Leases

Nature, Creation, Types and Transfer

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What is a Lease?
A lease is an agreement to use
another’s land, usually for a specific
time in return for the payment of
rent.
It creates between the Lessor and
the Lessee the special relationship
of landlord and tenant.
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Features of a Lease
 Rent – the lessee should necessarily pay rent for the use of the
premises although it has been held that in certain circumstances, a
lease can exist without the payment of rent.
 Ashburn Anstalt v. Arnold [1989] Ch. 1 (conflicts with Street versus
Mountford on requirement of rent) . Defendant is successor in title to
company which leased to claimant).
 It has also been held that rent can be in the form of transfer of
shares in a company.
 Adomako v. Enterprise Insurance Co. Ltd & Consortium House Ltd
[2011] 1 SCGLR 247
 The lease must be for a definite period. It must have a certain
beginning and a certain end.
 Leases in possession (commencing immediately) and leases in reversion
(commencing in the future).

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Features of a Lease
 The parties can agree on a lease for any period however long or short though
the lease may be terminated before the term ends. Periodic tenancies are
acceptable because the maximum period for any such tenancy can be
ascertained at any time.
 Lace v. Chandler [1944] KB 368 ( a lease term of uncertain duration invalid).
 Prudential Assurance Company Limited v. London Residuary Body [1992] 2 AC
386 periodic tenancies are saved from being of indefinite duration because
each party can serve notice to terminate at end of each rent period-periodic
tenancy).
 Exclusive Possession – the lessee must have exclusive possession of the
leased property. A person on land who is not entitled to exclusive possession
may be a licensee and not a lessee.
 Street v. Mountford [1985] AC 809
 The landlord may however put restrictions on the way the property is used.

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Distinction between a lease and a license
The main distinction is the concept of exclusive
possession
Street v. Mountford
Addiscombe Gardens v. Crabbe
Brutton v. London and Quadrant Housing Trust
Exclusive possession connotes that the grantee has
been given general control over the property.
 Wells v. Hull Corporation
Marchant v. Charters

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Distinction between a lease and a license
What if the grantor retains keys to the premises? Does it
negate exclusive possession? It will depend on the
reason for the retention of the keys.
 Aslan v. Murphy
There are however cases where a person may have
exclusive possession but will still be a licensee. Such
cases arise through
 Acts of generosity, charity or friendship where there is no
intent to create legal relations.
 Heslop v. Burns
 Gray v. Taylor
S 6
Distinction between a lease and a license
Service occupancies and duty post
accommodation(create a license that is personal to
the employee)
Crane v. Morris
Ampomah v. VRA

Occupancy prior to the completion of a contract

for sale.
Street v. Mountford

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Creation of Leases
 Leases, being transfer of interests in land are to be in
writing.
 Section 1(1) and section 10 of NRCD 175 ( Repealed replaced by section 35 ( 1)
of act 1036)
 Djan v. Owoo [1976] 2 GLR 401 – Exchange of letters embodying all the
relevant terms was held to be a valid lease.
 Exception – oral leases – section 3 (1) (f) of NRCD 175
(Section 36 of Act 1036).– a lease taking effect in possession
for a term not exceeding three years may not be in writing.
 All essential terms of the lease must be included in the
agreement – parties clearly identified, rent stated and
duration determined.

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Doctrine of Part Performance
 Section 3(2) of NRCD 175
 Oral Lease
 An oral lease which is for a duration of more than three years
may be enforced in equity if it is followed by certain acts of part
performance that will make it specifically enforceable.
 Sackey v. Ashong (1956) 1 WALR 108
 Djan v. Owoo
 Sbaiti v. Samarisinghe [1976] 2 GLR 361
 Koglex Ltd. (No. 2) v. Field [2000] SCGLR 175
 Kotey v. Kolete [2005-2006] SCGLR 368
 Tahiru v. Mireku [1989-90] 2 GLR 616
 Sykes v. Abbey [1995-96] 1 GLR 81 (SC) – Not necessarily a lease but
the principle spot on.
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Doctrine of Part Performance
 In Kotey v. Kolete, the Supreme Court restated the
requirements for an act of part performance in equity
which are as follows:
 The act must be referable to the contract alleged and no
other title;
 It must be such as to render it a fraud in the defendant to
take advantage of it not being in writing;
 the contract in its own nature must be enforceable by the
court;
 there must be proper parole evidence of the contract.
 See also Tahiru v. Mireku

