LEASES AND LICENCES.

                            LEASES AND LICENCES.

Definition of a lease

·         Differences between leases and licenses and tenancies

Essential features of a lease

·         Duration

·         Exclusive possession

Creation of a lease

·         By contract

·         By estoppels

·         By registration

·         Un registered lease

Rights and obligations

·         Landlord rights and obligations

·         Tenant rights and obligations

·         Conditions

·         Covenants

Sub-leases and assignments

·         Assignments

·         Sub-leases

·         Registration of transfer

·         Assignment of a reversion

Remedies for breach

·         Landlord’s remedies

·         Tenant’s remedies

Termination of a lease

·         Effluxion of time

·         Notice to quit

·         Re-entry

·         Landlord’s rights to  fixtures

              It is trite law that every person in Uganda has a right to own property either as an individual or in association with others as well provided for under Article 26 (1)[1]. In addition, land in Uganda belongs to the citizens of Uganda[2]. And land in Uganda shall be owned in accordance with the following land tenure systems-inter alia (d) leasehold[3]. Furthermore, all Ugandan citizens owning land under customary tenure may acquire certificates of ownership in a manner prescribed by parliament[4]: and any lease which was granted to a Ugandan citizen out of public land may be converted into freehold in accordance with law which shall be made by parliament[5]. And for purposes of clause (5) of this article, ‘public land’ includes statutory leases to urban authorities.

A Lease is defined as a grant of the exclusive possession of property to last for a term of years or periodic tenancy, usually with the reservation of rent[6]. It is essential that a lease shall specify the period during which the lease is to endure, and the beginning and the end of the term.[7]

According to Samantha[8], a lease is a personal, contractual agreement between an owner of land and a tenant, whereby the owner agrees to transfer the right to exclusive possession in the land to the tenant for a specific and definable period of time- which must be less than the duration of time for which the owner holds the interest –usually in return for payment of a nominated rental.

The Leasehold interest is classified as a ‘non-freehold’ interest because of the fact that, unlike freehold estates, it exists for a defined period of time[9].

The party leasing is known as the lessor or a landlord and the other party is the lessee or tenant. A lease maybe a private residential letting, a [secure] public sector tenancy, an agricultural tenancy or a commercial letting[10]. These may be classified into two i.e. fixed term lease and a periodic lease. A fixed term lease is a lease expressly created to exist for a defined period of time. The actual length of time for which the lease is to continue is not important, hence a fixed term lease may exist for one month or 99 years. However, the duration must be defined, certain and express. Hence, at the time when the parties are entering into the lease contract, the length of time that the lease is to exist for must be clear; the exact date of cessation must be explicitly set out. On the other hand, a periodic lease can be created by either an express agreement or implied from circumstances. A periodic lease is a lease which exists for a succession of periods. It may arise expressly wherever a lessee agrees to pay periodic rental , whether it be weekly, fortnightly or monthly, in return for exclusive possession However, there are other forms of tenancy which don’t either fall under fixed or periodic types of leases, these are; tenant at will and tenant at sufferance.

A tenancy at will exists when A has possession of the land of B as a tenant with B’s consent, on the understanding that either A or B may terminate the tenancy when he likes.

Littleton wrote;

                                    ‘’A tenancy is where lands or tenements are let by one man to another, to have and to hold to him at the will of the lessor, by force of which lease the lessee is in possession. In this case the lessee is called tenant at will, because he hath no certain or sure estate, for the lessor may put him out at what time it pleaseth him’’

But such a tenancy equally arises when possession is held at the will of the lessee, and indeed it is important to notice that, even though a tenancy is made determinable at the will of the lessor only, it is also by implication determinable at the will of the lessee. In other words, every tenancy at will must be at the will of both parties.[11]

In the words of Lord Simonds[12];

                        ‘’ A tenancy at will, though called a tenancy, is unlike any other tenancy except a tenancy at tenancy at sufferance, to which it is next-of-kin. It has been properly described as personal relation between the landlord and his tenant; it is determined by the death of either or by one of a variety of acts, even by an involuntary alienation, which would not affect  the substance of any other tenancy’’.

Therefore, a tenancy at will may be created either expressly[13], or by implication, as, for example, where a tenant with the consent of his landlord, holds over after the expiry of the lease, or where the purchaser goes into possession under a contract for a lease or under a void lease or where a purchaser goes into possession prior to completion, or a prospective tenant goes into possession during negotiations for a lease[14].

According to Coke;

                        ‘’ Tenant at sufferance is he that at first comes in by lawful demise and after his estate ended continueth in possession and wrongfully holdeth over.

For instance, a tenant for a fixed term becomes a tenant at sufferance if he ‘holds over’, that is remains in possession without the consent of the landlord, after the term has come to an end[15] .

                        Historical Development of Leases

 Historically, the lease agreement evolved during the period spinning the 12^th to the 16^th centuries. In the 12^th century, a ‘villeinage’ represented what is known today as the modern lease; where a villeinage existed, the ‘villein’ (tenant) was allotted land by the landlord of the manor (lessor) for an indefinite period of time[16]. The status of the villein could loosely be described as a tenant at will although the ‘tenancy’ was not capable of being legally enforced.

The first form of legal protection for the villeinage did not emerge until the 13^th century, when the common law began to recognize the contractual foundation of the villeinage. This meant that a villein could sue his landlord for damages for a breach of lease, but it did not entitle a dispossessed tenant to regain possession. At this point, the lease was not regarded as a form of real property, although its contractual foundation meant that a lease contract could properly be regarded as a legally enforceable, person right.

