2 Lease & Tenancy - Lecture notes 2 PDF

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Summary

LEASES AND TENANCIES LEASE  S5  Registered lease or sub-lease of alienated land  S221(2)  Exceeding 3 years  S227  Registrable interest  S221(3)  Max term 99 years for whole land & 30 years for a part  S221  RP has power to lease  S222  Lessee & sub-lessee...

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LEASES AND TENANCIES LEASE  S5  Registered lease or sub-lease of alienated land  S221(2)  Exceeding 3 years  S227  Registrable interest  S221(3)  Max term 99 years for whole land & 30 years for a part  S221  RP has power to lease  S222  Lessee & sub-lessee have power to grant sub-lease  S221(1)  Whole or part of land  S221(4)  Form 15A (lease)  S222(4)  Form 15B (sub-lease)  Attached plan & description

TENANCY  

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S5  refer to S213(1) S213(1)  Tenancy or sub-tenancy less than 3 years S223(2)  Non-registrable interest S213(1)  Max term 3 years S223 

RP, lessee, sub-lessee, tenant have power to grant tenancy or sub-tenancy

S223(1)  Whole or part of land S223(2)  By word of mouth or written instrument in any form S213(2)(a)  valid if effected in writing or by word of mouth only S213(2)(b)  written instrument need not comply with S207-212 & capable of registration

CHARACTERISTICS 1. Right to exclusive possession of the premises  Right to occupy premises & exclude all other persons from the land  Grantor retains right to enter premises at will Woo Yew Chee v Yong Yong Hoo  In any event exclusive possession is no longer a decisive test  Ultimate test is nature & quality of occupancy  Whether it was intended that occupier should have a stake in premises sublet or whether he should have only a personal privilege

2. Intention to create lease or tenancy CHONG JIA WEI LIA160020

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The parties must have intended to create a lease or tenancy, not license Court would look at arrangement between parties evidenced by agreement & interpret intention of parties as to whether it was intended to create lease or license

Kandasami v Mustafa  True relationship between parties as revealed by their conduct & surrounding circumstances was that of landlord & tenant, not licensor & licensee  Considering various clauses of the document which majority therein are covenants normally found in standard tenancy agreements Teo Bee Ann & Anor v Goh Say Dock & Anor  Intention of parties was clear to create landlord & tenancy relationship  RP had never intended to part with portion of land & confer tenants irrevocable rights to occupy & use portion of land in perpetuity LEASE VS LICENSE  Lease creates interest in land  Dispossession entitles lessee to recover possession of land  Capable of enforcement against landlord’s successors in title  Right in rem  License does not create interest in land  Only personal obligation compensatable on breach with damages  Right in personam Teo Bee Ann & Anor v Goh Say Dock & Anor  License does not create any interest & is not interest in land  Only a personal obligation & would not be enforceable against 3rd parties 3. Definite period  Must be granted for a definite period capable of being ascertained & not in contravention with NLC  Lease or tenancy which has no definite time of commencement, period, or duration is void for uncertainty Siew Soon Wah v Yong Tong Hong  A lease in perpetuity cannot be granted  It was not in landlord’s power to grant lease > 30 years 4. In consideration of payment or rental

TYPES OF LEASES 1. Lease for a fixed term CHONG JIA WEI LIA160020

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S221(3) (a) Max 99 years for whole land (b) Max 30 years for a part of the land S228A  A part of land includes a part of any building on such land

Siew Soon Wah v Yong Tong Hong  Max period for which land can be let which does not consist whole land is 30 years 2. Tenancy for a fixed term  S213(1)  Up to 3 years  Periodic tenancy  weekly, monthly, annually 3. Tenancy at will  Holds over after expiry with lessor or landlord’s permission  Can be terminated by either party at any time  May convert to periodic tenancy when the landlord accepts rent 4. Tenancy at sufferance  Holds over after expiry without lessor or landlord’s permission  Lessor or landlord may repossess 5. Tenancy by estoppel  Lessor or landlord has no title or interest in land  But purports to grant a lease or tenancy  S116 Evidence Act 1950  Lessee or tenant is estopped ‘during continuance of lease or tenancy’ to deny that lessor or landlord had no title at the beginning of the lease or tenancy Wee Tiang Tap v Chan Chan Brothers  Despite having knowledge that there was a change of ownership, R continued paying the monthly rental to P  Lease continued to subsist between the parties Cheok Lek San v Yong Kam Chin  Belief of tenant in his landlord’s ability to grant term is not essential  He may know or have notice of defect in his landlord’s title & yet be precluded 6. Tenancy coupled with an equity  Tenant may be in possession of land or premises based on encouragement of landlord  Relying on this encouragement, or under expectation, or upon promise made by landlord, tenant had expended money to improve the land  Landlord could not act contrary to that expectation or promise  Landlord is estopped from terminating tenancy until he has satisfied tenant’s equity Tan Khien Toong & Ors v Hoong Bee & Co CHONG JIA WEI LIA160020

