LEASES

AUTHOR:PETER S. WASAGA
INTRODUCTION:
APPLICABLE LAWS
• Definitions
• Essentials/characteristics of a lease
• Types of leases
• Implied conditions and express covenants
• Remedies
• Assignment and determination
• The regime of rent Acts
• Duties of the Conveyancer
APPLICABLE LAWS
• The Land Act (Act No. 6 of 2012);
• The Land Registration Act (Act No. 3 of 2012); and
• The National Land Commission Act (Act No. 5 of 2012).
• Rent Restriction Act (Cap 296
• Advocates Practice Rules
• Distress for Rent Act(Cap 293)
• The Landlord and Tenant( Shops, Hotels and Catering Establishment) Act
Chapter 301
DEFINITION OF A LEASE
• This interest in land is also known as a ‘term in years absolute’.
• It denotes exclusive possession of land for a term certain.
• S2 LA defines a lease as –The grant, with or without consideration by
the proprietor of land of the right to exclusive possession of his or her
land and includes the right so granted and the instrument granting it
and also includes a sublease but does not include an agreement to lease
• Can be created from a leasehold (sub-lease) or from a freehold.
• The essential requirement is that a lease must be for a fixed term of years
although it can include periods of less than one year,
• S.56 LA gives the owner/Proprietor of private land the power to lease his/her
land or part of it to any person for a definite period or for the life or for a
period which though indefinite,
• May be terminated by the lessor or the lessee subject to any conditions that may
be required by the Land Act or any other law or that the lessor may impose.
• Like the freehold, leaseholds are capable of subsisting , being conveyed and
created in law.
• A, leasehold can be granted by the government of public land to private
individuals, corporations, parastatals or even another organ of government
• It can also be granted by a freeholder to another individual, or even
government
• The distinctive feature in a leasehold is that a tenant is granted exclusive
possession of defined land or premises for a period of pre arranged
maximum duration
• A lease is generally capable of being assigned or subleased.
PARTIES TO A LEASE
• lessor /Landlord-Proprietor/owner of the land-Person giving a lease
• lessee /tenant- Person taking/receiving a lease;
CHARACTERISTICS/ESSENTIALS OF A LEASE-S.56 LA
• In the case of PRUDENTIAL ASSUARANCE CO. LTD VS LONDON RESIDUARY
BODY (1992) 2 AC 386, Lord Templeman defined a lease in the following manner
‘demise for years is a contract for the exclusive possession and profit of the land for
some determinate period’
• While STREET V MOUNTFORD [1985] AC 809 Lord Templeman at p.817 stated that
for a lease to exist, an occupier must be granted exclusive possession for a fixed or
periodic term in consideration of a premium or periodical payments.
THE ESSENTIAL INGREDIENTS OF A LEASE THEREFORE
ARE:
1) There must be an occupier (constructive or actual)
2) There must be exclusive possession
3) That exclusive possession must be transferred or granted by the
proprietor
4) The period of the lease must be certain
5) The premium or rental payment is a crucial term
ESSENTIALS OF A LEASE
1. EXCLUSIVE POSSESSION
• Exclusive possession is the central and crucial feature of a lease.
• Exclusive possession means the Right to use property; and to exclude anybody
from leased premises including the Landlord (save where a notice is given)
• The tenant must acquire the right of exclusive possession to the exclusion of the
landlord and all persons claiming through him
• Lord Templeman in Street V Mountford (1985)AC 809 said “whenever exclusive
possession of premises is granted for a term of a rent, then prima facie a
lease will be created
2. RELATE TO DEFINED PREMISES/INTEREST
• Must pertain to a definite interest in land which is capable of being the
subject matter.
• S56 LA gives power to lease whole or part of the land. If part of land
is being leased it shall be accompanied by a plan or other description
which the registrar deems adequate to identify the property.
3. CERTAINTY OF DURATION
• The period of the lease must be defined or capable of being defined.
• The ultimate date of expiry of the lease must be capable of being
predicted right from the start of the lease.
