LEASES

Section 3 (5)of the land Act provides for the mode of creation of a lease. It may be created by
contract i.e. parties mutually agree to creation of a lease and agree to terms of the lease. Lease
may be created also by operation of the law. This is where the law provides for the holding of
such form of tenure by a prescribed class of [Link] example section. 40(3) of the land Act
provides that Non citizens can only be granted leases for 99 [Link] Act further provides that
the terms and conditions of the lease may be regulated by the law to the exclusion of any
contractual agreement reached between the [Link] RTA presumes a number of conditions
and covenants between the Lessee and Lessor, though not specifically agreed upon between the
[Link] example it is presumed that the Lessee will pay rent reserved by the lease to the times
mentioned in the lease and it is implied that the Lessor may, with or without surveyors or
workers once in every year at a reasonable time of the day enter upon the leased property and
view the state of repair of the [Link] Sec. 101 of RTA to Sec. 105 Provides a number of
implied covenants between Lessor and Lessee. A lease Binds parties to it as well as successors in
title of the parties.A leasehold tenure is defined as a form of tenure whereby one person called a
Lessor grants to another (Lessee) a right to exclusive possession of land for usually but not
necessarily a period defined directly or indirectly by reference to a specific date of
commencement and a specific date of [Link] lease is granted, usually but not necessarily in
capital sum known as premium or for both rent and a premium. And it may be in return for
services or may be free for any required services.

CLASSIFICATION OF LEASES

Leases may be classified into fixed term and periodic leases.A fixed term lease is one whose
duration is fixed by the parties at commencement of the lease i.e. It may be a lease for 12 years,
49 years, 100 years etc. such that upon the expiry of the agreed period, the lease comes to an
end.A periodic lease is one which continuously renews from one term to another e.g. it may run
on a weekly basis, monthly basis or a yearly basis depending on the Agreement between the
parties.A periodical lease terminates by proper notice being served by either party as was stated
in the case of Prudential Assurance company Ltd V London Residuary (1992) 3 All ER [Link]
further classification of Leases which may not fall under the above mentioned bracket is: A
tenancy At will and a tenancy at Sufferance.A tenancy at Will was defined in the case of Bweya
Steel Works Ltd V National Insurance Corporation (1985) HCB 58 to mean a person who enters
into possession of the Landlord’s premises as a tenant without specification of the terms of the
tenancy e.g. where x, the owner of Nabukeera Plaza allows Y to occupy his premises without the
specification of the terms upon which Y is holding the premises. Y becomes a tenant at will and
this means that he is in occupation of the premises at the mercy of x who can terminate the
tenancy without giving Notice to [Link] should a tenant at will begin payment of rent on a
regular basis e.g. if he pays rent on a monthly or yearly basis the tenancy becomes a periodic
tenancy.A tenancy at sufferance was defined in the case of Hassan V Mukiibi (1978) HCB 162
where it was stated that a tenancy at sufferance is implied where a former tenant remains in
possession of the rented premises after the expiry of the period fixed by the [Link] like a
tenancy at will, a tenancy at sufferance can be terminated at any time without
[Link] OF A LEASEThe common law position somehow differs in so far as the
essential features of a lease are concerned as opposed to the statutory position. The common law
position require 2 essential features i.e. Certainty of duration and exclusive possession whereas
the land Act cap 227 provides that the lease may not be for a defined period and as such the only
essential feature under the Land Act is exclusive [Link] possession connotes non
interference from anybody including the land lord. While a lessee enjoys a right to exclusive
possession of a land, a lesser enjoys only a reversionary interest.

A leaseholder cannot deny the landlord a right to obtain a mortgage on the same piece of land.
The leaseholder can be paid off and a mortgage can be created or a mortgage can be created
subject to the expiration of the leasehold interest. The leaseholder can be paid off if the landlord
attaches the property, on execution, the property can be sold off and the Lessee can be paid off
while the bank becomes the new [Link] is no law that obliges a landlord to renew the
lease, he can refuse to renew it and no cause of action can accrue. RIGHT TO EXCLUSIVE
POSSESSIONSection 3(5) of the Land Act defines a Leaseholdtenure as a form of tenure under
which the landlord grants or is deemed to have granted a tenant or lessee exclusive possession of
[Link] is the most essential feature of a lease and this is what distinguishes a License from a
lease.A grant of exclusive possession is the right to enjoy the rented premises to the exclusion of
anyone else; the landlord inclusive. Where the landlord interferes either directly or indirectly,
with the enjoyment of the land or rented premises, then no lease can be talked about because of
the violation of the right to exclusive possession which is mandatory under a leasehold [Link]
establish whether or not an occupier enjoys the right to exclusive possession depends on the
intention of the parties. Hence circumstances of a particular case come into [Link] intention of
the parties can objectively be determined from the terms of the agreement between the parties
and the surrounding [Link] express statement purporting to grant the right to
exclusive possession is neither necessary nor conclusive of the occupier’s legal state. The extent
of control over land retained by the landlord determines whether the occupier has exclusive
possession or [Link] the case of Desai V Cooper (1950) KLR 32 it was stated that if the landlord
retains general control over the rented premises it is strongly believed that there is an
interference with the right to exclusive possession and to that extent the occupier is a mere
licensee as opposed to being a lessee.

