INTRODUCTION
A lease is a transfer of a right to enjoy the property of a lessor made for a certain time under which the lessee is put in possession of the property. The rights of ownership or title are not passed on to the transferee. There is only a transfer of the right of enjoyment in the lease.
RELEVANT PROVISIONS
Section 105, 107, 108 of the Transfer of Property Act 1882
LITERAL MEANING
It means an agreement by which the owner of the property allows another person to use it for a specified time in return for payment.
DEFINITION OF LEASE
A lease of immovable property is the transfer of right to enjoy such property, made for a certain time express or implied, or in perpetuity, in consideration for 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.
Transferor: The transferor is called the lessor.
Transferee: The transferee is called the lessee.
LEASE HOW MADE?
1. Registered Instrument:
A lease of immovable property from year to year or for any term exceeding one year or reserving a year’s rent can be made only by a registered instrument.
2. Oral Agreement
All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.
3. Execution by both Lessor and Lessee
Where a lease of immovable property is made by a registered instrument, such instrument or where there are more instruments, than one each such instrument shall be executed by both the lessor and lessee.
4. Notification by Provincial Government
Provided that the Provincial Government may, from time to time, by notification in the official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year or reserving a yearly rent, or any class of such leases may be made by unregistered instrument or by oral agreement without delivery of possession.
MODES OF LEASE
The lease may be created by contract.
- Express
- Implied
- Statue
ESSENTIAL ELEMENTS OF LEASE
Following are the essentials of a Lease.
- Immoveable Property
- Fixed Duration of Enjoyment
- Transfer of Right
- Consideration
- Acceptance
LESSOR
DUTIES OF LESSOR
Following are the liabilities of the lessor.
1. Disclose any Material Defect
The lessor is bound to disclose to the lessee any material defect in the property concerning its intended use, of which the former is and the latter is not aware and which the latter could not with ordinary case discovery.
2. Delivery of Possession
It is the statutory obligation of the lessor to put the lessee in possession of the property leased out to him.
3. Contract with Lessee
The lessor shall be deemed to contract with the lessee that if the latter pays the rent reserved by the lease and performs the contracts binding on the lessee, he may hold the property. during the time limited by the lease without interruption.
The benefit of such contract shall be annexed to and go with the lease’s interest as such and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.
4. Protect the Rights of Heirs
The lessor is bound to protect the rights of the lessor’s heirs in case of his death.
5. No Interruption
The lessor is bound not to interrupt the possession of property of the lessee.
6. Repair the Leased Property
The lessor should repair the leased property at the demand of the lessee.
RIGHTS OF LESSOR
Following are the rights of the lessor.
1. Consideration
He is entitled to the consideration.
2. Right to Take Consideration in Time
He has the right to take consideration in time from the lessee.
LESSEE
RIGHTS OF LESSEE
The rights of the lessee are as under;
1. Right of Accession
If during the continuance of the lease, any accession is made to the property, such accession (subject to the law relating to allusion for the time being in force) shall be deemed to be comprised in the lease.
2. Right to Repairs on Property
If the lessor neglects to make within a reasonable time after notice, any repairs which he is bound to make to the property, the lessee may make the same himself and deduct the expense of repairs with interest from the rent, or otherwise recover it from the lessor.
3. Right of Deduction with Interest
If the lessor neglects to make any payment that he is bound to make and which he has not made him is recoverable from the lessee or against the property, the lessee may make such payment himself and deduct it with interest from the rent or otherwise recover it from the lessor.
4. Right to Removal
The lessee may even after the determination of the lease remove at any time whilst he has the property leased but not afterwards all things which he has attached to the earth provided he leaves the property in the state in which he received it.
5. Right to Crops
When a lease of uncertain duration determines by any means except the fault of the lessee, he or his legal representative is entitled to all the crops planted or shown by the lessee and glowing upon the property when the lease determines to free ingress and egress together and carry them.
6. Right to Transfer of Property
The lessee may transfer absolutely or by way of mortgage or sublease the whole or any part of his interest in the property and any transferee of such interest or part may again transit. The lessee shall not by reason only of such transfer, lease to be subject to any of the liabilities attaching to the lease.