• Lace –vs- Chantler-An Agreement to let premises for “the duration of
the war” was held to be void due to uncertainty of the period of the
intended lease
4.THE PREMIUM OR RENTAL PAYMENT IS A CRUCIAL
TERM
• The nature of a leasehold interest is that there is a liability to pay rent to
the landlord.
• However, the rent payable under each title varies and in some instances it
is even set as Peppercorn rates if demanded which in essence means that
the land owner does not pay any rent but the government may demand
nominal rates from landowners
MEANING OF PEPPERCORN RENT AND ITS LOGIC IN
LAW
• Pepper corn rent has been provided in law under the constitution of Kenya, 2010, under paragraph
8(1)
of the sixth schedule
• Under Article 8(1) in the Sixth Schedule to the Constitution, any freehold interest in land in Kenya
held by a person who is not a Kenyan citizen shall revert to the Republic of Kenya to be held on behalf
of the people of Kenya, and the state will grant a peppercorn rent for 99 years to that individual
• A peppercorn rent can been defined as a small sum charged as "peppercorn rent” which the
leaseholder
pays to the freehold owner to rent the land upon which the leaseholder's property stands on
• It is fairly a small amount paid with the intent to make something free but some sort of consideration is
needed to make the agreement lawful
• This is because consideration is one of the essentials of a legally binding contract.
• It is therefore charged to make a lease legally enforceable.
TYPES OF LEASES
1.PERIODIC LEASES-S.57 LA
• The term of the lease is not specified.
• No agreement in writing but there is occupation and payment of rent.
• No provision is made for the giving of notice to terminate the tenancy.
• The term is from week to week, month to month, year to year or any other periodic basis to
which the rent is payable
• The period shall be the period by reference to which the rent is payable.
• In relation to agricultural land the periodic lease shall be for six months
• If the owner of land permits the exclusive occupation of the land or any part of it at a rent
but without any agreement in writing, that occupation shall be deemed to constitute a
periodic tenancy
TERMINATION OF A PERIODIC TENANCY
• May be terminated by either party giving notice to the lessee not less than
the period of the tenancy and shall expire on one of the days on which
rent is payable.
2. SHORT-TERM LEASES-S.58 LA
• Made for a term of two years or less without an option for renewal;
• Is a periodic lease;
• May be made orally or in writing.
• There is occupation and payment of rent.
• Not a registrable interest in land.
3. FUTURE LEASES-S.61 LA
• A lease may be made for a term to begin on a future date
• Not later than twenty-one years after the date on which the lease is
executed.
• A future lease, which is expressed to be for a period of more than five
years, shall be of no effect unless and until it is, registered.
4. TENANCIES AT WILL
• This arises in the case of sale agreements, where before completion
possession is given.
• These can be terminated at any time by the lessor.
• For monthly tenancies 15 days notice will be needed and for annual
tenancies 6 months notice.
5. TENANCIES AT SUFFERANCE
• Created when a tenant holds over the property past the end of the
durational period of the tenancy
• Meaning that the tenant lives in the rental property after their lease has
expired
• For example if the lease is for example 6 years and the tenant stays on
then that will be a tenant at sufferance.
• This occurs without the landlord’s permission but he collects rent anyway
• Both the Landlord and the tenant have certain rights in this situation
COVENANTS IMPLIED IN A LEASE ON PART OF THE
LESSOR-S.65(1) LA
1. Quiet enjoyment -so long as the lessee pays the rent and observes and performs the
covenants and conditions contained or implied in the lease
2. Non-derogation from grant –Not permitting any adjoining/neighboring land that
the lessor owns to render the leased land or any buildings on the leased land unfit or
materially less fit for any purpose for which they may be used
3. Duty to repair- eg roof, all external and main walls, main drains, the common parts
and common installations and facilities, including common passages and walkways
4. Fitness for habitation- at the commencement of the lease and shall be kept fit for
human habitation during the lease
5. Suspension of rent-In case of destruction of property so as to make the leased
premises or any part of it wholly or partially unfit e.g. through fire, storm, civil war,
earthquake, volcanic activity or other natural disaster
6. Fitness for purpose -If the land or building can no longer lawfully be, used for any of
those purpose for which it was leased, the lessee may terminate the lease, on giving
one month’s notice to the lessor
7. Pay all rates, taxes dues and outgoings –Outgoings means all rents, rates, taxes
and other sums due to any Government, County Government
LESSOR’S RIGHTS-S 65(2) LA
1. Right to inspect the condition of the premises and repair-Either
personally or by an agent at a reasonable time.