Due to the inappropriate nature of contractual remedies for tenants unfairly dispossessed, the common law courts eventually developed an action entitling a ‘villein’ to recover possession of land over which he or she held a ‘villeinage’. This action was known as the ‘quare ejecit infra terminum’[17]. This action was, however limited, of limited use, as it was only available against the landlord or successors in title to the landlord, and not against any third party unconnected to the agreement, it was not possible to claim possession of the land.

Eventually, by the late 15^th century, villeins acquired a more complete right to claim possession of the land which came to be referred to as a writ of ejectment or de erejctione firmae. Under this writ, a tenant who was disseized of land could actually reclaim the land itself.       

                                    Essential features of a Lease

To create a valid and enforceable leasehold- whether under common law or equity-the relationship must possess certain fundamental characteristics. Under Sec.3 (5) (a)[18], the leasehold may be created either by contract or by operation of law. In addition, (b) the terms and conditions of which may be regulated by law to the exclusion of any contractual agreement reached between the parties; The essential features of a lease were inter alia stated in the case of Street v Mountford[19], the facts of this case were; on 7^th March 1983, Roger Street gave rooms 5and 6 to Mrs. Wendy Mountford for a ‘license fee’ of £37 a week, terminable on 14bday’s notice. Mrs. Mountford also signed a form saying she understood the Rent Act, 1977 did not apply to which was deemed fair by and independent office or tribunal. However, the defender argued that she had a lease.  The question for the court was whether the arrangement expressed in the agreement was a lease or a license? The terms of the agreement included that Mr. Street could enter the rooms at any time to inspect, to read the meter, to carryout maintenance and install or replace furniture, or for any reasonable purpose. No children or pets were allowed. The licence could be terminated by a 14days written notice. The agreement also stated that the licence would not and was not intended to give a tenancy and conferred no protection from the Rent Act.

Court held inter alia that agreement was a lease and not a licence. Per Lord Templeman, he stated;

                        ‘’My Lords, there is doubt that the traditional distinction between tenancy and a licence is of land lay in the grant of land for a term at a rent with exclusive possession…’’

He further identified three essential elements of a lease, i.e. the grant of exclusive possession, for a period of time (duration) which is certain and the payment of rent.

Exclusive Possession;

Is the most contentious and complex requirement for a lease. It looks to the legal entitlement rather than what is actually going on in practice. Therefore, for a lessor to confer a leasehold interest upon a lessee, the lessor must confer exclusive possession of the leased premises. If the lessee does not have exclusive possession over the land, the relationship will be more personal in nature and resemble a licence, because all that is conferred is permission to enter the land. In order to determine whether or not the lease holds exclusive possession, courts will consider a range of factors including:

(a)                Whether the transaction has been defined as a lease- this is relevant but not conclusive[20]   

(b)               The nature and form of the possession conferred and whether or not ‘general control’ of the property been transferred to the lessee[21]

(c)                 The intention and expectation of the parties to the agreement[22]

(d)                The nature of the premises and the suitability of exclusive possession[23]

The archetypal authority on the point is the decision of Radaich v Smith, supra. On the facts of that case, a deed was executed between the licensors (the Smiths) and the licensee (Radaich) which purported to give the licensors a license for a term of 5 years over shop premises at Mosman. The license was expressed to be for the ‘sole and exclusive privilege of supplying refreshments to the public upon the premises’, Furthermore, clause 10 of the agreement set out that the ‘license…shall be deemed to be a lease as defined in the Landlord and Tenant (Amendment) Act NSW (1948-52)’. An annual sum due in weekly payments, was also required. The primary issue was whether the express arrangement actually amounted to a lease or merely a license.

From the finding of the Supreme Court, the arrangement amounted to a lease and therefore the court had jurisdiction to determine a fair rental price. It was held that, in form and matter, the deed resembled a lease, although it did not use words ‘lessor’, ‘les see’ and ‘lease’. It was held that this issue alone cannot be determinative, because the real significance lies in the substance of the transaction. The court noted that the true test of a supposed lease is whether exclusive possession is conferred upon the potential lessee.

According to McTiernan J,

’’ This business could only be properly performed if the persons involved retained exclusive possession of the premises. The agreement contemplates that the so called ‘licensee’ is to have control of the premises …ultimately held to indicate an intention to grant exclusive possession, and consequently, a leasehold interest existed.’’

Similarly, in the Ugandan case of City Council of Kampala v Mukibi[24], where the council had entered a tenancy agreement with the defender in terms of which the defender was to be lased premises at an annual rent on a year to year basis, but terminable by either by giving one months’ notice in writing. The premises were let subject to certain covenants which provided inter alia that tenant should use the premises, only for hairdressing business and that he should not assign or sublet or part with the possession of the premises, with the right to the pursuer in the event of breach of the covenants. It was alleged by the pursuer that the defender had sublet the premises and the pursuer sued for vacant possession of the premises and for mesne profits[25]. In the case, the defender retained possession of the key of the premises which he opened in the mornings and locked at night. On passing judgment, it was held inter alia that the tenancy agreement, although not in statutory form and bearing no endorsement with a certificate of registration was enforceable against the defender as an agreement to grant a lease. The persons working on the premises were licensees, not tenants, and were not in exclusive possession of the premises, and was not in breach of the covenants. The pursuer having refused to accept rent tendered to it, should not have its costs, and order for vacant possession refused, judgment for the pursuer for mesne profits. In his judgment, Sir Udo Udoma C.J, stated that;

   ‘’the hair dressers were mere licensees. That they were not in proper sense of the terms. That they were not exclusive possession of the premises and his practice of holding the premises’ key and open in the morning and close the premises after collecting his dues’’.

