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LEASES AND TENANCIES LAW APPLICABLE - Constitution of the Republic of Uganda Registration of Titles Act Cap. 230 Land Act (Cap227) Common Law Case Law Definition of a Lease The Modern law of Real Property 14 th edition defines a lease as a Conveyance in which the Lessor gives to the Lessee an intere...

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LEASES AND TENANCIES LAW APPLICABLE -

Constitution of the Republic of Uganda Registration of Titles Act Cap. 230 Land Act (Cap227) Common Law Case Law

Definition of a Lease The Modern law of Real Property 14 th edition defines a lease as a Conveyance in which the Lessor gives to the Lessee an interest less than a freehold and less than that what he/she is entitled to for a definite period of time. Meggary’s Manual of the Law of Real Property at page 332 defines a lease as a document creating an interest in land for a fixed period of certain duration usually in consideration of payment for rent .It passes a legal term of years to a tenant (lessee and creates a legal relationship of Landlord and Tenant)( page S.40 of the Land Act Cap 227 provides that non-Citizen can acquire a lease in land up to 99 years. The RTA Provides that lease of three years or more must be registered under R.T.A. S.40 (3) A non- Citizen shall not be granted a lease exceeding ninety nine years and further section 40( 3) provides subject to the other provisions of this section , a non citizen shall not acquire or hold mailo or freehold land. However, by virtue of the provisions of section 40 ( 6) , Any citizen who holds land under any freehold or mailo tenure and ceases to be a citizen of Uganda , shall by virtue of ceasing to be a citizen of Uganda cease to hold land under freehold or mailo and such tenure shall be converted automatically into leasehold without any other legal requirement for a period of 99 years from the date of that person ceasing to be a citizen. Essentials of a lease 1. Exclusive possession must be at all times. The tenant must have the right to exclude others from the demised premises. Certain premises for a fixed period cannot be a tenancy if the land lord remains in occupation and control of the premises. 1. Certainty of duration. A lease cannot be for uncertain duration or period of time. the duration of the lease must be clear In the case of Lace V Chantler (1944) 1KB 368, it was held that a lease granted for the duration of the war was uncertain and such a term could not be created . Consequently, a term of years can exist for a fixed period of years or shorter term. A

lease will only be legal if it satisfies the formal requirements and exclusive Possession of the premises of the property given. In examining the essential question of duration, it is important to analyze it from the two perspectives, namely from the Uganda law and the common law. Under common law, in principle case of Marshal vs Berridge( 1881-5) All ER 908, Where the plaintiff wrote to the defendants proposing a lease of three, five, seven or fourteen or twenty one year’s optional on part of the plaintiff only to give up at any one of the dates on giving six moths notice. Several letters were exchanged thereafter and later the parties signed a memorandum and the plaintiff was to take possession of the furnace which in the meantime was in the defendants possession . Later the plaintiff wrote to the defendants seeking possession as he wanted to commence the use of the furnace for his business in iron ore. They disagreed as the defendant wanted the plaintiff to use the iron ore from the other places which he considered cheap. When the defendant refused to let possession the plaintiff sued seeking specific performance on part of the defendant . At the trial the defendant contended that there was no lease for lack of certainty as there was no date of commencement of the lease mentioned in the agreement to satisfy the statue of frauds Fry j however applying the decision in Jaques vs Miller ( 1876)6 Ch.153 held that the agreement was dated .it must be construed as for a lease to commence immediately from its date therefore overruled the defendants and decreed specific performance . Being dissatisfied the defendants appealed and on appeal the issue was whether there was an agreement between the parties at all. It was pointed out that whatever else is to be found in the agreement , the agreement being an agreement for a lease, you cannot discover within the four corners of the agreement from what time the lease is to begin. If that is so, that being a most essential term of the agreement , the agreement cannot be enforced for want of certainity.

3. 4. 5.

Others Sum to be paid must be certain Date of commencement must be specific There must be reversionary interest.