• In the exercise of that power, the lessor shall not unreasonably interfere with
the occupation and use of the land and buildings by the lessee
2. Right to terminate lease by serving a notice of intention to
terminate;
• If any rent is unpaid for one month after due date whether or not it has
been demanded in writing
• There is breach of lessee’s covenants by lessee for one month
CONDITIONS IMPLIED ON LEASES ON PART
OF LESSEE S 66 LA
1. Pay rent at time and in the manner specified
2. Use land in a sustainable manner and in accordance with the conditions in the
lease including not to cut down any tree unless this is necessary to enable use of the
land
3. Yield up the land and buildings in the same condition as they were when the term of
the lease began except for deterioration caused by:
• Reasonable wear and tear, fire,
• flood, explosion, civil commotion, lightning, storm, earthquake, volcanic activity or other natural
disasters
4. Keep all boundary marks in repair
5. Keep all buildings comprised in the lease in a reasonable state of repair
EXPRESS COVENANTS IN EVERY LEASE DOCUMENT
• These are the covenant expressed in the lease document and usually include implied
covenants.
• They may differ depending on the usage of the leased property.
• Purpose- implied covenants may not cover everything
• They include;
1. Users covenant
2. Insurance covenant
3. Covenant to repair
4. Covenant against assignment, transfer or otherwise parting with possession
CONTINUED EXPRESS COVENANTS
5. Covenant for renewal
6. Covenant against alteration
7. Covenant to deliver possession at the end of the term
8. Option to purchase the reversion
LESSOR’S CONSENT TO DEALING WITH LEASES
S.67 LA AND S.55 LRA
• If a lease contains a condition, express or implied, by the lessor that the lessee shall not deal
in the land without the written consent of the lessor, any dealings with the lease shall not be
registered unless the consent is obtained(s.55 LRA)
• May be consent to—
1. transfer or assign the lease;
2. enter into a sublease;
3. part with possession of the leased land or buildings;
4. change the use of the land or buildings from a use which is permitted under the lease;
5. extend, improve, add on to or in any other way develop any building beyond what is permitted
in the lease;
6. create a charge over the lease;
• The lessor shall inform the lessee, in writing, within a reasonable time
after receiving the application, whether the lessor is giving or refusing
consent.
• Unreasonable withholding entitles one to seek damages and recover
money lost
• Chantly V Ward (1913) 29 TLQ the court held that the landlord must
show a solid and substantial cause for withholding the consent
REMEDIES AND RELIEF-LESSOR’S REMEDIES
1. Forfeiture- Sec 73, LA
• It is exercised in two ways;
i. If lessee is not in occupation by entering and remaining in possession of
the land
ii. By court action
• S 74 LA-Forfeiture has the effect of determining every sublease and other
interest appearing on the register relating to the lease unless the court
sets it aside on grounds that it was procured by fraud or grants relief
under S 76 LA
• Lessor must give one month notice under s 75 LA of not less than 30
days.
The contents of the Notice before exercising the right of
forfeiture.
✓ Specifying the breach complained of
✓If breach is capable of remedy require the lessee to remedy within a
reasonable period specified in the notice
✓In any case other than default in rent payment require payment of
compensation in money for breach
RELIEF AGAINST FORFEITURE S 76
• Application by lessee
• Court may grant or refuse to grant relief) or by sublessee or chargee (court
may vest the property on the sublessee or chargee so long as they are not
involved in breach.