Whilst the nature of the possession conferred remains the foremost test for the determination of exclusive possession of a lease in some jurisdictions such as Australia, courts will sometimes consider the general circumstances of the agreement. In this reverence, the character of the leased premises may be substantial. For instance, if the lessor doesn’t hold a freehold estate or a leasehold interest in the premises, he or she will not be able to confer exclusive possession. In addition, where the transaction is for advertising purposes, it is often suggested that the agreement should constitute a licence, because the transaction does not really contemplate an ‘exclusive possession.’  Similarly, in Claude Neon Ltd v Melbourne and Metropolitan Board of Works[26], the High Court held that an agreement to confer exclusive advertising space over parts of a roof and exterior wall did constitute a lease because the lease held ‘general control’ over those areas, and this was enough to establish a form of exclusive possession.

  

  Duration;

                   Duration is another essential feature of a lease and duration of time for which the lease is to exist be specific and identifiable. The expressed period of time for which the lease is to operate must be clearly set out, and the events must be bound to happen. This feature does not apply to periodic leases because they are not fixed in time. Duration is therefore of essence and each lease must have certain or ascertainable beginning and ending before it takes effect. Leases may commence from the date when the lease agreement is executed, they may be backdated or specified to take effect in future. The applicability of this rule was espoused in the case of Lace v Chantler[27], in which the pursuer sub-let a house to the defender for the duration of the war during the Second World War. It was held inter alia that the lease was void for uncertainty of duration because at the time the purported lease agreement took effect it was neither certain or ascertainable when the war would end.

Therefore, a lease which is specified to take effect in the future is known as a ‘reversionary lease’ because the conferral of exclusive possession is deferred until a future date. Where no commencement date is set out, courts will generally assume that the lease is to commence upon the date on which it is either executed or orally agreed to[28]. And if the period of the lease is noted by reference to an exact time or event, the lease may be presumed to be periodic in nature.

      Creation of a lease by operation of law and contract;

Under Section 3 (5) (a)[29], a lease can either be created by contract or by operation of the law, and for a contract of a lease to be valid, there must be a final agreement on the terms of the lease agreement, that is to say on the parties, the property, the consideration or rent, the commencement and the period of the lease and any other special terms[30].

Under section 101[31], it is to the effect that,

        “The appropriator of any freehold or Mailo land under the operation of this Act may, subject to any law or agreement for the time being in force, lease that land for any term exceeding 3 years by signing a lease for it in the form in the 8^th schedule of this Act….”

Similarly, section 54 of the same Act supra, provides for registration of any lease granted. A case in point was illustrated in the case of Souza Figueredo and Co. Ltd v Mooreing Hotel Co. Ltd[32], the facts of this case were; the respondent was the sub-lessee of the suit property. By a written agreement, it sub-subleased the property to the appellant for a period in excess of 3 years. The registrar refused to register the transaction because it was his office practice not to register a sub-sublease. In any case the document was not in a register able form. Nonetheless, the appellant entered into possession and remained there for two years. Thereafter, the appellant abandoned the premises without paying rent for the period that it was in possession. The high court ordered the appellant to pay outstanding rent to the respondent. On appeal, the appellant argued that since the sub-sublease was not registered as required by the Registration of Titles Act, there was no lease created under the agreement and therefore it had no obligation to pay rent.

Creation of a lease by estoppel;

                The connection amid a landlord and a tenant may be formed for the reason that there is a deep-rooted 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” as it was discussed in the case of Pardhan Jivraj v Dudley-Whelpadale[33]. Similarly, the same code was exposed in the East African case of Khanjee Naranjee Ltd v Tulsedas Dharamsh Ghadialy[34], where the issue before the trial judge was whether there was evidence which showed that the respondent acknowledged that the appellant company was his landlord before May 1^st 1958. The trial judge held that there was no such evidence, that there was no evidence of either agency or an assignment…. However, on appeal, the substantial issue before the court was whether the respondent was by his conduct estopped form denying that the appellant company had become his landlord since 1955 when it was incorporated and took over management of the suit property from Khanjee Naranjee? However, court held inter alia that, the part payment of the amount claimed as rent by the appellants for a period prior to May 1^st 1958 and the promise to pay the balance due, constituted an acknowledgement of the tenancy for the entire period for which the rent was claimed by the appellants. Therefore, a lease can be created by tenancy by estoppel.

Creation of a lease by registration requirement;

           Under section 109 of the Registration of Titles Act, it is to the effect that a lessee may sub-let subject to any provisions in his or her lease…by signing a sub-lease in the form in the 10^th schedule to the Act. This implies that a lease may be created by a registration in Uganda. For instance, in the case of Popatlal Hirji v L.H. Lakhai & Co (EA) Ltd[35], it was held that a sub-lease for 1 year which was renewable annually at the option of the tenant was a lease in excess of 3 years and therefore subject to the statutory form. Similarly, under section 51 of the same Act provides for a memorial to be entered on duplicate instrument and that certificate shall be received in all courts as conclusive evidence that the instrument has been dully registered.

Unregistered leases;

          At common law, a purported lease that does not comply with formalities merely operates as a contract where by the proposed lesser promises to lease and the proposed lessee to take the land subject to the terms of their agreement as the case was in Walsh v Lonsdale[36], therefore any failure by either party to comply with the agreement could result in an action for damages as it was rewarded in that case. Moreover, where a purported lessee enters into possession under the agreement, he/she becomes a common law tenant at will as t was decided in Souza Figueiredo case supra, and upon payment of rent, a tenant at will becomes a yearly tenancy as it was in the Walsh case.