Creation of a lease With the notion of the freedom of contract in place a lease can be created by an agreement or by operation of the law. For example, by virtue of the provisions of section 40 ( 6) , Any citizen who holds land under any freehold or mailo tenure and ceases to be a citizen of Uganda , shall by virtue of ceasing to be a citizen of Uganda cease to hold land under freehold or mailo and such tenure shall be converted automatically into leasehold without any other legal requirement for a period of 99 years from the date of that person ceasing to be a citizen. That if one of the many examples of the creation of the lease by operation of law. A lease being a contract , under the provisions Section 10 of the Contracts Act it’s a requirement that a contract whose subject matter exceeds twenty five currency points shall be

in writing ( Shs 500,000). Whereas the Contracts Act provides that a contract may be verbal or in writing, its prudent however, that a lease be in writing to avoid the ambiguities. To vest a legal estate in the tenant, a lease must be created by deed. Any attempt to create a lease orally or in writing is void at law unless the lease is less than three years . S. 101 RTA provides that Proprietor of any Mailo or freehold may lease land for a term exceeding 3 years, by signing a lease of it in the form in the Eighth schedule to the Act. but no lease subject to a mortgage shall be valid or binding against the mortgagee unless he or she consents in writing to the lease prior to it being registered. However, the same cannot be effective unless registered .S.54 of RTA Provides that no instrument is effectual until registered in the manner provided for under the Registration of titles Act. Section 55 of the Registration of titles Act provides that, a proprietor of any land under the operation of the Act shall be entitled at a certificate of title. Therefore, upon being granted a lease the proprietor of a lease shall be granted a Certificate of title. In the case of Souza v Moorings Hotel 1960 E.A. An agreement creating a sublease not in form required by law- it was held S.51 requires every instrument to be registered but it does not state that unregistered instrument cannot operate as a contract interparty. It’s not void if not registered, equally provides for specific performance. Types of Leases 1. Leases for a fixed period (a) Certainty of term. A lease may be granted for any certain period of certain duration, no matter howlong or short. Leases for a week or for 3,000 years are equally valid. Both the commencement and the duration of the term must either be certain or else be rendered certain before the lease takes effect. Thus a lease for 99 years from January 1 complies with this rule, and so does a lease from the determination of an existing tenancy for as many years as X shall name, once X names the period; but a tenancy granted during wartime “ for the duration of war” does not. (b)Reversionary Leases. Before 1926 in England there was not a restriction upon the length of time that might elapse before the term began; a lease could thus be granted in 1917 to commence in 1946, such a lease being known as a reversionary lease. The perpetuity rule was not infringed by such a grant, for the lessee took a vested interest forthwith; only the vesting in possession was postponed. However, the grant of a term to take effect more than 21 years from the instrument creating it is void made after 1925 at a rent or in consideration of a fine, and the same applies to any contract made after 1925 to create such a term, e.g a grant in 1982 of a lease commencing May 1 2005 or a contract

in 1982 to grant in 1983 a lease commencing May 1, 2005, but an option in a 22 year lease to renew the lease on its termination for a further 22 years is valid. . (c )

Interesee termini. Before 1926 in England there was a common law rule that a lessee acquired no actual estate in the land until he had taken possession during the term of the lease. Until he had exercised his right to take possession, he had a mere interesse termini (an interest in the term). This had troublesome effects but the doctrine has been abolished in respect of all leases, whether made before or after 1925.

(d)

Determination. The general rule is that a lease for a fixed period automatically determines when the fixed period expires; but there are statutory exceptions to this rule.

2.

Leases for lives. By the Law of Property Act 1925, a lease at a rent or a fine for life or lives, or for term of years determinable with a life or lives or on the marriage of the lessee, is converted into a term of 90 years, whether it was granted before or after 1925; a contract for such a lease is treated in a similar way. The lease continues even after the death or marriage, as the case may be, although either party may determine it thereafter (but not before) by serving on the other one month’s written notice to expire on one of the quarter-days applicable to the tenancy, or, if no special quarter-days are applicable, on one of the usual quarter-days. Thus leasesat a rent or fine granted “to A for life,” “to B for 10 years if he so long lives,” and – “to C for 99 years if he so long remains a bachelor” were all converted into term which will continue for 90 years unless by the proper notice they are determined on any quarter-day (not necessarily the first) after the even has occurred.

