lease in transfer of property act LLB Notes

  

        LEASE

Definition of lease ;-

              A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of 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.

Lessor, lessee, premium and rent defined : -

             1) Lessor : The transferor is called the lessor,

             2) Lessee: The transferee is called the lessee,

            3) Premium : the price is called the premium, and;

            4) Rent : the money, share, service or other thing to be so rendered is called the rent.

Essentials of the Valid Lease :- 

1) The subject matter of lease must be an immovable property.  

 2)Immovable property must be transferable Property.

 3)There must be Transfer of right to enjoy such property.

 4)Lease must be made for a certain time, express or implied or in perpetuity. 

 5)The Consideration which may be premium a rent or both.

6)The lessee must accept the transfer.










Duration and termination of lease;- u/s 106

 lease for agricultural or manufacturing purposes;-

 in the absence of a written contract or a local usage to the contrary the a lease of immovable property for agricultural or manufacturing purposes is deemed to be a lease from year to year terminable on the part of either lessor or lessee by six months notice.

lease for any other purpose;-

 A lease of immovable property for any other purpose is deemed to be a lease from month to month terminable on the part of either lessor or lessee by fifteen days notice.

the period of notice commences from date of receipt of notice. Such notice must be in writing sign by or on behalf of the lessor and deliver to the lesse or to one of his family member or servant at his residence either by post personally. If such delivery is not practicable than affixed to a conspicuous part of the property.

How lease can be made? u/s 107

 If there is a lease of immovable property for a year, or for a term which may be exceeding one year or may be reserving a rent for a year, then lease can be made only by the registered instrument.

 All other lease of immovable property can be made either by the registered instrument or by an oral agreement which is accompanied by the delivery of possession.

If  a lease is made by a register instrument or where there are more than one instrument then each such instrument shall be executed by both the lessor and lessee.

 Rights and Liabilities of Lessor;- u/s 108

Following are rights and liabilities of lessor.

(i) duty to Material Defect ;-

Lessor is bound to disclose to lessee any material defect in leased-property especially when lessor is and lessee is not aware of such defect.

(ii) duty to Delivery of Possession;-

On lessee’s request, lessor bound to deliver the lessee possession of leased-property.

(iii) duty to secure possession / No interruption into possession ;-

If lessee pays rent according to lease, and performs those contracts, which are binding on lessee. It is the duty of lessor not to interrupt in to lessee’s possession of leased-property during lease.

(iv) Rights of heirs of deceased lessee;-

If lessee dies during lease and his rights of lease are transferred to his heirs, lessor is bound to protect such rights and perform his duties regarding heirs of deceased lessee.

 Rights and Liabilities of Lessee

Following are rights and liabilities of lessee;

(i) Right to get Accession to Leased property;-

If any accession is made to leased-property during continuation of lease and if such accession is according to that law, which is in force and which relates to alluvion, lessee is entitled to enjoy such accession.

(ii) Right in case of Destruction or unfitness of lease-property;-

If fire, tempest, flood, violence of any army violence of a mob or violence of other irresistible force causes complete destruction or permanent unfitness to any material part of leased-property, lease becomes void at option of lessee. However, if such destruction is cause by the act or default of lessee than he is not entitled to make lease void.

 (iii) Right to deduct  Expenses for Repairing of Leased-property;-

Within reasonable time after notice, if lessor neglects to make any repairs, which he is bound to make to leased-property, lessee can make such repairs himself, and can deduct expense of a such repairs with interest from rent or can recover if from lessor.

(iv) Right to deduct the amount which lessor is bound to pay;-

If the lessor neglect to make any payment which he is bound to make and if lessor does not make such payment and such payment is recoverable from lessee or against leased property lessee may make such payment him self and  deduct it with interest from rent or otherwise recover it from lessor.

(iv) Right to remove things attached to earth;-

The lessee may even after the termination of lease can remove all things, which he has attached to earth-provided that he leaves the property in that state in which he received it.

(v) Right to crops;-

When a lease of uncertain duration determinates by any means other than the default of the lessee .he or his legal representatives is entitle to all crops planted by lessee and also entitle to free ingress and egress to gather and carry them.

(vi) Right to transfer interest;-

The lessee may transfer absolutely or by way of mortgage or sublet the whole or part of his interest in the property. However his liabilities relating to such interest continue and do not cease to end.