          On the other hand in equity, failure to trail legal procedures to craft a lease does not certainly render a lease void because equity treats as done as what ought to be done therefore, an agreement for a lease capable of enforcement by specific performance creates a lease. Such a lease is variously referred to as an “equitable/ informal lease”. This principle was laid down in the famous case of Walsh v Lonsdale.

Rights and obligations of a landlord and a tenant.

           The rights and duties of a landlord and tenant are commonly fixed by the expressed covenants that, having been settled by the parties are incorporated in the lease or the contract under which the premises are held[37]. The terms of a lease may be expressed as; conditions and covenants.

According to the Osborn’s Concise Law Dictionary[38], a condition is defined as a provision which makes the existence of a right dependent on the happening of an event; the right is then conditional, as opposed to an absolute. It further states that, a condition in a contract is a stipulation going to the root of the contract, the breach of which gives rise to a right to treat the contract as repudiated[39].

On the other hand, a covenant is defined as a promise made by deed. It may be positive, stipulating the performance of some act or the payment of money, or negative or restrictive, forbidding the commission some act.   A breach of a condition in a lease agreement entitles the other party to void the contract as it was stated in the case of Lugogo Coffee Co. (U) Ltd v Singo Combined coffee growers Ltd[40], the facts of this case were as follows. The plaintiff company brought this suit against the defendant company for possession and general damages for trespass on a piece of land. The plaintiff company claimed to have purchased the land in dispute from Mrs. Byatisi Namiro on or about 8^th June 1972. Before that, Mrs. Namiiro had leased the land to the defendant company for 49 years starting on 1^st January. In April 1972, Mrs. Namiiro re-entered on the land, applied to the Registrar of Titles to make an entry of the re-entry in the Register Book under section 113 of the Registration of Titles Act on the grounds that the defendant company had never paid rent agreed upon and thus it was in breach of the covenant of the lease. The Registrar declined to make the re-entry and instead advised the dispute to be resolved by court action. Namiro did not file any action but instead sold the land to the Plaintiff Company. Counsel for the plaintiff urged that the power of the Registrar of Titles under the Section 113 of the Registration of Titles Act to make entry of the Re-entry by the lessor in the Register Book is not mandatory and hence if he refuses to make such entry because of a mistaken view of the law, the lease nevertheless determine because a lease is a contract and a breach of its covenants entitles the lessor to avoid the contract. Counsel for the defendant contended that although a lease is a contract, it is governed by a statute and can be determined only in accordance with the provisions of Section 113. The defendant company prayed for a relief against forfeiture for non-payment of rent.

The court held inter alia that the defendant was entitled to relief against forfeiture for non-payment of rent.

           Covenants are classified into; Express and implied Covenants.

Express terms are those which are stipulated in writing or orally in the agreement[41]. Thus, parties to a lease are free to incorporate any terms in the lease provided that the terms are not contrary to any rule of law[42]. Ninth Schedule of the Registration of Titles Act, cap 230, Laws of Uganda sets out certain terms that can inserted in a formal lease agreement[43].

Similarly, section 104 0f the same Act stipulates that where shorter form of words is used in the lease agreement, it is implied that the parties intended the detailed meaning ascribed to that to the term in the schedule. In the absence of any express agreement of the parties, the common law implies certain covenants against the landlord. The covenants implied against the landlord include the following as discussed;

(a)  Quiet enjoyment

A covenant that the tenant shall have quiet enjoyment of the premises is implied in every lease that does not expressly deal with the matter. The meaning of this is that the tenant shall be put into possession and that he shall be entitled to recover damages from the landlord if his enjoyment is substantially disturbed by acts either of the landlord or somebody claiming under the landlord[44]. The basis of this covenant is that by letting the premises, the landlord agrees to give the tenant the right of possession and thereby guarantees not to interfere with the tenants’ exercise of the right and use of the premises[45]. It’s thus a covenant for freedom from disturbance by adverse claimants to the property.  For instance, the covenant of quiet enjoyment was watermarked in the case of Markham v Paget[46], in which parties had entered an agreement with a draft lease attached to lease a coal seam. If the company anticipated damage, the lease allowed the company to leave sections unmined as support. The final lease allowed the minors to let down the surface, but never asked the miners consent before leaving any coal unmined. The surface was then also let to the plaintiff on a yearly tenancy. The miners sought consent as agreed, but the consent was withheld and they proceeded. The surface property was damaged and the tenant sought damages.

It was thus held that there was an implied covenant for quiet enjoyment in the lease of the house, but the owner of the house who was liable under that covenant could not seek an indemnity from the miner without joining in the trustees who had actually executed the lease.

In addition, it was vividly decided in the case of Kenny v Preen[47] that a landlord’s threats to evict the tenant accompanied by repeated shouting and knocking her door, was held to be breach of covenant for quiet enjoyment. The court explained that the word ‘enjoy’ used in connection is a translation of the Latin word ‘Fruor’, and refers to the exercise and use of the right and having full benefit of it, rather than to deriving pleasure from it.

(b)  Non-Derogation from grant;

This is closely related to the covenant of quiet enjoyment, and is the landlord’s implied covenant that he shall not derogate from his grant. He must not frustrate the use of the land for the purpose for which it was let[48]. In the words Bowen LJ, he stressed that

                        ‘’a grantor having given a thing with one hand is not to take away the means of enjoying it with the other’’[49]

Similarly, Wood V-C said’

                                    ‘’ If a landowner conveys one of two closes to another, he cannot afterwards do anything to derogate from his grant: and if the conveyance is made for the express purpose of having buildings erected upon the land so granted, a contract is implied on the part of the grantor to do anything to prevent the land from being used for the purpose for which the knowledge of the grantor the conveyance is made’’[50]. The subject matter in the discussion is vividly illustrated in the case of Aldin v Latimer Clark, Muirhead & Co[51], in which land was leased to a tenant for the purpose of carrying on the business of a timber merchant, and the landlord proceeded to erect buildings on adjoining land in such a way as to interrupt the free flow of air to the tenant’s drying sheds, Court held that damages were recoverable against the landlord’s assigns for breach of the implied covenant.

