A housing property to let. A lease has to be registered, which provides
more protection to the occupant, but there are also remedies for those
who have a tenancy. FILE PHOTO | NMG
My column today will be on leases and the importance of getting
the right documentation when one enters into such agreement. There has
been a lot of confusion about terminology when it comes to
leases/tenancies.
Some people interchangeably use the
terms lease and tenancies to refer to the landlord-tenant relationship.
At times legal steps required to effect the tenant’s rights are not
followed, thereby making the documentation null and void. There is a lot
of case law on this subject.
I specifically wish to
quote from Civil Appeal 68 of 1983, the case of Sapra Studio versus
Kenya National Properties where the honourable judge stated, “I must
admit that the minds of many people and probably some lawyers……the term
lease connotes a formal document while a tenancy implies a less formal
document that is wide enough to embrace the relationship between the two
parties concerned.”
It is a common practice to use
these terms interchangeably. The effects may be drastic as in the case
of WJ Blakeman versus Associated Hotel Management Services Limited,
where the court held that where a lease whose term exceeds one year is
not registered, then the same becomes null and void and the rights
therein would be interpreted as a periodic lease, which can be
terminated with one month’s notice.
In commercial
terms, a tenancy agreement is usually for a short period of time and is
usually considered a periodic lease whereby the landlord or tenant can
issue a termination period of one month.
The tenancy
is not automatically renewable and this therefore gives the landlord the
opportunity to introduce new terms to the tenancy, for example, an
increased rent.
A lease on the other hand is for a set
term and is usually longer. Under a lease, the terms are set and the
landlord cannot easily introduce new terms into the lease until they
expire.
The common practice I have seen is that tenancy agreements are
preferred for short term residential stays. I believe the reason is that
a landlord would not like to be strictly tied down to one tenant for a
long time.
Tenancy agreements for residential houses range between three months to two years renewable at the expiry of this period.
I
have noticed that leases are preferred for longer term such as
commercial premises as the landlord would like to have security. The
tenant cannot easily opt out of the lease without giving adequate notice
of up to three months.
A lease should be registered
if it is more than one year. This gives the tenant some rights. For
example, if the landlord wishes to sell the building, then it may have
to be subject to existing tenancies.
Licences on the
other hand allow the licensee short term duration of occupancy without
giving proprietary interests in the premises to the licensee. This would
be very ideal for short term visits like home stays and holidays. The
document can be revoked by the licensor at any time.
It
is important to understand the nature of tenancy one is entering into,
as this will inform the preparation of adequate documentation. From case
law, when a document is not well prepared, the rights of the parties
can be affected.
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