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Doctrine of Part Performance
 Agreement for a Lease
 Where an agreement for a lease which contains all the essential features of a
lease is not being performed by one of the parties, the court may order specific
performance in appropriate cases. Equity sees as done that which ought to
be done.
 That agreement must be in writing (S. 2 of NRCD 175) S. 34 and 35 ACT 1036.
and it must contain all the material terms of a lease which may include
 The names of the parties;
 An adequate description of the property;
 The term granted;
 Rent payable;
 Any special covenants;
 Signature of party against whom the agreement is to be enforced.
 Sackey v. Ashong;
 Walsh v. Lonsdale (1882) 21 Ch. D 9

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Doctrine of Part Performance
 Usually said that an agreement for a lease is as good as a lease. This is not
true in all circumstances because
 The agreement does not vest any legal title in the supposed lessee;
 Specific performance is a discretionary remedy;

 It creates a mere equitable interest which may be overreached by a

bona fide purchaser for value without notice of the equitable

interest.
 Kusi & Kusi v. Bonsu [2010] SCGLR 60

 Western Hardwood Enterprises Ltd. v. West African

Enterprises Ltd [1997-1998] 1 GLR 645
 Gyimah & Brown v. Ntiri [2005-2006] SCGLR 247

 The aggrieved party may alternatively sue for damages for breach of contract.
 Pele v. International Commercial Bank [2001-2002] 1 GLR 53

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Types of Leases
Leases for fixed periods. Otherwise referred to as
leases for term of years absolute. Period as long or as
short as the parties may choose.
Reversionary leases – usually a fixed period lease but
which takes effect at a future date. It may be granted to
take effect after the expiration of an existing lease.
Equitable leases are leases that take effect in equity
when there is part performance and the courts will order
specific performance of the agreement as discussed
above.

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Types of Leases
Concurrent leases – usually an assignment of the
reversion.
Granted where there is an already existing lease but
the lessor as a result of debt or some allied issues
grants a concurrent lease so that the new lessee will be
entitled to rents accruing from the original lessee.
The new lessee therefore steps into the shoes of the
landlord in the original lease.

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Types of Leases
• Periodic tenancies – tenancies which automatically
renew themselves at the end of each period.
• Duration is indefinite but may be terminated at any time.
• They may run for periods of a year, month, week or
quarter.
They may be created expressly if the document that
creates it states so by the use of such terms as yearly,
monthly, weekly amongst others.
They can also be created orally under section 3 of NRCD
175.

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Types of Leases
They may also arise by implication of law from the
payment of rent or inferred from the conduct of the
parties. Some circumstances under which periodic
tenancies may arise are:
Where a lease is void for not being by deed, or else has
not proceeded beyond the contract stage but the tenant
has entered into possession and paid rent.
Where the lease has terminated, but the tenant is
allowed to stay in possession, paying rent as before.

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Types of Leases
 Tenancy at will – tenancy subject to the will of the landlord.
 Where a lease has expired but the tenant continues to stay on the
premises with the consent of the landlord.
 Tenant must occupy the property as a tenant with the consent of the
landlord.
 No notice needed here when it comes to termination but it may be
given.
 Duration uncertain and tenant has no security of tenure.
 This tenancy also terminates when either party assigns his interest or
on the death of either party.
 Usually converted to a periodic tenancy where rent is paid in
accordance with a fixed period.
 The right of either party to terminate the tenancy at any time a
fundamental characteristic of a tenancy at will.

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Types of Leases
Tenancy at sufferance – the landlord is suffering you
to be on the premises.
Arises on the termination of a lease but the tenant
holding over without the consent or dissent of the
landlord.
If it is with the landlord’s consent – tenancy at will or a
periodic tenancy on the payment of rent.
If the landlord dissents – the tenant becomes a
trespasser.

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Transfer of Leases
• There are two main ways by which a lease
or part of the lease can be validly
transferred by the lessee to a third party:
 Sublease; and
 Assignment.

• The lessor can also assign his interest or

part of his interest in the reversion to a
third party.
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Transfer of Leases
Sublease – this occurs where the lessee grants a term
shorter than his own to a third party.
The sub-lessee becomes a tenant of the lessee but has
no tenure relationship with the head lessor.
For there to be a valid sublease, the term granted must
necessarily be shorter than the lessee’s original term.
If a person purports to grant a sublease which in effect
disposes of the lessee’s whole interest in the property,
the law sees it as an assignment and not a sublease.
 P. Y. Attah & Sons Ltd. v. Kingsman Enterprises Ltd. [2003-2005] 2 GLR 90, CA

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Transfer of Leases
 Assignment – occurs where the lessee transfers the
residue of his interest in either part or the whole of the
property to a third party.
 The new party (assignee) steps into the shoes of the
lessee. He thus becomes a lessee to the original lessor.
 The lessor may also assign his interest or part of his
interest in the reversion to a third party.
 The new party steps into the shoes of the lessor and he
becomes the lessor (landlord) of the original lessee.
 SS 27 and 28 of NRCD 175.

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