintiff has changed his position in furtherance of the contract and would be unconscionable for the defendant to take undue advantage of statute-ekpanya V Akpan. For example; Payment of rent and entry into possession with the permission of the lessor has been held to be sufficient act of performance. Again, the rule in Walsh V Lonsdale may kick in to enforce an agreement to create a lease. Notwithstanding that the lease has not actually been created. This is couched on the rationale that equity regards that which ought to be done as done. Therefore, equity regards an agreement to create a lease as if the lease has actually been created. Jessel MR noted that specific performance can be ordered to compel the actual creation and completion of the lease. In the Walsh s case, the plaintiff was estopped from circumventing rent payment on the ground that the lease of 7 years was not created by deed. This rule may however be inapplicable where: - It would produce and unjust/inequitable result: In Coatsworth V Johnson, the order was not granted to the tenant because he had committed a breach of the agreed covenant to cultivate the farm properly. - Where certain easements exists. - It relates to a third party. In essence, the rule in Walsh V Lonsdale shall only apply to parties to the agreement. A third party with no privity in the agreement cannot be brought within its ambit-innih V Ferado Agro Consortium. - Where a bona fide purchaser has acquired the legal estate for value and without notice of the existing agreement. Where the agreement to create a lease is breached, Damages, specific performance or both can be awarded for non-performance. Similar provisions can be found in the states where the law of landlord and tenant exists. DOCUMENTATION.

6 This part on documentation is not so necessary for exam purposes. Furthermore, it would be better understood if you have a look at a specimen agreement. It is advisable for the agreement to be in writing. A lease/tenancy agreement usually contains the following: - Commencement date usually followed by the date it is made. - Description of the parties: who must be juristic persons with capacity-idowu V Williams. - Recitals: It shows that requisite consent has been obtained. Such may be needed where the covenant prohibits a tenant/lessee from granting a sublease without the consent of the lessor. - Testatum: shows what the parties have agreed to do (operative words) and a precise and reasonable description of the subject matter of the demise (parcel clause). - Habendum: specifies the quantity, quality, duration and commencement of the term. Note that actual possession of the demised property is no longer a condition precedent to the creation of a legal estate in states covered by the PCL and the various states where the law of landlord and tenant applies. - Reddendum: defines the amount of rent payable. A rent review clause should be inserted if the lessor is desirous of reviewing rent in the future. It must comply with the provisions of the applicable rent control statute. - Covenants: implied by the law and those expressly agreed upon by the parties. E.g quiet enjoyment, etc. - Testimonium Clause: Links the parties with the terms of the lease. - Schedule: contains details of facts relating to the demised property. - Capable and mature witness should also attest to the agreement. The relevant stamp duties must be paid-see Section 68 Stamp Duties Act. A tenancy agreement does not require governor s consent under Section 21 and 22 of the LUA except it is for a duration more than 3 years (In Lagos State, it is 5 years). In such case, consent is necessary and Section 26 LUA invalidates non-conforming leases. A mere agreement to create a lease does not require governor s consent-sanni V Ogungbe. It is the lease agreement itself (of more than 3 years) that does. Noncompliance (by not obtaining governor s consent) can invalidate the lease-savanah Bank V Ajiloh. (However some cases (like Ugochukwu V Cooperative bank, Hamidu b Sahar Ventures Ltd) have applied the ex turpi causa non oritur actio rule to dispense with the consent requirement in the interest of justice. However, the more recent case of UBN V Ayodare takes us back to the Savannah Bank V Ajiloh era by requiring that consent MUST be validly obtained where required). Note: Technically speaking; a lease creates a term of more than 3 years while a tenancy creates a term less than three years-hamidu V Sahar Ventures Ltd.

7 REGISTRATION: A lease (ie more than 3 years) must be registered. See Section 2 Land Registration Law else it would be inadmissible as evidence. Where the tenant (of an unregistered lease) pays rent and assumes possession of the property, his interest is equitable and inferior to that of a subsequent bonafide purchaser for value without notice of the legal estate who registers his-okoye V Dumez. TYPES OF TENANCY. A lease may be broadly classified based on the following: 1. Based on purpose: under this we have residential, commercial, agricultural, industrial Based on Tenure: Under this we have Tenancy at Will, Monthly, Quarterly, Halfyearly, Yearly and fixed tenancy. Monthly, Quarterly, Half-yearly and Yearly tenancy require one week s, one month, 3 months and 6 months quit notice to be given respectively. Fixed Tenancy does not require quit notice as it automatically lapses upon effluxion of time. 3. Based on Mode of Creation: under this we have; an Oral Lease, Written Lease and lease Under Seal. An Oral lease must not be more than 3 years and must reserve best rent obtainable alongside exclusive possession-section 79 (2) PCL Okoye V Nwulu. Although the problem is precision-ekpanya V Akpan, Odutola V Papersack Nigeria Ltd. A lease above 3 years must be signed, sealed and delivered-see Section 77 PCL. Non-compliance would not be totally fatal by virtue of the equitable rule in Walsh V Lonsdale which seeks to still enforce agreements notwithstanding non-compliance with legal requirement. Note Tenancy at Will: here, the owner allows the tenant to occupy the land on the condition that possession is determinable at the pleasure of either or both parties-ap V Owodunni. A tenancy at will may arise in the following situations: Where a tenant continues in possession with the consent of the