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 It was for the tenant to prove the existence of any equity Inwards v Baker  If land owner requested or allowed another person to expend money on land under expectation created or encouraged by land owner that he would be able to stay there  That raised an equity in license such as to entitle him to stay  He has a licence coupled with equity that the equity arising from expectation of land does not fail Ahmad Shazily Ismail Bakti v Nik Salma Zaidah  There are 4 conditions for tenancy coupled with an equity 1. Tenant-landlord relationship 2. Ground rent 3. Encouragement 4. Expectation & expenditure by tenant Devi v Francis  Clause 4 of agreement  tenancy was month to month tenancy & accordingly indefinite in duration, until made definite by offer of sale by R to A  What A had bought was a house with tenancy with clear expectation of a right to purchase with land  Imply a condition that landowner or R as her successor in title with notice would not terminate tenancy by a month’s notice until & unless the land had been offered to A to purchase & she had refused Mok Deng Chee v Yap See Hoi & Ors  Expenditure involved in construction of house raised an equity  Making the tenant a tenant with an equitable estoppel  Equity was not lost by changes made to house nor its ownership  The fact that the old house was demolished & new one was built did not affect equitable estoppel of A  Tenancy coupled with equity could not be determined by a bare notice to quit

RESTRICTIONS 1. In whose favour?  S43  Natural persons other than minors  Corporations having power under their constitutions to hold land  S433B  Non-citizen & foreign company 2. Cannot be granted to 2 or more person  S225(2)  No lease or tenancy may be granted to 2 or more persons or bodies  Otherwise than as trustees or representatives 3. Consent of chargee CHONG JIA WEI LIA160020

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S226(1)  RP, lessee or sub-lessee shall not be capable of granting lease, sub-lease or tenancy without consent of chargee S226(2)  Consent of chargee to grant lease or sub-lease is signified by his joining indicated in Form 15A or 15B  Consent of chargee to grant tenancy is given in writing, signed by him or his lawfully authorized agent

EFFECT OF NON-REGISTRATION OF LEASE  S206(3)  Void as a lease but good & valid as an agreement for a lease  Right ad rem (personal rights)  Specific performance or damages may be granted  The court will look into intention of parties Margaret Chua v Ho Swee Kiew & Ors  Unregistered written agreement for a lease was void  But it was good & valid as an agreement which can be enforced in equity  Can claim for damages for breach of condition S&M Jewellery Trading Sdn Bhd v Fui Lian-Kwong Hing Sdn Bhd  Lease or sub-lease is not rendered void by reason of non-registration but is imperfect without registration  It will not operate to transfer title to lessee or sub-lessee unless perfected  If tenant is let into possession under imperfect lease or sub-lease  He becomes tenant at will  When he pays rent, tenancy at will changes into periodic tenancy upon terms of intended lease or sub-lease  Where appropriate, equity may treat agreement for lease as equitable lease  Treat unregistered lease as registered & compel SP against proprietor Siew Soon Wah v Yong Tong Hong  The agreement was not so vague & uncertain as to be void for uncertainty  Intention was clear  The court gave effect to it & granted specific performance Ho Ying Chye v Teh Cheong Huat  Unregistered lease does not bind subsequent RP

ENDORSEMENT OF TENANCY  S213(3) CHONG JIA WEI LIA160020

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 No tenancy is binding  Unless become protected by endorsement on RDT  Before registration of transfer S316  Application for endorsement S317  Procedure on application

