Land Law

Chapter Three: Leasehold

Ali Oday
 Introduction
• In the common law real estate rights are broadly classified as freehold, unlimited
right over property, and leasehold which is a right to the real property limited by
time.
• Generally lease is defined partly as estate/right in land which endures for a fixed
period of time, such that its maximum duration is known before the term begins.
There are three essentials for a legal lease: the tenant must have exclusive
possession, the duration of the term must be certain, and the legal formalities
must be satisfied.
•
• The word “lease” depending on the context in which it is used, means either
leasehold interest-a term of years- or the document which creates the interest.
Similarly, the word “tenancy” changes its meaning with the context. Some times
both may be used interchangeably in case of lease of a house. Lease in this
chapter shall mean lease of a land or ground, while tenancy refers to the lease of
a house
 Obligations of Lessor

• A. Delivery of property and warranty of peaceful enjoyment

• The lease imposes on the lessor various obligations all of which spring from a
single principle: the lessor is bound to procure for the lessee the enjoyment of the
premises for the duration of the lease. (refer article 526, 528)
• B. Repairs

• A house let needs a periodic repair and maintenance for its enjoyment and
habitability. The lessor shall maintain the immovable in good condition and make
therein during the currency of the lease such repairs as are necessary and are not
repairs incumbent upon the lessee. Basically, the duty to repair a house leased
may be determined by the contract of lease. Hence, based on the contractual
agreements, both the lessor and the lessee are duty bound to repair the house (see
article 529 Civil Code)
 Obligations of the Lessee

• A. Necessary Care

• The lessee can do nothing which diminishes the usefulness or agreeableness of the
premise let. To emphasize this point the code under 544 underlines two things, first
that the lessee should use the property with “care” (article 544 CIVIL Code) and for the
“purpose” it is intended to be used (see Article 541 of Civil Code). Secondly, the lessee
may not make alterations in the immovable or its mode of exploitation that would
extend beyond the period of lease (see article 542 of the civil code). In particular, the
lessee is duty bound to furnish the house in a way that suits its nature and purpose.
• B. Payment of Rent

• A lease is made generally for consideration and receiving rent is an important

benefit to the lessor. Hence payment of rent is second important obligation of the
lessee (Article 547 of civil Code). The time and amount of rent shall be decided by
the free agreement of the parties in their agreements.
 Landlords Remedies for Breach of covenant

• English land law established certain remedies that landlord has the right to
claim for the breach of covenant made by the tenant.

•
• Distress and commercial rent arrears recovery: The remedy of distress allows
a landlord to enter the land of his tenant (any tenant) and seize goods found
there in order to sell them for the purpose of paying any arrears of rent. It
requires no court proceedings but is subject to many restrictions, both under
common law and imposed by statute.
• For example: distress must be levied between sunrise and sunset; entry must not
be forcible (unless the landlord has already gained entry and is forcibly ejected –
Khazanchi v. Faircharm (1998)); and certain goods are exempt, especially the
tenant’s ‘tools of the trade’ and goods in actual use.
• Likewise, a subtenant’s property may not be seized by a head landlord, although
an innocent stranger’s goods may be seized, subject to the right of the owner to
claim their return. Importantly, resort to distress by the landlord is a clear
affirmation of the continuation of the landlord and tenant relationship and,
therefore, excludes the remedy of forfeiture (which seeks to end that
relationship).
a) Action for arrears of rent: The landlord can enforce the covenant to pay rent by
bringing an action to recover arrears of rent either in the High Court or county
court, depending on the amount owed.

b) Action for damages: The landlord may sue for damages for breach of every
covenant other than the covenant to pay rent.
a) Injunction and specific performance: At the discretion of the court, a landlord may obtain
an injunction to prevent the breach of a restrictive covenant by the tenant, as where the
landlord secures an injunction against the keeping of animals on the land contrary to a
leasehold covenant

b) Forfeiture: the most powerful weapon in the armoury of the landlord in the event of a
breach of covenant is the remedy of forfeiture. In principle, this remedy is available for
breaches of all covenants, including the covenant to pay rent, and the effect of a successful
forfeiture of
the lease is to bring the lease to an end.
 The Tenant’s Remedies for Breach of Covenant

• Under English law tenant remedies for breach of covenant by the landlord are
less extensive than those of lardlord and are based on the normal contractual
remedies available to any person who has suffered loss by reason of a breach of a
binding legal obligation
• Damages for breach of covenant: The tenant may sue the landlord for damages
at common law for any breach of covenant that causes loss, and the measure of
damages is that which puts the tenant in the same position as if the breach had
not occurred (Calabar v. Stitcher (1984)). In the context of damages for breach of
the landlord’s repairing obligations, this means the tenant should be
compensated for the loss of comfort and convenience that they would have
enjoyed had the repairs been undertaken. This can sometimes be reflected in a
reduction in rent.
• Action for an injunction: The tenant may sue for an injunction to stop a
continuing or threatened breach of covenant by the landlord. As with all
equitable remedies, this lies at the discretion of the court
• Action for specific performance: It is clear that the tenant may claim specific
performance of a landlord’s covenant where this is consistent with the
supervisory jurisdiction of the court. Such an order has been granted to enforce
performance of a landlord’s repairing covenant (Jeune v. Queens Cross Properties
(1974)).
• Retention of future rent: Following Lee-Parker v. Izzet (1971), if the landlord is
in breach of a covenant to repair, thetenant may carry out the necessary repairs
and deduct the cost thereof from future payments of rent.
 Termination of Lease Contract

• A contract of lease may be terminated for various reasons. The following are
some of the reasons stated in the code:

 Total loss or destruction of the property (531)

 Failure to observe contractual agreements by the lessor

 Failure to observe contractual agreements by the lessee

 Expiry of lease term (551, 559)

 Termination upon notice, for indeterminate lease agreements

 Exercise
• Read Articles 521-573 of the Somaliland Civil Code that states the leases in
General.