(S
105-117 OF TRANSFER OF PROPERTY ACT
Definition(
S.105)
A
lease of immovable property is a transfer of a right to enjoy such
property for a certain time,or in perpetuity,in consideration of
price paid or promised or money,a share of crop, service or any other
thing of value to be rendered periodically or on specified occasions,
to the transferor by transferee,who accepts the transfer on such
terms.
In
the case of a lease, the price is called the premium,and the
money,share,service or other thing to be rendered is called the
rent;the transferor is called the lessor,and the transferee is called
the lessee.
The
following are essential elements of a lease:-
1)
The lessor-He must be competent to contract and he must have title or
authority.
2)
The lessee- He also must also be competent to contract at the date of
execution of the lease. A sale or a mortgage to a minor is valid. But
a lease to a minor is void, as the lease is to be executed both by
the lessor and the lessee. (S 107)
3)
The subject matter of the lease must be immovable property.
4)There
must be transfer of a right to enjoy such property.
5)
Duration of lease- A lease must be made for a certain time, express
or implied, or in perpetuity.
6)
Consideration- Like every agreement,a lease must have consideration,
which may be premium plus rent,as well as premium alone or rent
alone.
7)
The lessee must accept the transfer.
Difference
between agreement to lease and lease:-
An
agreement to lease does not give rise to right in rem. It creates
only a personal obligation, which may be enforced by a suit for
specific performance under specific relief Act, provided that
agreement to lease is in writing and is accompanied by delivery of
possession. In this respect,it materially differs from an agreement
to sell. The latter agreement may be specifically enforced even if
oral and unaccompanied by delivery of possession;but not in respect
of agreement to lease. A lease does but an agreement for lease does
not establish the legal relationship of landlord and tenant between
the parties. This is so, because a lease is a transfer of a right to
enjoy property, whereas an agreement to lease is not.
Difference
between lease and licence:-
Ordinarily
a lease is a grant of property, for a time by one who has a greater
interest in the property, the
consideration being usually the payment of rent. A licence ,on the
other hand is governed by Indian easement Act, and is a permission to
do some act which without such permission,would be unlawful. Both
have certain elements in common,but the following are the
points of difference between the two:
1) In a lease there is a
transfer of an interest in the immovable property. In the case of a
license, there is no transfer of interest, although the licensee
acquires a right to occupy the property.
For determining whether an
interest in land is transferred or not,the main test is the delivery
of exclusive possession. If the exclusive possession is not with the
grantee,and the subject matter is in control and possession of
grantor, then it is a license and not a lease. It is always open to a
licensor to have access to property, possession being with him,and
not transferred to the licensee.
2)If during the continuance of
the lease,any accretion is made to the property,such accretion is
deemed to be comprised in the lease.A licensee has no property in the
land,and therefore he acquires no right by accretion.
3) A lease is transferable and
heritable. A licence being purely a personal privilege is
non-transferable and non- heritable.
An exception is made in the
case of a licence to attend a place of public entertainment,which can
be transferred by licensee,unless a different intention is expressed
or necessarily implied(S 56 of Indian easement Act).
4) A lease can be terminated
by forfeiture. There is no corresponding provision in the case of
licence in the Indian easement Act.
5) A lease can be terminated
only in eight different ways as mentioned S 111 of transfer of
property Act. A licence can be revoked at pleasure,unless(a) it is
coupled with transfer of property and such transfer is in force;or
(b) licensee acting upon the licence has executed a work of permanent
character and incurred expenses in the execution. Therefore, unlike a
lessee, a licensee is not entitled to a notice to quit before
eviction.
6) Lessee's interest is not
liable to be defeated by subsequent transfer of leased property as
per S 109 of Transfer of property Act. A licence is determined when
the grantor makes an assignment of subject matter of licence as per S
59 of Indian easement Act.
7) A lessee is entitled to
maintain a suit in his own name against trespassers and strangers. A
licence does not create an interest in property in favour of licensee
and therefore,he is not entitled to maintain suits in his own name.
8) Death of either party does
not affect a lease,whereas a licence is terminated in such
circumstances.
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Leases
how made (S 107)
1) A lease of immovable
property can be made from year to year,or for any term exceeding one
year,or reserving yearly rent only by a registered instrument.
2) In any other case,either by
a registered instrument,or by oral agreement accompanied by delivery
of possession.
Duration
and termination of lease S 106:-
1) 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.
2) 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.
S 106 also clarified that the
period of notice mentioned above commences from date of receipt of
notice. It is also provided that even if a short period is mentioned
in the notice,as long as the suit or proceeding is filed after expiry
of period stipulated above,the notice would not be invalid.
The above statutory
presumption as to duration arise only when there is no agreement
between the parties or a local law or usage to the contrary.
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Requisites
of notice under S 106 of transfer of property Act.
1)Every notice under S 106
must be in writing, signed by or on behalf of person giving it,
2) Sent by post or delivered
personally to lessee,or
3) affixed to conspicuous part
of property.