(c)  Fitness for Habitation 

In general, there is no implied undertaking by the landlord that the premises are or will be fit for habitation; and no covenant is implied that he will do any repairs, that is to say; Caveat Lessee[52]: The Common law doctrine that stated that it was the tenant’s responsibility to research leased premises before agreeing to a lease and that the landlord was not responsible for the defective condition of the leased premises : this doctrine has been changed in many ways by modern rules OR is the equivalent of caveat Emptor, a Latin term meaning ‘’buyer be aware’’, which is applied in the context of a person leasing rather than buying something. It typically applies in the setting of a commercial lease of real property, where the lessee (renter) isn’t protected by the same warranty of habitability that applies to the residential tenant. However, there are certain exceptions to this rule, that is;[53]

(1)   Furnished Houses; upon the letting of a furnished house, there is at common law an implied warranty, in the nature of a condition, that the premises shall be reasonably fit for habitation at the fixed date of commencement of the tenancy.[54] In the  case of Collins v Hopkins[55], McCardie J said,

‘’ What is the meaning of ‘fit for habitation’? The meaning of the phrase must vary with the circumstances to which it is applied. In the case of unclean furniture or defective drains or nuisance by vermin the matter is not, as a rule one of difficulty. The eye of the nostrils can detect the fault and measure its extent. But in the case of a house lately occupied by a person suffering from an infectious disease, the eye and other senses are of no avail. , …’’

Thus, if the house is infested with bugs as the case was in Smith v Marrable[56], if its drainage is defective[57], or it has been ,lately occupied by a person suffering from tuberculosis, the tenant is entitled to repudiate the tenancy and recover damages[58]. But provided that the house is fit for habitation at the beginning of the tenancy, the fact that it later becomes uninhabitable imposes no liability upon the landlord[59]

(2)   Premises in multiple occupation :

A landlord who retains control of the means of access to demised premises in a high block of flats such as lifts and staircases and other common facilities such as rubbish chutes or lighting, is under an implied duty to keep them in repair[60]. The duty , implied into the lease at common law, is not absolute, but only  a duty to take reasonable care to maintain them in a state of reasonable repair and usability[61]. Among others.

Obligations of a tenant:

Under Section 102 (a) and (b)[62] the lessee is obliged to pay rent reserved by the lease at the times mentioned in the lease and is obliged to keep and yield up the leased property in a good and tenantable repair respectively. And section 103 (a) of the same Act, supra, empowers the lessor to enter the leased premises at all reasonable times for specific purposes, such as inspection of the premises, and repair the property.

Tenants’ liability to waste:

Tenants are also subject to the doctrine of waste, though in varying degrees[63]

Waste generally means such damage to houses or land as tends to be permanent and lasting loss of the person entitled to the inheritance. Waste is categorically groped into two, that is to say: permissive waste and voluntary waste.

Permissive waste arises from a mere act of omission, not of a commission, and it is generally, the result of allowing the buildings on an estate to fall into state of decay[64].

On the other hand, voluntary waste is a wrong of commission consisting of a positive act of injury to the inheritance. This can include pulling down or altering houses, opening pits or mines, changing the course of the husbandry and cutting timber, among others.

Distinguishing between leases and licenses

The major difference is in the issue of exclusive possession. In licenses, the licensee does not have exclusive possession because of the fact that the licensor chooses not to avail him of such.[65] At common law, this is hard to demonstrate as courts usually look at intention of the parties[66], however in Uganda this was made clear in th section 3(5) (c) of the Land Act[67] wherein Parliament intended that where a person grants another person namely, a tenant  or  lessee exclusive possession of the suit property thus a manifestation of the intention of including exclusive possession a major feature of leases.

Sublease and assignment

A sublease is where a person with a leasehold interest transfers his interest to another person and creates a lease that is less than the time that he has. In this case the lease is known as the head lease and the latter is a sublease and thus also gains exclusive possession of the estate.[68]

According to Black’s Law Dictionary, an assignment  is the transfer or settling over of property or of some right or interest therein from one person to another where in it has the same effect as a transfer of a legal estate in land. This means that it encompasses the transfer of rights held by one party known as the assignor to the other party the assignee. It also transfers a benefit; wherein according to the rules of Equity is an equitable interest. It is trite law that these rights maybe vested or contingent whereby they are dependant on terms of the lease whereby details of the terms of the lease determine some additional rights and obligations.

In contrast, the distinction of a sublease and assignment was made by Lord Greene MR in Milmo v Carreras[69] wherein he stated that in a sublease, the lessee transfers all his rights in the property or estate over to the sub-lessee and thus becomes a stranger to the landlord adhering to the principle of privity of estate and that subletting must be shorter than the

original lease.

At common law, the power to sub-lease or assign is capable of being performed in all types of leases and this was illustrated in the case of City Council of Kampala v Mukiibi[70]. However the land lord’s prior consent is a prerequisite to the effect. This exclusion may be absolute or qualified by a requirement of the agreement[71]. The facts of this case are that the plaintiff council had entered into a tenancy agreement with the defendant in terms of which the defendant was to be leased premises at an annual rental on a year to year basis, but terminable by either party giving one month’s notice in writing. The premises were let subject to certain covenants which provided inter alia that the tenant should use the premises only for the business of hairdressing, and that he should not assign or sublet or part with possession of the premises, with a right of re-entry to the plaintiff in the event of breach of any of the covenants. It was alleged by the plaintiff that the defendant had sublet the premises and the plaintiff sued for vacant possession of the premises and for mesne profits.

