LAND LAW 2.1 LEASES AND TENANCIES (INTRODUCTION)
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.
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.
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.
- 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.
- 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.
- 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).
- 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.
- 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.
- 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.
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.
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).