In the case of City Council of Kampala V Mukiibi (1967) EA 368 the plaintiff leased certain
premises to the defendant without a right to Sub let without their consent. The defendant allowed
same hair dressers to use the premises paying a daily fee. The plaintiff sought to terminate the
lease on ground that the defendant parted with possession and therefore breached the tenancy
[Link] court found that although the defendant allowed hair dressers to use the premises
subject to payment of a daily fee, he did not give them exclusive possession of the premises, Sir
UdoUdoma CJ observed that a point of great importance which supports the case for the
defendant is that he never at any time parted with possession of the premises, he was always in
change of the Key, it was his Practice to always open the premises and admit or let in the hair
dressers. At the end of the business in the evening after collection of his dues he used to lock the
premises and retain the keys. It is clear from evidence that the hair dressers could only make use
of and occupy the premises with permission of the lessee. In other words the hairdressers could
not use the premises in the absence of the lessee. Hence there was no right to exclusive
possession for the hair dressers. They were not lessees not [Link] OF
DURATIONAt common law a lease must be for a defined duration i.e. Having a specified date
of commencement and agreed upon date of [Link] section 3(5)(c) of the land act
provides that a lease is usually but not necessarily for a period defined directly or indirectly by
reference to a specific date of commencement and a specific date of ending. As such per this
provision a lease may be created even if for a non defined [Link] the case of Lace V
Chantler (1944) 1 All ER 305 the plaintiff, during the 2nd World war Sub-let a house to the
defendant for the duration of the War. It was held that the lease was void for uncertainty of
duration because at the time the purported lease agreement took effect, it was not certain for
what period it will be in effect.A number of cases have been decided in such a way that they
attempt to relax the rule that a lease must be for certain [Link] the case of Ansalt v Arnold
(1888) 2 ALL ER 147

The respondent grated the appellant a right to occupy his premises rent free for an indefinite
period. The agreement was subject to the provision that the respondent will terminate the
arrangement if they require the land for redevelopment by giving a 3 Months notice. The notice
had to be accompanied by a certificate from a reputable developer stating that the respondents
were ready to develop the land. The court of Appeal held that the circumstance under which it
was granted could be clearly determined and ascertained i.e. by giving a 3 Months notice of the
termination and notification of the [Link] case can be distinguished by the case of
PRUDENTIAL COMPANY LTD V UGANDA RESIDUARY where the classical common law
rule of certainty of duration of a lease was emphasized that a lease must be of a certain or
ascertainable time i.e. the exact time the lease must take effect must be clearly stated.N.B The
statutory position in Uganda is very clear that a lease may be for a defined or a non defined
[Link] such certainty of duration is not one of the essential requirements for the validity of a
lease.

TERMINATION OF A LEASE

1. EXPIRY

A lease for a fixed period of time can expire upon the lapse of the agreed

period e.g. if it is a lease for 45 years, upon he lapse of the 45 years the

lease automatically extinguishes.

2. NOTICE

For a fixed term lease,there may be a provision for termination of the lease

upon giving notice and such provisions must be complied with. The notice

must be given by the lesser himself or his recognized agent and it must be
sent to the proper address.

In Lenon V Ladoem, the property belonged to the wife and the zealous

husband gave notice of termination to the lessee. The lessee contested and

the Court held that the notice was illegitimate since the husband had no

authority to give notice on behalf of his wife.

In Balhir V Peneser [1972]EA 94, a lawyer gave notice on behalf of his

client to vacate and deliver possession of the front portion of the estate. The

tenant contended that this was not a termination due to uncertainty.

Court held that a liberal interpretation must be given to the notice so that

even if it is inaccurate, effect is given to it as if it were clear to the recipient.

3. FORFEITURE

Forfeiture is a situation where the landlord is entitled to re-enter the ranted

premises and put an end to the lease, where there has been breach by the

tenant of conditions of the lease even if the lease does not contain an

express clause for forfeiture.

However before the landlord re-enters the land, he must make a formal

demand unless if the leasehold agreement provides to the contrary. It has to

be reasonable notice and it will largely depend on circumstances of the case.

E.g. parties may agree on the type and mode of notice.

For example a clause in a leasehold agreement may provide that a lease

may be forfeited if the rent is in arrears for specified period i.e. Default for 6
months the lesser has a right to re-enter the premises.

The landlord may re-enter the premises either peacefully or by getting a

court order for possession. It is not advisable to re-enter dwelling premises

without proceeding to Court.

Section 25 of the Judicature Act provides for relief from re-entry or

forfeiture for nonpayment of rent. It provides that where a Lessor is

proceeding by action or otherwise to enforce a right of re-entry or forfeiture

for nonpayment of rent, the Lessee may apply to court for relief.

Read Dec. 25 of the Judicature Act.

4. SURRENDER

This is where before the expiration of the lease, the lessee surrenders his

lease to the landlord who, if accepts the surrender, the lease merges with

reversion and it is extinguished. For example if x is the owner of mailo land

at Kibuli, creates a leasehold interest in favour of Y, if Y writes to x showing

an intention to give up the leasehold interest and x accepts, the leasehold

interest is merged with x ‘s reversion.

Surrender may be by express agreement, operation of the law or statutory

provision. A lease is surrendered by operation of the law if a lesser grants

and the lessee accepts a fresh lease commencing before the current lease

expires. A lease is also surrendered by operation of the law where the tenant

abandons the premises and the lessee re-enters.

5. MERGER

Merger occurs where the tenant, in addition to holding his leasehold interest

acquire a reversionary interest as well e.g. where x, the registered proprietor

of Mailo land at Kibuli leases his land to Y for a period of 45 years.

Before the Lapse of Y’s Lease, X agrees to sell his reversionary interest to Y.

in this case, Y’s leasehold interest is terminated by the merger.

NB: For a merger to be effective, the lease and the reversion must be vested

in the same person in the same right.