It was held inter alia that a lease was practically prohibitive in form. There is no provision that the consent of the lessor may be given, if sought by the lessee. However, such consent not to be unreasonably withheld to either sublet or assign the premises to a third party. Therefore it must be very strictly construed as against the plaintiff, and the background that to the knowledge of the plaintiff the defendant was not a hairdresser or barber by trade at the time when the premises were demised to him.

Enforcement of a covenant

It is trite law that where one seeks to enforce such covenants in courts of law, the court has to first establish whether there is an existence of privity of contract or privity of estate between the parties, whereby the terms of the agreement that they consented to are what court will uphold[72]. Whereby  privity of estate is a mutual or successive relationship to the same right in property, as between grantor and grantee or landlord and tenant. This is to the effect where the party not at fault has no remedy in contract they can institute a relief under privity of estate.

Therefore in an assignment, where a person transfers their leasehold, there is no privity of contract as the parties have no contractual relationship. However, since in  transaction  is of an estate, there exists privity of estate and this being the case; the parties can enforce their rights by way of covenants.

Registration of transfer

In the Ugandan context, upon registration of a transfer of a lease, a covenant is implied between the transferor and transferee that the latter shall pay rent reserved in the original lease and be bound by all covenants expressed there in or implied by law against the lease. S.113 of the Registration of Titles Act[73] is to the effect that all the implied covenants specified binding on all leases, shall be implied in every sub-lease including the executors and administrators inter alia for the terms granted by the sublease.

Assignment of a reversion

At common law, apart from covenants that are inherent in the landlord-tenant relationship, neither the benefit nor the burden of the covenant runs with the reversion.[74] This creates a challenge to the effect that the land lord has no way in instituting a case against the assignee. However the solution to this problem is that the landlord can enter into a fresh contract with the sub-leasee on the assignment of the reversion so that the privity of the contract is established, or is for the headlease to assign his rights (including the right to sue) and obligations to the landlord with the express or implied consent of the sub-lease.

Remedies under leases

a)      Tenant remedies

In cases where either party is in breach of the terms that were agreed upon at the conclusion of the lease agreement, the general rule is that the party not at fault can sue the party at fault in the law of contract or tort. A case in point is  Opinya v Mukasa, where the tenant successfully sued the landlord for breach of the covenant of quiet enjoyment and prayed for damages and an injunction to prevent future breach. Furthermore, the tenant may also terminate the lease where the agreement expressly provides such power wherein he may exercise it on discovery of the breach. However this is subject to circumstances where;

Remedies for breach of covenant to provide quiet enjoyment

 A landlord may be in breach of the covenant of enjoyment of quiet possession. This was defined in Southwark LBC v Mills[75] by Lord Millet as a situation where the landlord or someone claiming under him does anything that substantially interferes with the tenant’s title to or possession of the demised premises[76]. Lord Denning MR further espoused it as “any acts calculated to interfere with the peace or comfort of the tenant or his family”[77].

In this case therefore, a tenant may seek an injunction restraining the landlord from any further actions in breach of the covenant. This remedy was seen in the case of Harmer v Jumbil (Nigeria) Tin Areas Ltd[78] where the landlord had granted the tenant a lease of misused mine for use as an explosives’ magazine. He subsequently granted a lease of adjoining land to other tenants, which permitted the working of minerals and opening of the mine shafts. The presence of mine working in such close proximity to the magazine would have the effect of invalidating his tenants operating license. He was held to have breached his covenant not to derogate from the grant and an injunction was issued.

b)      Landlord’s remedies

At law when the tenant is in breach of a covenant, the law provides remedies to the landlord for which he can exercise when the circumstances arise. The law avails five potential remedies;

Forfeiture of the lease

This may also be referred to as re-entry and accordingly, it is the termination of a lease by the leasor before the term expires. This may happen in three circumstances;

In Clarke v Dupre Ltd[79] it was established that where a landlord enjoys an implied right to forfeit if the tenant disclaims his title. Which is also established  in Section 105 of the Registration of Titles Act[80] which binds the lessee to the implied rights enjoyed by the landlord. However, it is trite law that this remedy may be waive by the failure of re-entry where the landlord has notice of the breach. Therefore in summary, if knowing of the breach, he does distrain, or does receive the rent, then by law he waives the breach and non of his protests will avail him anything[81].

The second circumstance is where a landlord will enjoy a right to forfeit if an obligation of the lease is formulated as a condition.

The third finally, is where the lease entitled the landlord an express clause for forfeiture where a lease is registered under S.103(b) of the Registration of Titles Act,[82] which is to the effect that the lessor has power of re-entry, after breach of any covenant expressed in the lease for continued 30 days. However at common law when the right to re-entry occurs, the landlord has a right of re-entry effected  by physically entering the premises with the intention of determining the tenancy, however reasonable force may be used to eject the tenant

Distress

According to Nicola Jackson[83], distress is an ancient common law remedy available to the landlord where his tenant is arrears of rent. In essence the landlord in so doing , seizes and sells goods found on the leased premises to recover the outstanding arrears. It is important to note that a landlord does not require a court order to distress. 

