LEASES

• S.3(5) of the Land Act defines a leasehold

tenure as a form of tenure where one party
grants to another exclusive possession of land
for a period usually but not necessarily in
return for a monetary consideration called
rent.
 Fixed term lease v Periodic lease
• A fixed term lease is one whose duration is
fixed by the parties at the onset so that once
the term expires the lease comes to an end.
• A periodic lease is a lease which continuously
renews from one term to another until
terminated by proper notice served by either
party.
• There are other tenancies which do not fall in
either of the above. They include:
Tenancy at will v Tenancy at sufferance
• A tenancy at will is implied where a landowner
allows another person to enter into
possession as a tenant without specification of
the terms of the tenancy agreement
• Either party may terminate such a tenancy at
any time.
 Cont’d
• A tenancy at sufferance is implied where a
former tenant remains in possession after the
expiration of a fixed term without the consent
and without the objection of a land owner. It
is terminable at any time without notice.
Leases distinguished from Licences
• A licence is permission to enter another’s land
for some specified purpose which otherwise
would become tresspass.
• A lease creates an interest in land and a licence
does not.
• A licence unlike a lease only binds the licensee
and the licensor but not other persons dealing
with the land.
• A licensee cannot sue in trespass.
 Essential features of a lease
1. Duration
• At common law, a lease must have a certain or
ascertainable beginning and ending.
• This requirement has been criticised in several
English cases as unnecessary and in some cases
judges have attempted to give it a broad
interpretation
• Lace v Chantler [1944]1 ALLER 305
• Ashburn Anstalt v Arnold and Another [1988] 2
ALLER 147
 Cont’d
• S.3(5) c states that the duration of a leasehold
tenure is usually but not necessarily defined
by reference to a specific date of
commencement and to a specific date of
ending.
• This implies that parliament intended to
dispense with the common law requirement
that the beginning and ending of a lease must
be certain.
 2. Exclusive possession
• This is a right to use land to the exclusion of
everyone else including the land owner for the
duration of the grant.
• This is what distinguishes a lease from a licence.
• Whether the occupier has exclusive possession
depends on the intention of the parties
objectively determined from all the terms of their
agreement and the surrounding circumstances.
 Cont’d
• In Street v Mountford [1985] 2 ALLER 289
court concluded that a grant of exclusive
possession was the determinant whether an
occupant was a licensee or a lessee.
 Cont’d
• If the landowner retains general control over
the premises it is a strong indication that the
occupier has no exclusive possession and
therefore he or she is a mere licensee.
• City Council of Kampala v Mukiibi [1967] EA
368
• City Council of Kampala v Mukubira and
another [1968] EA 497(U)
• Errington v Errington and another[1950] 1 KB
 Cont’d
• The fact that the owner retains a right of
access for certain purposes or occasions does
not necessarily mean that the occupier does
not have exclusive possession .
• As to whether a grant of exclusive possession
is conclusive of a lease has generated much
controversy in England.
 Cont’d
• In this case court also conceded that there
could be exceptional circumstances in which a
person with exclusive possession could be a
licensee especially where the parties had no
intention to enter into a contract e.g family
arrangements.
• Ugandan courts are yet to consider whether a
grant of exclusive possession is conclusive of a
lease.
 Cont’d
• S.3(5)c of the Land Act that defines a
leasehold as a tenure under which a land
owner “granted another person exclusive
possession” seems to support the proposition
that exclusive possession is conclusive of a
lease.
 Creation of a Lease
• A lease can be created by contract or by operation
of law. (S.3(5)a).
• A contract to grant a lease may be oral or written.
• It may also be inferred from the conduct of the
parties.
• Tenancy may also be created by estoppel. This a
well established common law principle that where a
person enters onto land as a tenant of another both
parties are estopped from denying that a lease
exists
 Cont’d
• There must be evidence of the parties conduct
from which it would be established that the
parties recognised each other as landlord and
tenant.
• In Pardhan Jivraj v Dudley- Whelpadale (1920
-29) 3 ULR 193 it was held that payment and
acceptance of rent provided the requisite
evidence that the plaintiff regarded each
other as landlord and tenant.
 Cont’d
• The effect of a tenancy by estoppel is that
neither the tenant nor the landlord can set up
lack of title in the other as a defence to an
action for breach of covenant or for rent due.
 Registered leases
• Leases over land registered under the RTA are
created subject to the provisions of the Act.
• S.101 of the RTA empower a proprietor of land
to lease or sub-lease it by executing the
prescribed forms.
• S.54 is to the effect that such a lease can only
create an estate in the land when it is
registered.
Unregistered lease ( Equitable or informal
lease)
• At common law a purported lease that does
not comply with formalities merely operates
as a contract.
• Failure by either party to comply with the
agreement could result in an action for
damages.
• In equity, failure to follow legal formalities to
create a lease does not necessarily render the
lease void .
 Cont’d
• Equity treats as done that which ought to be
done.
• In Walsh v Lonsdale court held that though the
agreement was ineffective to create a legal
lease it was effective to bring into existence an
equitable lease. In the eyes of equity the parties
were already landlord and tenant subject to the
same terms and remedies they would have had
if their lease had been created by deed.
 Cont’d
• Souza Figueredo & Co Ltd v Moorings Hotel
Co Ltd
 RIGHTS AND OBLIGATIONS OF A
LANDLORD AND TENANT
Conditions and Covenants
• The terms of a lease may be expressed as
conditions or covenants
• Conditions are terms of a lease which are so
fundamental breach of which entitles the innocent
party to terminate the lease.
• A covenant is a term of a lease agreement whose
breach does not warrant the innocent party
terminating the lease unless the agreement
expressly gives that right.
 Express covenants (terms)
• These are those which are stipulated in writing
or orally in the agreement
• Parties in a lease are free to incorporate any
terms in the lease provided that the terms are
not contrary to any rule of law.
• Certain terms commonly found in formal lease
agreements are set out in the ninth schedule
of the Act.
Covenants implied against the landlord