• This section applies whether lease is registered or not
• The court may grant or refuse to grant the relief
• The relief against forfeiture shall have effect notwithstanding any stipulations or
agreement to the contrary and whether the lease is registered or not.
Considerations by the court in granting or refusing to grant the relief
i. Having regards to the proceedings
ii. Having regards to the conduct of parties
iii. Having regards to the circumstances of the case
• The court in granting the relief may grant it on such terms as it thinks fit.
Acceptance of rent by the lessor after the service of notice under s.75 of LA
• This does not operate as a waiver of the right of forfeiture unless the lessor has by any other
positive act shown an intention to treat the lease as subsisting
Effects of Unlawful Eviction-s.77 LA
• This shall immediately relieve the lessee of all the obligations to pay any rent and other
monies due under the lease or perform any condition and covenants under the lease
REMEDIES AND RELIEFS CONTINUED
2. Distress for Rent
• The Lessor is allowed to seize and sell the movables in the leased premises for payment
of rent arrears due.
• Right given under S.3 of Distress for Rent Act(Cap 293)
• The lessor carrying out the distress is also known as the distrainor.
• The remedy or distress for rent permits the distrainor to levy distress without the
necessity for court proceedings.
• This is the Kenyan position which mirrors the position under common law in England.
• It is important to note that the distrainor must be entitled to reversion at the time the rent is
due.
• Gusii Mwalimu Investment Co. Limited & others V Mwalimu Hotel Ltd Civil Appeal no.
160 of 1995 –destrained goods must remain in situ for at least 10 days.
• Distress must be carried out within 6 months after expiry of lease
• To avoid abuse of the remedy for distress of rent by the distrainor or the Lessee the statute
has strict provisions preventing interference with levy of distress and against wrongful
distraint.
• Refer to the Distress for Rent Act (cap 293) on goods exempted from distress, goods
absolutely privileged and goods conditionally privileged
REMEDIES AND RELIEFS CONTINUED-LESSOR’S
REMEDIES
4. Action for recovery for rent arrears-
• Subject to the limitation period of 6 years under the Limitation of Actions Act(Cap 22).
• Landlord may only sue after distraining if the goods already sold are inadequate to meet
the rent arrears
5. Action for damages-
• To put the landlord in the position he would have been had the breach not occurred
6. Injunction to restrain the committing of a breach
LESSEE’S REMEDIES AND RELIEFS
1. To institute proceedings for injunction or damages
2. Repudiate the agreement altogether
3. S77 LA a lessee unlawfully evicted shall be relieved from paying rent
Remove Watermark Wondershare
PDFelement
THE LANDLORD AND TENANT( SHOPS, HOTELS AND CATERING ESTABLISHMENT)
ACT CHAPTER 301
• Regarded as controlled tenancies
• S 2(1) of the Act-“controlled tenancy” means a tenancy of a shop, hotel or catering
establishment—
• – (a) which has not been reduced into writing; or
• – (b) which has been reduced into writing and which—
• • (i)is for a period not exceeding five years; or
• • (ii)contains provision for termination, otherwise than for breach of covenant, within
five years from the commencement thereof; or
• • (iii)relates to premises of specified by the Minister as controlled tenancies
• No tenancy to which the Government, the Community or a local authority is a party,
whether as landlord or as tenant, shall be a controlled tenancy
Tenancy agreement in Controlled Tenancies.
• May be in prescribed form.
• S4 (Cap 301)-Termination or alteration of terms of a controlled tenancy to take effect 2
months after service of tenancy notice RENT RESTRICTION ACT (CAP 296)
• The purpose of the Act is to restrict the increase of rent, right to possession and
creation of premiums and for fixing of standard rents in relation to dwelling houses.
• The Act applies to dwelling houses which have rent of Kshs. 2,500/= and below
• Increase in rent shall only be after a rent assessment.
• The Act controls the management of tenancies for the houses within its ambit.