DUTIES OF LESSEE
Following are the liabilities of the lessee.
1. Disclose The Facts
The lessee is bound to disclose to the lessor any fact as to the nature or extent of the interest that the lessee is about to take of which the lessee is and the lessor is not aware and which materially increases the value of such interest.
2. Pay Premium
The lessee is bound to pay or tender at the proper time and place, the premium or rent to the lessor or his agent on this behalf.
3. Keep property in Good Condition
The lessee is bound to keep and on the termination of the lease restore the property in as good condition as it was in at the time when he was put in possession, subject only to the changes caused by reasonable wear and tear or irresistible force and to allow the lessor and his agents at all reasonable times during the terms to enter upon the property and inspect the condition thereof and give or leave a notice of any defect in such condition and when such defect has been caused by any act or default on the part of the lessee, his servants or agents. he is found to make it good with three months after such notice has been given or left.
4. Notice of any Defect
If the lessee becomes aware of any proceedings to recover the property or any part thereof or of any encroachment made upon or any interference with the lessor’s right concerning such property, he is bound to give, with reasonable notice thereof to the lesson.
5. Use for Real Purpose
Lessor must not use the property or permit another to use the property for a purpose other than that for which it was leased
6. Permission of Lessor
Lessee must not without the lessor’s consent erect on the property any permanent structure except for agricultural purposes.
7. Delivery of Possession of Leased Property
On the determination of the lease, the lessee is bound to put the lessor into possession of the property.
KINDS OF LEASE
The following are kinds of leases.
1. Lease for a Certain Time
The commencement of the period must be certain in a lease. Normally, if no mention is in the agreement, it will be deemed to start immediately.
2. A Periodic Lease:
The term of the lease may be fixed, periodic, or of indefinite duration If it is for a specified period, the term ends automatically when the period expires, and no notice needs to be given, in the absence of legal requirements.
3. Lease in Perpetuity:
An owner in fee simple can grant a lease of his property for any term because the fee simple is itself effectively perpetual. Thus there is nothing to prevent a fee simple owner from granting a lease to a tenant for 99 years leases commonly.
HOW THE LEASE COME TO END
The lease of immovable property comes to an end in the following ways.
1. Lapse of Time
By the efflux of the time limited thereby.
2. Happening of a Specified Event
Where such time is limited conditionally on happening of some event lease of immoveable property comes to end.
3. Termination of the Interest of the Lessor
Where the interest of the lessor in property terminates on, or his power to dispose of the same extends only to, on the happening of such event.
4. Merger
In the case of the interest of the lessor and lessee in the whole of the property becomes vested at the same time in one person in the same right.
5. Express Surrender
The lessee yields up his interest under the lease to the lessor, by a mutual agreement, between them.
6. Implied Surrender
Lease of immovable property may come to an end by implied surrender.
7. Forfeiture
That is to say in the case, the lessee breaks an express condition which provides that on breach thereof the lessor may re-enter or in the case, the lessee renounces his character as such by setting up a title in a third person or by claiming the title in himself or the lessee is adjudicated an insolvent and lease provides that the lessor may re-enter on the happening of such event, any in any of these cases, the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease.
8. Expiration of time given in Notice to Quit
On the expiration of a notice to determine the lease, or quit or of intention to quit, the property leased duly given by one party to another.
CONCLUSION
It is concluded that a lease is the transfer of an interest in immovable property. Under the Transfer of Property Act 1882, there are different modes by which a lease in respect of immovable property may be determined.
FAQs
What do you mean by the term “Lease”? How it is made and under what circumstances, it is terminated?
(2019-S)
Explain the rights and duties of the lessor and lessee.
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Explain Lease. How it is made? How does it come to an end?
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What is “Lease”? How it is made? How it is terminated?
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What is a Lease? Explain the rights and duties of the lessor.
(2015-S)
What is a Lease? What are the essentials of a Lease agreement? Explain the rights and duties of the Lessee.
(2012-S)
Define lease. What are the essentials of the lease agreement? How does the lease of immovable property come to an end?
(2010-S)