3..

Perpetually renewable leases. A perpetually renewable lease was a lease which gave the tenant the right to renew it for another period as often as it expired; usually the tenant had to make some payment on exercising this right. By the Law of Property Act 1922, all such leases existing at the end of 1925 were converted into terms of 2000 years, calculated from the beginning of the existing terms; and perpetually renewable leases granted after 1925 take effect as terms of 2000 years from the date fixed for the commencement of the term. Any perpetually renewable sub-lease created out of a perpetually renewable lease is converted into a term of 2000 years less one day. The 2000- year lease was subject to the same terms as the original lease, with the following modifications.

(a)

Termination. The tenant for the time being (but not the landlord) may

terminate the lease on any date upon which, but for the conversion by the Act, the lease would have expired if it had not been renewed, provided he gives at least 10 days written notice to the landlord. (b)

Assignment. Every assignment or devolution of the lease must be registered with the landlord or his solicitor or agent within six months, and a fee guinea paid.

(c )

or one

Breach of covenant. A tenant who assigns the lease is not liable for breaches of covenant committed after the assignment. The general rule is that the original lessee is liable for all breaches occurring during the term, even if they occur after he has assigned the lease; perpetually renewable leases are a statutory exception to this rule.

(d)

Fine. Any fine or other payment for renewal for which the lease provides is converted into additional rent and spread over the period between the renewal dates, except where the lease is granted after 1925, when the obligation for payment is void. Terms in Leases Terms or covenants in a lease may be express or implied by statute or common law Sec. 102 of the RTA provides that in every lease made under this Act there shall be implied the following covenants with the lessor and his or her transferees by the lessee binding the latter and or her executors, administrators and transfereesa)

that he or she or they will pay the rent reserved by the lease at the times mentioned in the lease.

b)

that he or she or they will keep and yield up the leased property in good and tenantable repair, damage from earthquake, storm and tempest, and reasonable wear and tear excepted.

Sec. 103 of the RTA provides for powers to be implied in the lease by the lessor it provides that in every lease made under this Act there shall be implied in the lessor his or her transferees the following powers; a) that he or she or they may without surveyors, workers or there once in every year during the term, at a reasonable time of the day, enter upon the leased property and view the state of repair of the property. b) That in case the rent or any part of it is in arrear for the space of thirty days, although no legal or formal demand has been made for payment of that rent, or in case of any breach or nonobservance of any of the covenants expressed in the lease or by law declared to be implied in the lease on the part of the lessee or his or her transferees, and the breach or nonobservance continuing for the space of thirty days, the lessor or his or her transferees may reenter upon and take possession of the leased property.

One of the commonest covenants in leases is a covenant against a lessee not to sublet or part with possession without the landowner’s consent. The Cases of City Council of Ugandan VMukiibi [1967] EA 368 and City Council of Kampala V Mukubira [1967] EA 497, provided a contrasting illustration of what constitutes parting with possession. As against landlord, the common law implies two main covenants: of quiet enjoyment and covenant not to derogate from the grant. The operation of these covenants is illustrated by the case of Shah Champshi and others V The Attorney General of Kenya [1959] EA 630 and Aldin V Latimer Clark Moorhead& Co. Ltd [1894] 2 Ch 437, Covenants not to sub-let or part with possession In the case of City Council of Kampala V Mukiibi [1967] E.A 368 The City Council, Plaintiffs, let the suit property to the Defendant subject to certain covenants, interalia that the Defendant shall not sublet or part with possession of the premises. The Council reserved to itself a right of re-entry in the event of breach of any covenant. The Council sought to terminate the lease on the ground that the Defendant in breach of the Tenancy agreement parted with possession by subletting the premises to other people for their business. The defendant denied the allegation. The issue was whether the defendant had sublet or parted with possession It was held that “ A tenant breaches a covenant not to sublet of part with possession only if he or she grants ‘exclusive possession’ to another. In Roe d. Dingley V Sales where a lease contained a proviso for re-entry in case the tenant should demise, lease, grant or let the demised premises, or any part or parcel thereof, or convey, etc. to any person whomsoever, for all or any part of the term, without the licence of the lessor in writing; and the defendant, without such license, agreed with a person to enter into partnership with him, and that he should have the use of the back-chamber and some other parts of the premises exclusively and of the rest jointly with the defendant, and accordingly let him into possession of the said premises. It was held that the lessor was entitled to re-enter. In Chaplin V Smith a lessee had covenanted with his lessor that he would not assign or underlet or part with possession of the demised premises or any part thereof. He assigned his business, that of a motor garage proprietor, to a company of which he was the managing director and in which he held a controlling interest. He carried on the business of the company on the premises, which were stated to be its registered address and on which the name of the company was exposed. He kept the key of the premises in his possession. The company agreed to indemnify him in respect of the rates and taxes. The company appeared in the valuation lists for the parish as the occupier of the premises for the purpose of poor rate. Subsequently a second company was formed of which the lessee was the managing director and which took over the business, assets, and liabilities of the first company. In negotiating for his transfer, the lessee stipulated that he should remain in possession as actual tenant of the demised premises. It was held that no interest in the demised premises had passed to the companies or either of them and that there had been no