This remedy is only available to the landlord where the tenant has failed to pay rent and not for breach of other covenants. In the case of Walsh v Lonsdale[84],it was argued that where rent is not due, the distress will be unlawful. However, the landlord cannot break down an outer door or enter via a closed window but, may enter by means of an unlocked door and there in is entitled to seize any goods physically present on the land.[85]

Damages for breach of covenant

The general rule is that the landlord will be entitled to recover damages whenever the tenant is in breach of his covenant. The only exception is where the breach is that of a covenant  to pay rent[86].  In National and Grindley’s Bank (K) Ltd v P.T Punater[87], the tenant breached to deliver up the premises in good order and condition. On termination of the lease, it was held that the landlord was entitled to damages equal to the monetary amount which the premises had been depreciated by the breach.

Mesne Profit

In Kamanyire v Standard Bank Ltd[88] it was established that where the lease is determined and the tenant remains in possession contrary to the landlord’s wishes, the landlord may claim damages for loss of Mesne profits. It is important to note that this is peculiar to the law of trespass and it lies to recover damages suffered by the landlord for being kept out of possession. Mesne profit at law starts at the date when the tenant was expected to deliver vacant possession to when it was actually given when the premises became inhabitable again.

Specific performance of repairing obligations

According to John Stevens[89] it was generally accepted that repairing covenants could not be specifically enforced, irrespective of whether the obligation to repair fell on the landlord or the tenant. In Rainbow Estates Ltd v Tokenhold Ltd[90], Lawrence Collins QC held that there was no reason in principle why  a landlord should not be able to obtain an order for specific performance against the tenant who was in breach of his repairing covenants. He stressed that it was important to ensure that tenants were not subject to Injustice or oppression especially that unscrupulous landlords are prevented from purchasing the reversion of a lease with the intention of misusing a scheduled dilapidations to pressure the tenant.

Termination of leases other than forfeiture

Defluxion of time

This is to the effect that a lease with a fixed term automatically terminates when the period expires. The defluxion of time suggests that there is no requirement for either party to serve notice of termination unless their lease agreement expressly states so. However where the tenant after expiration remains in the possession of the premises with the consent of the land owner, a tenancy at will is implied unless another interest on land is created. A tenancy at will and at sufferance become periodic tenancies once the tenant pays rent and it is accepted, depending on the nature or mode of payment that may be weekly, monthly or yearly.

  Notice to quit.

 According to Clifton Securities V Huntley[91], a lease for a fixed period cannot be terminated by notice by either party unless the right to terminate is expressly reserved in the lease or in the event of breach of a term, which entitles either party to terminate the lease. On the other hand, periodic tenancies are by nature terminable by either party giving an appropriate notice[92]. The notice terminating a lease should be reasonably clear to the person to whom it is given that the lease is terminated. If the notice is ambiguous, it is not effective as was shown in the case of  Rajan Nanji V Jadowji Dewji, where the notice to a tenant read that if the tenant did not vacate the premises by a certain date his rent might be increased. It was held that the notice was not effective to terminate the lease.

Surrender.

A  surrender  is a voluntary act of the parties whereby, with the landlord’s consent, the tenant surrenders his lease to the landlord so that the lease merges with the reversion and thus is brought to an end[93]. This is however to be distinguished from a merger whereby the tenant acquires the landlords reversion with the result that the two interests merge, having one owner. According to Bweya Steel Works ltd V National Insurance Corporation once the lessor accepts possession the lease merges with the reversion and is thereby terminated. Surrender may be by express agreement of the parties, operation of law or statutory provision. A lease is surrendered by operation of law if the lessor grants, and the lessee accepts, a fresh lease commencing before the current lease expires[94]. It is also surrendered by operation of law where the tenant abandons the premises and the landlord re-enters.

The form which a surrender  takes  on is paramount. This is to the effect that every express   surrender is void unless made by deed or in writing with the consent of the registered proprietor[95].

Determination by surrender can occur by way of operation of the law. This is provided for under S.108(1) of the Registration of Titles Act[96]. This is demonstrated by the delivery of possession by the tenant to the landlord who then accepts  and then effects the surrender by way of operation of law. There is a delivery of possession where the tenant returns the keys of the premises and the landlord accepts them with the intention of change of possession[97]. Thus the change of possession is essential.

Merger.

According to Osborn’s Concise Dictionary That operation of law which extinguishes a right by reason of its coinciding with another and greater right in the same person for example a life estate is merged in or swallowed by the reversion when the two interests come into the hands of the same person., the term is merged in the reversion. The merger is completed by appropriate re-entry in the register book[98]  by the landlord. Hence the term and the reversion are concurrent estates and cannot exist together implying that a person cannot be reversioner to himself.

Legal and equitable leases can be terminated because of the following reasons; In case of breach of any of the covenants such as breach of quiet possession,  no derogation from grant, fitness for human habitation and also breach of payment of rent.

Bibliography

Legislation;

The Constitution of  the Republic of Uganda, 1995.

The Land Act Cap 227(As Amended 2009)

The Registration of Titles Act Cap 230

Case law.

Textbooks;

Nicola Jackson, John Steven & Robert Pearce, 4^th Edition(2008), Law Land, London: Sweet

& Maxwell.

John Stevens, Robert P, 5^th Edition(2013), Law Land, London; Sweet & Maxwell.

John T. Mugambwa, (2002), Principles of Land  Law, Kampala; Fountain Publishers.

Lord Hailsham of St. Marylebone, (1981), Halsbury’s Laws of England, London; Butterworth & Co Publishers Ltd.

Samantha, J, Hepburn, 2^nd Edition (2001), Principles of Property Law, London, Cavendish Publishing.