Than Kok Leong v Low Kim Hai  D failed to endorse his oral tenancy on RDT  Not binding on P  P was not estopped from evicting D  P was not bound by any equities existing against the former proprietor nor by any notice or knowledge that the premises were being occupied by D Hotel Ambassador v Seapower Sdn Bhd  Tenancy would not bind R until tenancy has become protected by endorsement

RIGHTS AND OBLIGATIONS OF PARTIES 1. Expressly provided by agreement  S229(1)  Any agreements set out in 6th Schedule may be incorporated in lease 2. Implied by law (a) Agreements implied in all leases & sub-leases  S230(1)  Lessee or sub-lessee pay rent  Duly observe & perform all conditions  S230(2)  Lessor pay all rent due to SA (b) Agreements implied in absence of contrary intention  S231(1)  Lessees & sub-lessees (a) Pay all rates, taxes & other outgoings except rent due to SA & other outgoing payable exclusively by lessor (b) Keep the demised property in repair (c) Permit lessor or his agent to enter demised property & examine its condition (d) Not to transfer or charge lease, or sub-let or part with possession of the demised property without prior written consent of lessor  S232(1)  Lessors & sub-lessors (a) Allow lessee to peaceably & quietly possess & enjoy demised property without interruption or disturbance from lessor (b) Keep in repair the roof, main walls & main drains, & common passages or installations where lease relates to a part of building (c) If demised property is unfit for occupation or use by any event, lessee shall cease to pay rent or determine lease by giving 1 month’s notice in writing OPTIONS FOR RENEWAL  S228(1)  Option to require grant to him of lease or tenancy for a further term CHONG JIA WEI LIA160020

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An offer from RP which cannot be retracted if terms & conditions of offer are satisfied Not a right of pre-emption or right of first refusal  Up to lessor or landlord whether to make the offer for renewal

Voo Min En & Ors v Leong Chung Fatt  The lease agreement between R & A included an option to renew, subject to conditions including R had to give written request for renewal at least 3 months before expiry of lease  Right to renew is an offer by lessor or landlord which cannot be withdrawn  It is a privilege, the terms & conditions of which shall be duly & strictly complied with  Otherwise the option or the right is lost  R gave no written request as required by lease agreement  There is no question of lease being renewed at all Cayman Development (Kedah) Sdn Bhd v Puah Kiew & Ors  An option is a unilateral contract which does not become binding on grantor of option until the exact terms of option are complied with Lim Eng Huat v Metroplex Project Management Sdn Bhd  P’s notice to renew the lease was made within the stipulated 6 months period  Accordingly, P was entitled to the claimed rental sum owned by D to P Wisma Sime Darby Sdn Bhd v Wilson Parking (M) Sdn Bhd  Option clause is void for uncertainty  Unless agreement provided machinery or some formula which the courts can utilize to ascertain what is otherwise unascertainable without the parties coming to an agreement

TERMINATION OF LEASE / TENANCY 1. Term has expired  S240(1)  Registrar may cancel registration of lease or sub-lease  S240(2)  Endorsement made on RDT may be cancelled 2. Surrender  S239(1)  With agreement of the person or body entitled to reversion expectant  S293(4)  Require consent of chargee  Signified by joining in instrument of surrender (lease or sub-lease)  Signified in writing signed by him or lawfully authorized agent (tenancy) (a) Surrender of lease or sub-lease  S239(2)  Effected by instrument in Form 15C CHONG JIA WEI LIA160020

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Interest shall determine as from the date on which instrument is registered

(b) Surrender of tenancy exempt from registration  S239(3)  Effected either by word of mouth or by written instrument in any form  RP may apply for cancellation of endorsement if tenancy was protected by endorsement on RDT 3. Valid notice to quit is served  Sufficient notice duly served on lessee or tenant  S7 Specific Relief Act 1950  If lessee or tenant continues to remain in occupation after expiry of notice, lessor or landlord may recover possession by order of court (no self-help) 4. Forfeiture  S234(1)  Liable to forfeiture if lessee, sub-lessee or tenant (a) Breaches any provisions (b) Is adjudicated bankrupt (c) Goes into liquidation (company)  S234(2)  Forfeiture may be enforced by re-entry onto the land or by action in court  S235  Forfeiture shall not be enforced unless & until 1. A notice in writing has been served 2. Lessee or tenant has failed to remedy the breach & make reasonable compensation in money within a reasonable time  S236  Forfeiture shall extinguish all interests dependent thereon

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