(vii)duty to Disclosure of Fact;-

Lessee is bound to disclose to lessor any fact, when such fact is about nature or extent of that interest, which lessee is about to taker, and when such fact increases value of such interest.

(viii)duty to pay Premium or Rent;-

At proper time and palace, lessee is bound to pay or tender premium or rent to lessor or his agent.

 (x) duty to keep and restore the property in the same condition;-

 The lessee is bound to keep and on termination of lease to restore the property in that condition in which it was when its possession was given to him.

(xi)Duty to give notice of defects;-

Lessee should give lessor the notice of defect regarding condition of leased property and if such defect has been cause by any act or default t of lessee or his agent he is bound to make it good within 3 months after such notice.

 (xii) Duty to allow inspection;-

At all reasonable time during term of lease lessee  should allow the lessor or hid agent to enter upon and to inspect the condition of leased property.

(xii) Notice of encroachment and interference;-

Lessee should give lessor a notice about proceeding for recovery of leased-property, about encroachment against lessor’s rights in leased-property or about interference with lessor’s rights in leased-property.

(xiii) Duty to Use leased-property for same purpose;-

Lessee should use leased-property and its products in such manner as a person of ordinary prudence would use them if they were his own but he must not use or permit another person to use the property for a purpose other than that for which it was leased. Lessee should not commit any act, which can be destructive or injurious to leased-property.

(xiv)Duty not to erect the permanent structure;-

Without the lesssor consent the lessee should not erect any permanent structure on leased property except for agricultural purpose.

(xv) Duty to deliver possession;-

On termination of lease the lessee is bound to deliver the possession of the property to the lessor.

Determination or termination of lease ;- u/s 111  

The lease can terminate in the following ways;

1) By lapse of time;-

When the time period of the lease is expired.

2) On happening of an event;-

When the time period of the lease is limited conditionally  on the happening of some event than the lease will terminate on the happening of such event.

3) On termination of lessor’s interest;-

When termination of the interest of the lessor in the property depends on happening of an event than the lease will be terminate on the happening of such event.becuse the general rule is that a person cannot grant to another a larger interest than he himself possesses.

4) By merger;-

When the interest of the lessee and the lessor in the whole of the property become vested at the same time in one person in same right. It is known as merger .

5) By express surrender ;-

The lease may be terminate by express surrender . express surrender take place when the  lessee yield up his interest under lease to the lessor by mutal agreement .

6) By implied surrender;-

The lease may terminate by implied surrender .Implied surrender take place when the lessee relinquished the possession of the leased property.

7)By expiration of time given in notice;-

The lease may terminate on the expiration of time given in notice to terminate the lease.

8) By forfeiture;-

The lease may  terminated by the way of forfeiture in the following cases .

I. When the lessee breaks and express condition which provides that in case of breach the lessor may re enter.

II. When the lessee renounces his character by sets up the title to the property in a third person or in himself.

III. When  there is a provision in the lease that on the lessee becoming in solvent the lessor may re enter.

Relief against forfeiture for non-payment of rent;— u/s 114

Where a lease of immoveable property has determined by forfeiture for non-payment of rent, and the lessor sues to eject the lessee, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment, pass an order relieving the lessee against the forfeiture; and thereupon the lessee shall hold the property leased as if the forfeiture had not occurred.

Relief against forfeiture in certain other cases:-u/s 114-A

Where a lease of immovable property has determine by forfeiture for a breach of an express condition which provides that in case of breach lessor, may re enter, No suit for ejectment shall be field unless the lessor serves on the lessee a written notice indicating the breach complained of and, if the breach is capable of remedy , requiring the lessee to remedy it. If the lessee fails to remedy the breach within a reasonable time, then alone shall the lessor be at liberty to file a suit for ejectment of the lessee,

Effect of holding over;- u/s 116

Definition of holding over;-

If the lessee is still in possession of the property even the lease is over it is called holding over.

if a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased.

Illustrations

(a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs. 100. The five years expire, but C continues in possession of the house and pays the rent to A. C's lease is renewed from month to month.

(b) A lets farm to B for the life of C. C dies, but B continue in possession with A's assent. B's lease is renewed from year to year.