TERMS AND CONDITIONS TO BE IMPLIED IN EVERY TENANCY NOT REDUCED IN WRITING OR NOT IN
CONTROLLED FORM
i. That the premises are fit for habitation and comply with the laws relating to health in all respects.
ii. That where the premises are destroyed by fire, civil commotion, or accident, through no negligence
on the part of the lessee, any liability to pay rent shall be suspended until the premises are again
made fit and habitable.
iii. The lessee shall have quiet enjoyment of premises provided that he complies with express or implied
covenants.
iv. The lessor shall not use adjoining land or premises in a way which would render leased premises unfit
for the purpose for which they were let.
v. The lessor shall be responsible for all repairs to roofs, main walls, main drains, main electric wiring and
structures, and shall be responsible for all necessary renewals to the premises.
(vi) The lessee shall be responsible for all internal repairs and decorations, fair wear and
tear excepted.
(vii) The lessor shall be responsible for the repair, maintenance, cleaning and lighting of
common parts where part of a building is let.
(viii) The lessee shall pay rent for the premises in advance. The lessor shall pay all rates,
taxes and similar outgoings, unless the lessee is responsible therefor under any written
agreement.
(ix) The lessee shall keep the fixtures and fittings in good and tenantable repair.
(x) The lessee shall keep the fixtures and fittings in good and tenantable repair.
(xi) The lessee shall permit the lessor or his agent and his workmen to enter the premises
and to examine or repair the same at all reasonable times after giving reasonable
notice thereof.
(xii) (The lessee shall not transfer, part with possession, or sublet the premises or any part
thereof without the consent of the lessor, which consent shall not be unreasonably
withheld.
DUTIES OF LESSOR’S ADVOCATE
1. Obtain precise instructions from your client on;
• Description of the property(obtain copy of title)
• Portion to be leased(if not whole)
• Rent to be paid
• Proposed use of the property by lessee
• Covenants
2. Draw the lease to reflect the wishes of your client
• ensure all the essentials of a lease are included and
• the covenants protect your client’s interests
3. Obtain all requisite consents eg consent to lease
4. Obtain stamp duty from the Lessee
5. Register the lease
DUTIES OF THE LESSEE’S ADVOCATE
1. Investigate landlord’s title
• whether the Landlord has capacity to grant the Lease
• . whether there are any encumbrances
• what consents are required
• whether there are any restrictions or provisions regarding the user of the premises and
therefore to determine whether the land can be used for the purposes intended by the
tenant
2. Approve draft lea
3. Advice your client on the contents of the draft
Sykes V Midland Bank & Trustee Ltd (1970) All ER471 -there was a prohibition
on any other use of the premises unless permission is granted by lessor and head
lessor. The former gave consent while the latter did not. Held the solicitor ought to
have explained the consequence of this clause
4. Collect disbursements from your client eg stamp duty, registration fees etc
5. Ensure that the necessary consents- have been- obtained by Landlord
6. Later: Approval of Renewal of Lease.
7. Later: Drafting of Instrument of Surrender, engrossing and having it executed
by Tenant, stamping and registering it.
DUTIES OF ADVOCATES TO AVOID CONFLICT OF
INTEREST
• Rule 9 of the Advocates Practice Rules -No Advocate may appear in
any matter in which he may be called as a witness to give evidence
• Francis Mugo & 22 others V James Muthee & 3 others (2005 )e KLRapplication for Andrew Musangi to
cease acting for plaintiff because he drew and witnessed a lease between the defendant and other
parties relevant to the suit and would be a witness in the suit
ASSIGNMENT AND TRANSFER OF LEASES
• What is the difference?
• Transfer- passing of lease from one party to another
• Assignment- transfer of rights and obligations to the leased property. The
assignee acquires the same rights as the assignor.
• Effect of the two is more or less the same.
• The subject of transfer or assignment is the interest held in the lease and the
reversion.
• S69 LA transfer or assignment of reversion or part of it by lessor imposes the
covenants and rights to benefits on the assignee against the lessee.