E.H.Burn, J.Cartwrit, 8^th Edition, (2011), Modern Law of Real Property, New York, Oxford University Press

  

  

  

LEASES

Definition of a lease

·         Differences between leases and licenses and tenancies

Essential features of a lease

·         Duration

·         Exclusive possession

Creation of a lease

·         By contract

·         By estoppels

·         By registration

·         Un registered lease

Rights and obligations

·         Landlord rights and obligations

·         Tenant rights and obligations

·         Conditions

·         Covenants

Sub-leases and assignments

·         Assignments

·         Sub-leases

·         Registration of transfer

·         Assignment of a reversion

Remedies for breach

·         Landlord’s remedies

·         Tenant’s remedies

Termination of a lease

·         Effluxion of time

·         Notice to quit

·         Re-entry

·         Landlord’s rights to  fixtures

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[1] Constitution of the Republic of Uganda, (as amended), 1995

[2] Article 237 (1), of the constitution of the Republic of Uganda, (as amended), 1995

[3] Article 237 (3)(d)

[4] Article 237 (3) (a)

[5] Article 237 (5)

[6] Osborn’s Concise Law Dictionary, 12^th Edition, page 252

[7] Ibid

[8] Samantha, J, Hepburn (2001).

[9] E.H Burn, J. Cartwright. (2011).

[10] Ibid

[11] Fernie v Scott (1871) LR 7 CP 202

[12] Wheeler v Mercer [1957] AC 416, 427

[13] Manfield & Sons Ltd v Botchin [1970] 2 QB 612

[14] E.H.Burn, J.Cartwrit, 8^th Edition, (2011)

[15] ibid

[16] Samantha, J, Hepburn, (2001)

[17] It means a writ of a lease who was permanently ejected when the Ejector was actually in possession but one claiming under the ejector was

[18] Registration of Titles Act, Cap 230, Laws of Uganda.

[19] [1985] 2 All ER 289

[20]Wik peoples v State of Queensland and others / Thayore People v State of Queensland and others [1996] 141 ALR 129

[21] Radaich v Smith (1959) 101 CLR 209

[22] ICI Alkali (Aust) Pity ltd (in Voluntary Liquidation) v FC of T [1977] VR 393

[23] King v David Allen and Sons [1916] 2 AC 54

[24] [1967] E.A 368

[25] Mesne profits are profits of land taken by a tenant in wrongful possession from the time the that the 

Wrongful possession commenced to the time of trial of an action of ejectment brought against him.

[26] (1969) 43 ALJR 69

[27] [1944] 1 All ER 305

[28]Sandill v Franklin (1975) LR 10 CP 377

[29] Land Act CAP 227 (as amended), Laws of Uganda.

[30] The Law of Real Property

[31] Registration of Titles Act CAP 230

[32] [1960] EA 96

[33] (1920-29) 3 ULR 193

[34] [1965] EA 77

[35] [1960] EA 437

[36] (1882) 21 Ch.D 9

[37] E.H.Burn, J.Cartwrit (2011)

[38] 12^th Edition  on page 103

[39] Page 104

[40] [1976] HCB 92

[41] Principles of Land Law in Uganda , Mugambwa

[42] ibid

[43] Principles of Land law in Uganda

[44] E.H.Burn, J.Cartwrit (2011)

[45] John T. Mugambwa, (2002),

[46] [1908] 98 LT 605

[47] [1963] 1 QB 499

[48] Modern Law of Real Property

[49] Birmingham, Dudley and District Banking Co v Ross (1888) 38 Ch. D 259, at 313

[50] North Eastern Railway Co. v Elliot (1860) 1 John & H 145, at 153

[51] [1894] 2 Ch. 437

[52] Southwark LBC v Tanner [2001] AC 1, at 12 ( Lord Hoffman)

[53] Modern Law of Real Property

[54] ibid

[55] [1923] 2 KB 617, 620-1

[56] (1843) 11 M&W 5

[57] Wilson v Finch Hatton (1877) 2 Ex D 336

[58] E.H.Burn, J.Cartwrit (2011)

[59] Sarson v Roberts [1895]2 QB 395

[60] Modern Law of Real Property

[61] Liverpool City Council v Irwin [1977] A C 239

[62] Registration of Titles Act, Cap 230, Laws of Uganda

[63] Modern Law of Real Property

[64] Ibid/

[65] Nicola Jackson(2008)

[66]Errington v Errington

[67] Cap 227 As Amended

[68] John Tamukedde Mugambwa

[69] [1947] KB

[70] [1967] EA 368

[71] S.109 Land Act Cap 227 (As Amended 2009)

[72] Megary and Wade, The Law of Real Property pg.740

[73] Cap 230

[74] Megarry and Wade, The Law of Real Property pg.152

[75] 1998

[76] [1999] All ER 448

[77] Mc Call v Abeles [1976] QB 585

[78] [1921] 1 Ch 200

[79] [1992] Ch 297

[80] Cap 230

[81] Diwan Singh Kalsi V The Commissioner of Lands

[82] Cap 230 as amended

[83] Nicola Jackson(2008)

[84] (1882) Ch.D.9

[85] Nicola Jackson, (2008)

[86] ibid

[87] [1965] EA 648

[88] HCB (1972) 82

[89] Nicola Jackson,(2008)

[90] [1998] 2 All ER

[91] [1948] 2 ALL ER 283

[92] John T. Mugambwa, Principles of Land Law, Pg 111

[93] Halsbusry’s Laws, (1981).

[94] Kalani V Kaur CA No.22 of 1995

[95]  The Registrations of Titles Act Cap 230 s 108(4)

[96] Cap 230

[97] Halsburys Laws, (1981).

[98] John T. Mugambwa Principles of Land Law Pg 113