Lease of Contract

One of the common contracts that people enter into is the contract of lease. Most people, especially in towns, are renting some property. It is therefore apt that there is some level of understanding of the relevant rights and obligations that arise as a result of this nature of contract. Many things can be leased, both movables and immovables.
You can rent a house or a car, for example. A lease is a contract between two parties giving rise to reciprocal obligations, the lessor (landlord) on the one hand, having to avail to the lessee (tenant) the property or thing to be leased for a particular period of time in exchange for rent or payment instances. Rent does not necessarily have to be paid in cash it could be in exchange for counter performance. A lease must be distinguished from sale. In a sale the seller intends to transfer every right the seller has in the thing to the buyer, whereas, in a lease it is a conferment of a temporary enjoyment of the property.

The parties to a lease need to reach consensus on the property to be leased, it must be in existence and be identifiable, to the use and enjoyment of the property and the amount of rent payable. Considering that the contract is for the use and enjoyment of the property (which is the substance of the contract), the contract will not be a lease if the parties intend that the lessee is to have the property permanently or deplete or consume it. The parties normally agree on the duration of the lease, this may vary; it may be a short period or an indefinite period terminable by giving notice. In the event that it is a long lease, usually described to be 10 years and more, they maybe a need to register the lease against the property with the Deeds Registry to be enforceable against third parties like buyers. The principle is that lease comes before sale. The lease may be renewal. This gives the tenant the option to renew it on its expiry. There may be formalities that are required for the renewal to be effective. So, it is important that the tenant must comply fully with the option clause. This may require giving a month’s notice before termination. This may be necessary to forewarn the landlord that the house will be vacant and he must look for another tenant or that you are going to continue staying in the house and a new contract must be drawn.

The parties usually agree on the amount for rent and maybe an escalation after the first anniversary of the lease. The parties may fix the rent amount or agree on a formula by which rent can be calculated. In other jurisdictions, such as the United Kingdom (UK), tenants pay council tax and the landlord must deposit a copy of the lease with the local council to enable the council to know from whom to collect tax.

To enable the tenant to take up occupancy of the house, the landlord must deliver free and undisturbed possession of the property to the tenant. If the property requires a right of passage through another’s property, the landlord must arrange and secure servitude in favour of his property. The property must also be delivered in a reasonable state of repair under the circumstances. If there is somebody else in occupancy of the rented property, the landlord may find himself/herself in a legal squabble, either being sued for specific performance or for breach of contract. It is therefore critical that the landlord should guarantee delivery of the use and occupation of the leased property at the time agreed upon.


Written by Batsho nthoi
http://www.gazettebw.com/index.php?option=com_content&view=article&id=6174:contract-of-lease&catid=21:columns&Itemid=2

This is a basic explanation on the requirement of lease of contract which I have spoken about earlier on. It basically tells what is expected of them when they do enter into contract, what the tenant and landlord's responsibility is in each case.