• Lessor must be notified of transfer or assignment, registration alone does not
satisfy the required notice(s70LA)
• S71 LA transfer or assignment of lease or part of it by lessee relinquishes the
transferor or assignor from the common law rule that they remained liable for
the breaches of the assignee or transferee
• The assignor/transferor is discharged from the rights and obligations of the lease
from date of transfer/assignment unless he remains in possession. S71 LA
• f lessee vacates the land before the termination of lease he shall remain liable to
perform all obligations including payment of rent for the next 1year unless the
lease provides for a shorter period or the lessor leases the property to another
person before the end of the year.
• Under common law the Lessee would be liable for breaches committed after
assignment or transfer but the LA liability only falls on lessee before assignment
or transfer.
• Transfer of lease shall be in Form LRA 63 set out in the Sixth of
Schedule of the Land Registration Regulations
• Accompanied by documents or approval as may be required under the
Act, these Regulations, or any other written law.
REGISTRATION OF LEASES
• S58 LA - leases of more than 2 years should be registered
• S54 LRA- after registration of lease with a requirement for consent of Lessor no dealing
will be registered without consent of Lessor.
• S30 LRA - no Certificate of Lease shall be issued unless the lease is for a certain period
exceeding 25 years.
• S32 - the Registrar shall note the disposition on the original and duplicate Lease or
Charge.
• S7 LA- title to land may be acquired through along term lease exceeding 21 years.
WHAT IS THE EFFECT OF NON-REGISTRATION OF A
LEASE?
• S43(2) LRA -No instrument affecting any disposition of private land under
this Act shall operate to sell or assign land, create, transfer or otherwise
affect land, lease or charge until it has been registered in accordance with
the laws relating to registration of instruments unless the disposition is
exempt from registration
• S36(2) LRA- unregistered instruments shall be construed as contracts.
FORMS IN REGISTRATION OF A LEASE-REGULATION 76 OF LAND REGISTRATION REGULATION
• A lease other than Iong-term lease under section 54(5)of LRA, shall be in Form LRA 62
set out in the Sixth Schedule.
• It shall be accompanied by the following documents
1. original title documents or other documents relating to the land;
2. where applicable, a land rent clearance certificate;
3. a land rates clearance certificate;
4. where applicable, the consent of the head lessor;
5. any other consent required for registration unless a particular consent has been endorsed
on the lease document or has otherwise been dispensed with by the Registrar under the
provisions of the Act
5. ID and PIN of the parties
6. 3 passport size photographs of the parties
DETERMINATION OF LEASES
• A lease may come to an end by:
1. Expiry
2. Surrender
3. Merger
4. Disclaimer
5. Frustration,
6. Forfeiture
7. Notice
DETERMINATION OF A LEASE CONTINUED
1. Forfeiture: S73 of LA forfeiture available where
• the lessee commits a breach of covenants
• adjudged bankrupt or goes into liquidation.
2. Surrender:
• The lessee voluntarily yields up the premises to the lessor. It can be express or implied.
• Under S 64 LA surrender of a lease for renewal shall not affect a sublease if the latter
will expire on or before the new head lease expires or if the sublease is periodic which
means notice can be given for its termination
• A surrender of a lease shall be in Form LRA 65 set out in the Sixth Schedule.(Land Registration
(General)Regulations,2017
3. Expiry:
• The lease lapses because of effluxion of the term/time
• Periodic tenancies and tenancies at will are an exception since they do not have
• an agreed term
4. Merger:
• Occurs where there is a vesting of the reversion and the leasehold interest in the same
person at the same time eg the lessee acquires the reversion
5. Disclaimer:
• By trustee in bankruptcy- S 58 of Bankruptcy Act cap 53 if the property is burdened with
unnecessary covenants making it unsellable
Remove Watermark Wondershare
PDFelement
6. DETERMINATION-NOTICE & FRUSTRATION
Notice
It is required for fixed term leases if the lease agreement provides as such.