Waiver of notice to quit as
per S 113 of Transfer of property Act
Notice to quit is deemed to
have been waived
1) when with the express or
implied consent of the person to whom it is given,
2) the person giving it does
an act showing an intention to treat the lease as subsisting.
Rights
and liabilities of lessor [S 108(a) to (c)]
1) the lessor is bound to
disclose to the lessee, any material defect in the property with
reference to its intended use which the former is and latter is not
aware, and which the latter could not with ordinary care discover.{S
108(a)}.
A defect in the lesser's
title can not be said to be material defect in the property within
the meaning of this clause.
2) the lessor is bound on the
lessee's request, to put him in possession of the property.{S 108(b)}
3) The lessor is also deemed
to contract with the lessee that if the latter pays the rent reserved
by the lease and performs the contract binding on the lessee,he may
hold the property(during the time limited by the lease) without
interruption: S 108(c).
This covenant is called a
covenant for quiet enjoyment, and is absolute and unconditional. It
protects the lessee against the disturbance of his possession by
lessor or by person claiming under the lessor, but not against any
disturbance by a trespasser.
Rights
of lessee
1) If during the continuance
of the lease, any accession is made to property, such accession is
deemed to be comprised in lease.
2) If by fire, tempest or
flood, or violence of an army or of mob or other irresistible force,
any material part of the property is wholly destroyed or rendered
substantially and permanently unfit for the purpose for which it was
let,at the option of the lessee,the lease becomes void.(However,if
injury is occasioned by the wrongful act or default of lessee,he is
not entitled to avail himself of this benefit).
3) If the lessor neglects to
make within a reasonable time after notice,any repairs which he is
bound to make to the property, the lessee may make the same himself,
and deduct the expense of such repairs with interest from rent or
otherwise recover it from the lessor.
4) If the lessor neglects to
make any payment which he is bound to make,and which,if not made by
him,is recoverable from the lessee or against the property,the lessee
may make such payment himself and deduct it with interest from rent
or otherwise recover it from the lessor.
5) the lessee may even after
the termination of the lease, remove at any time whilst he is in
possession of the property leased, all things which he has attached
to the earth, provided he leaves the property in the state in which
he received it.
6) When a lease of an
uncertain duration determines by any means except due to fault of
lessee,he or his legal representative is entitled to all the crops
planted or sown by the lessee and growing upon the property when the
lease determines, and to free ingress and egress to gather and carry
them.
7) The lessee may transfer
absolutely or by way of mortgage or sub-lease,the whole or any part
of his interest in the property and any transferee of such interest
or part may again transfer it. In such a case the lessee does not by
reason only of such transfer cease to be subject to any of the
liabilities attaching to the lease.
Liabilities
of lessee
1) the lessee must disclose
to lessor any fact which materially increases the value of such
interest.
2) lessee must pay the premium
and rent to lessor at proper time and place.
3) The lessee must keep the
property in good condition. (reasonable wear and tear excepted).
4) If lessee becomes aware of
any encroachment on the property or any proceeding to recover the
property, he must inform the lessor about the same with reasonable
diligence.
5) The lessee must use the
property as a man of ordinary prudence would use his own, but he
cannot use it for any other purpose or commit any act which may
destroy or permanently injure the property.
6) Without the lessor's
consent, the lessee can not erect any permanent structure on the
property.
7) When the lease is over, the
lessee must put the lessor in possession of the property.
Determination
of lease
A lease terminates in eight
ways:
1) by efflux of time.
2) If the duration of the
lease is until the happening of some event-when that event happens.
Thus for instance,if a lease
is for twenty years and at the same time made conditional upon life
of lessee, the lease terminates on the death lessee, even if death of
lessee takes place within stipulated period of twenty years; if the
lessee does not die within this period lease terminates at the end of
the period.
3)If the lessor's interest in
the property is to terminate on the happening of some event- when
that event happens.
This clause operates in cases
where the lessor has only limited interest or limited power to grant
a lease. Thus it has been held that a lease by hindu widow who is
entitled only to a life-estate terminates on her death.
4) Merger that is when the
interest of the lessee and the lessor in the whole of the property
becomes vested at the same time in one person in same right.
Merger may take place either
by act of parties or by operation of law.
5) By express surrender by
lessee.
6) By implied surrender by
lessee.
Thus if a lessee accepts from
his lessor a new lease of leased property to take effect during the
continuance of existing lease, this is an implied surrender of former
lease, and such lease terminates thereupon.
7) By forfeiture
8) on the expiry of a notice
to terminate the lease,or to quit (or of intention to quit) the
property leased duly given by one party to the other.
A
valid notice must satisfy the following three requisites Viz-
A) It must expressly convey
the intention to terminate the tenancy.
B) It must specify the date on
which the tenancy is to expire.
C) It must be unconditional.
Thus a notice given by a tenant that he will quit when he gets
another suitable accommodation is not valid.
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