Leases could be created by oral tenancy agreement
coupled with possession, by written
agreement or by seal. These methods of creating leases will now be considered
seriatim;
i. Oral
tenancy agreement coupled with possession
While there are advantages for having a lease in writing, the law recognizes parol
leases. A parol or oral lease must have the following elements in order to be
valid:
a) It must not be for more than 3 years;
b) It must reserve the best rent obtainable;
c) It must confer exclusion possession: Okoye v Nwulu (2000) 11 NWLR (Pt. 724) 362 @ 367.
While parol
leases are permissible, they usually present the difficulty of proving the
essential terms agreed to by the parties; for “a party alleging an oral agreement is duty bound to prove such an agreement to the hilt”: Odutola v Papersack (Nig.) Ltd.
(2007) All FWLR (Pt. 350) 1214. In the case of Ekpanya
v Akpan (1989) 2 NWLR
(Pt. 101)
90, the plaintiff’s claim failed because there was no evidence on the extent of the
property, the
date
of commencement and the
term
of years of the lease.
ii. A written tenancy agreement
A lease could be in writing but not necessarily under seal. In such cases, it signed in the hands of the parties only. It is binding on the parties as a contract and is enforceable.
The
advantage of having a lease in writing is that the terms in the lease are easily ascertainable and enforceable. Secondly, an order of specific performance may be easily ordered in
written leases otherwise, a party seeking for it may have to rely on part performance of the lease to have it enforced.
iii. Deed of lease
A lease could be made by deed. Indeed, leases above three years are required to be by
deed. In such a case, it must be signed, sealed and delivered. This satisfies certain legal requirements in Nigeria which provides that all conveyances of land or of any interest
therein are void for the purpose of conveying or creating
a legal estate unless made by
deed: section 77(1) of the Property and Conveyancing Law.
Advantages of a Formal Lease as against an Oral Lease
A formal lease has the following advantages over an oral lease;
a. Covenants that by law must be
express will not be implied into an oral lease;
b. In terms
of enforcement,
it is
easier
to enforce
a
formal
lease by
specific
performance than an oral lease, which may required part performance;
c. In the case
of a
formal lease, it
is possible to
claim damages where specific
performances fail; but where part performance fails in an oral lease, damages
will
also fail.
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