Quiet enjoyment
• This covenant implies that the landlord and
those claiming through him/her will not
interfere with the tenant’s possession.
• The breach of this covenant takes various
forms.
• Opinya v Mukasa CC No. 167 of 1964
• The Kampala Cotton Co. Ltd v Privinlal
Madhvani CC No.485 of 1952
 Cont’d
• Where the interference with the tenant’s
possession is due to unlawful activities of
other persons, the landlord is not liable for the
breach of covenant of quiet enjoyment.
 No derogation from grant
• This means that the landlord will not frustrate
the use of the land for the purposes that in
the contemplation of both parties, it was let.
• The covenant is normally implied in a situation
where the landlord leases part of his or her
land and retains the other part.
 Cont’d
• The effect of the covenant is that the landlord
must desist from carrying on activities on the
land retained that renders the part leased
materially less fit for the purposes for which it
was leased.
 Cont’d
• Telex (Australasia) Pty Ltd v Thomas Cook&
Sons (Australasia) Ltd (1970) 2 NSWLR 257
• The covenant not to derogate from grant is
implied only where the tenant uses the land
for a purpose that was within the
contemplation of both parties at the time the
lease was entered into.
 Fitness for Human Habitation
• Where premises are rented fully furnished,
common law implies against the landlord that
the premises are fit for human habitation.
• This covenant is implied only at the beginning
and not throughout the term.
 Cont’d
• S.103 provides for powers implied in the
lessor
• Premises are unfit for human habitation if
they are in such a state that they pose a risk of
personal injury or to hygiene.
 Covenant implied against the tenant
• These are provided for under s. 102 RTA
• Parties to a lease agreement may by express
declaration in the lease exclude or modify any
or all the covenants implied under the RTA
• At common law it is implied against the tenant
that he or she will pay rent as it falls due and
all rates and taxes
 Cont’d
• It is also implied that at the determination of
the lease the tenant will deliver up vacant
possession.
 Cont’d
• Common law also implies against the tenant
that he or she shall use the premises in a
tenantable manner.
• This obligation means that the tenant should
take proper care of the premises.
• A tenant must not commit voluntary or
permissive waste.
 Cont’d
• Voluntary waste refers to damage that is
committed deliberately or negligently.
• It also included altering the premises without
the landlord’s consent.
• Permissive waste implies an omission that
results in the dilapidation of the property such
as where property is allowed to decay by
inaction.
 SUBLEASE AND ASSIGNMENT
• A sub-lease is a transaction whereby a lessee
creates a lease that is less than the term that
the lessee has.
• S.105 – Covenant to be implied on transfer of
a lease.
• An assignment of a lease is a transaction
whereby the lessee transfers absolutely the
remainder of a term to another person.
 Cont’d
• The power to sub-lease or assign is incidental
to all types of leases unless such power is
expressly excluded.
• S. 109 RTA