Under periodic tenancies s 57(4) LA requires notice equivalent to the
period of tenancy
FrustrationS65(e) LA destruction of property through fire, earthquakes, civil
commotion etc entitles a lessee to terminate the tenancy if after 6 months
it has not been repaired by giving 1 month notice
LICENCE
• A license is a relationship whereby the licensee is granted a right to enter into or use the
premises without becoming entitled to exclusive possession
• No mention of it in respect of private land though it is covered under part III of the Act
dealing with administration of public land. Licences can be granted of public lands
• S2 LA defines a license as permission given by the commission(for public land) and
proprietor(for private land) allowing the licensee to do some act in relation to the land
which would otherwise be a trespass but does not include an easement or profit
Remove Watermark Wondershare
PDFelement
• Basically it is a temporary permission to access the land of another without exclusive
possession though a fee may be payable and the period determined or determinable
• A licensee has no interest in the premises but he can exclude the whole world from the
premises except the licensor
• Licencee obtains only a personal privilege of occupation in the form of a licence which
may be which may be revoked according to the express or implied terms of the
agreement
• A licence cannot be assigned
TYPES OF LICENSES
1. Simple (or bare) licence
• This is given gratuitously and is not coupled with any grant or interest.
• It is revocable by the licensor at will.
2. Contractual licence (a licence for value)
This is an implied kind of licence e.g. where X buys a cinema ticket for Y so as to view a
performance.
LEASES VS LICENSES
• Exclusive possession is the central and indispensable feature of a lease.
• The lessee must acquire a right of possession of the property to the exclusion of the
lessor.
• If the lessor visits the property without lawful authority (notice must be given)he can be
sued for trespass
• Possession alone does not result in a lease. If it is not exclusive then a license is created.
• The exclusiveness of possession also depends on the degree of control.

CASE LAW
1. DESAI V COOPER (1950)214 KLR 32-
The defendants did not have keys to the front door of a shop and could only access it from the back.
They could not enter the front when they pleased but had to go to their portion through the plaintiff’s
portion. The plaintiff sought to recover the portion occupied by the defendants. The Court held that
even though the defendants had exclusive use of a portion of the premises, they did not have exclusive
possession and
were licensees not tenants.
2. HECHT V MORGAN(19957) EA 741-
‘paying guest’ . The respondent lodged a complaint under the Central Rent Tribunal Board against his
landlord. The tribunal had to decide whether it had a jurisdiction (only if it was a lease). The respondent
proved that he had exclusive possession and the court of appeal held in his favor
DISTINCTION
• The main difference is that there is no exclusive possession in the case of a licence.

LEASE VS LICENCE
• Exclusive possession of premises is granted
for a term of a rent,
• Can assign /transfer
• Confers more rights- quiet possession, non
derogation from grant, repairs, fit for
habitation etc
• Not easily revoked
• Permission to use premises
• Cannot assign/transfer
• Rights limited
• Can be revoked upon reasonable notice
LEASE AND ASSIGNMENT
• In a lease only a term of years is granted to the lessee and the lessor has a right of
reversion after the expiration of the term granted.
• An assignment conveys or assigns the entire leasehold interest to the purchaser and the
vendor has no right of reversion.
• The vendor can only assign the unexpired residue of his term.
A LEASE, SUB-LEASE AND UNDERLEASE
• A lease is a direct relationship between the lessor and the lessee.
• A sub-lease is created when a Lessee leases out a portion of his premises.
• The main lease is known as head lease and a Sublease does not operate as an assignment
• A sublease cannot subsist beyond the head lease, in instances where it is extended or
renewed, it shall expire at the end of the original/head lease
• Under section 67, the tenant may have to seek consent of landlord to sublet if there is a
covenant requiring him to seek consent before subleasing. The landlord shall not withhold
such consent unreasonably and must give the tenant a written response to his request within
a reasonable time
UNDER-LEASE
• An under-lease is created when a Lessee leases out part of his term of years or part of
the remainder of his term.
• An underlease is a lease that is not granted by a freehold owner but by a person who is,
himself, a tenant. so it is a lease which is granted out of another lease
• An underlease anticipates the existence of a head lessor.
• The under lessor is a Lessee of the head lessor.