UNIT 7

LEASES

A lease is a contractual agreement between a landlord called the lessor and a tenant called the lessee, granting the tenant the right to occupy and use the property for a specified period in exchange for rent. Leases can cover both residential and commercial properties and are governed by specific laws, statutes, and judicial precedents in Nigeria. See section 2(1) of the conveyancing act 1881 which defined a lease is defined as a term of years absolute. The essence of a lease includes exclusive possession, a certain term, and the payment of rent. See the case of Shell Petroleum Development Co. Ltd v. Federal Housing Authority (2006) 16 NWLR (Pt. 1004) 189 where the supreme court reiterated that a lease involves the grant of exclusive possession of the land or property for a term in consideration of rent. The type of lease includes the following:

1. Fixed-term lease: A fixed-term lease is one that lasts for a specific, agreed period, after which the tenancy ends automatically. The fixed-term lease is governed by the initial agreement between the lessor and the lessee and is common in both residential and commercial properties. See the case of Owoniboys Technical Services Ltd v. UBN Ltd (2003) 15 NWLR (Pt. 844) 545 where the court of appeal held that the tenant’s right to possession ends with the expiration of the lease term unless renewed.
2. Periodic lease: A periodic lease runs from period to period, that is, month to month or year to year and is renewable automatically at the end of each period unless terminated by either party. See section 13(1) of the recovery of premises act (Abuja) which recognize periodic tenancies, particularly in relation to notice of termination of such leases and the case of African Petroleum Ltd v. Owodunni (1991) 8 NWLR (Pt. 210) 391 where the court further expounded on the periodic nature of such leases, clarifying that these leases are indefinite but terminable by proper notice.
3. Tenancy at will: A tenancy at will exists when a tenant occupies the premises with the landlord's consent but without a fixed lease term. Such a tenancy is typically short-term and can be terminated at any time by either party. See the case of Akpan v. Otong (1996) 10 NWLR (Pt. 477) 374 where the court held that the tenancy could be terminated at any time at the will of either party, without requiring notice.
4. Tenancy at sufferance: A tenancy at sufferance arises when a tenant continues to occupy the premises after the expiration of the lease term without the landlord’s consent. The tenant becomes a trespasser in this situation, but the landlord must still follow due process to recover possession. See the case of Ejikeme v. Okonkwo (1994) 8 NWLR (Pt. 362) 266 where the court established that even though the tenant becomes a tenant at sufferance, they are entitled to lawful notice before eviction.

FORMALITIES OF A LEASE

1. Written agreement: See section 4 of the statute of frauds 1677, which applies in Nigeria, and provides that leases for terms exceeding three years must be made in writing and the case of Savannah Bank of Nigeria Plc v. Ajilo (1989) 1 NWLR (Pt. 97) 305 where the supreme court emphasized that leases above three years must be evidenced by writing, duly executed by both parties.
2. Signing and registration: For leases of more than three years, see section 67 of the land use act 1978 which mandates that such leases must be registered with the appropriate land registry in the state where the land is located and the case of Ogunbambi v. Abowab (1951) 13 WACA 222 where the court held that the failure to register a lease of more than three years could render the lease inadmissible in evidence, although it does not invalidate the lease itself.

RIGHTS AND OBLIGATIONS OF PARTIES IN A LEASE

1. Rights of the lessee: the following are the rights of the lessee:
   
2. Exclusive possession: The tenant has the right to exclusive possession of the leased premises during the lease term. See the case of African Petroleum Ltd v. Owodunni (1991) 8 NWLR (Pt. 210) 391.
3. Quiet enjoyment: The tenant is entitled to quiet enjoyment of the property, free from interference by the landlord or third parties. See the case of Onyekwuluje v. Animashaun (1996) 3 NWLR (Pt. 439) 637.

Obligations of the lessee: the following are the obligations of the lessee:

1. Payment of rent: The tenant must pay rent as agreed in the lease. Failure to do so may result in forfeiture of the lease. See the case of Solanke v. Abed (1962) 1 All NLR 230.
2. Maintenance of property: The lessee is obligated to maintain the property in good condition, subject to normal wear and tear. See the case of Ashworth Frazer Ltd v. Gloucester City Council (2001) UKHL.

Rights of the lessor: the following are the rights of the lessor:

1. Receipt of rent: The lessor is entitled to receive rent from the lessee as agreed in the lease agreement.
2. Reversionary interest: The lessor retains a reversionary interest in the property and can re-enter the property after the lease term or upon breach of the lease conditions. See the case of Adewunmi v. Attorney-General of Ekiti State (2002) 2 NWLR (Pt. 751) 474.

Obligations of the lessor: the following are the obligations of the lessor:

1. Delivery of possession: The landlord must deliver possession of the premises to the tenant at the start of the lease.
2. Repair of structural defects: In certain cases, the landlord may be responsible for the structural integrity of the building, particularly where this has been agreed upon in the lease. See the case of Makanjuola v. Balogun (1989) 3 NWLR (Pt. 108) 192.

TERMINATION OF LEASES

Leases can be terminated in several ways, including the following:

1. Expiration of the lease term: The lease terminates automatically when the agreed lease term expires. This is typically a matter of contract interpretation. See the case of African Petroleum Ltd v. Owodunni (1991) 8 NWLR (Pt. 210) 391.
2. Forfeiture: Forfeiture occurs when the tenant breaches a fundamental term of the lease, such as failure to pay rent. The landlord may re-enter and reclaim possession of the property, but this must be done following the statutory procedure. See sections 13-17 of the recovery of premises act and the case of Solanke v. Abed (1962) 1 All NLR 230 where the court upheld the landlord’s right to forfeit a lease for non-payment of rent, provided adequate notice is given.
3. Surrender: A lease may be terminated by mutual agreement between the landlord and the tenant through surrender. The parties agree to end the lease before the expiration of its term. See the case of Alhaji Shitu v. Fashina (2000) 14 NWLR (Pt. 685) 176.

CONCLUSION

Leases are a fundamental aspect of property law in Nigeria, with rights and obligations clearly defined by statutes, case law, and contractual agreements. Understanding the intricacies of lease whether fixed-term, periodic, or at will is critical for both landlords and tenants. Nigerian courts, through various judicial precedents, continue to uphold the principles governing leases, ensuring fairness and clarity in landlord-tenant relationships.