breach of the lessee’s covenant not to part with possession of the premises or any part thereof. The decision in Chapin V Smith was based on the statement of the law in the case of Peebles V Crothwaite [1896] 13 TLR 37] to the effect that a lessee who retains the legal possession of premises does not commit a breach of covenant against parting with possession by allowing other people to use the said premises. In the case of Kampala City Council V Mukubira[1968] EA 497 ,The City Council [the Plaintiffs] leased certain premises to the first defendant. One of the covenants of the lease prohibited the lessee to assign, underlet, or part with possession of the premises or any part thereof. Since the commencement of the lease, the first defendant allowed the second defendant. Covenant of quite enjoyment At common law, there is an implied covenant against the landlord that he or she and persons claiming under him or her, shall not interfere with the tenant’s use and enjoyment of the demised premises. The case below illustrates the meaning of this covenant.. Shah Champshi Tejshi and Others V The Attorney General of Kenya [1959] EA 630 The Government/respondent granted a lease to the plaintiffs/appellants. The Plaintiffs claimed that under the lease they had an implied right of access to certain road. Later, the Government leased the adjoining land to another person (Dominion Properties Ltd). The latter blocked the Plaintiffs alleged access road. The Plaintiff sued the Government for breach of covenant of quite enjoyment. It was held that a common lessor is not liable for breach of covenant of quite enjoyment for unlawful interference with a tenant’s possession caused by another tenant unless he or she permitted the act In Harris V James (5) [1876], 45 L.J..Q.B 545, BLACKBURN, J (as he than was} said: I don’t think when a person demises property he is to be taken to authorize all that the occupier may do. If land were on an agricultural lease, and there were a requirement that the tenant should cultivate the soil as well as possible, and the tenant brought a large quantity of inodorous manaure on the land and placed it so to be a nuisance, I do not think that his landlord would be liable, for the land placed it so as to have authorized the creation of this nuisance; nor would he in the case put by Mr. Crompton, of letting ground on a building lease where the lessee created a nuisance by obstructing light and air by means of the building lease where the lessee created would be liable, because he had not authorized his tenant to build so as to obstruct the light and air of others. No Derogation from grant In the case of Aldin V Latimer Clark Muirheas& Co. Ltd[1894] 2 CH 437Munro leased part of his land to the defendant for a term of 21 years for carrying on timber trade. At the date of the lease the greater part of the adjacent land retained by Munro was open space. After Munro’s death, both portions of land were sold to the defendants. The latter proceeded to

erect building on the adjacent land in such a manner that they affected the free flow of air to the plaintiff’s timber drying sheds. The plaintiff contended that the defendant’s acts constituted either derogation from the grant’ or a violation of the covenant of ‘quite enjoyment’ It was held that at common, it is implied that when a person leases their land they undertake not to do anything in relation to the leased premises that defeats the main purpose for which the land was leased. The case below illustrat...