Today, I will be
writing on the various events that can lead to termination of a lease or
tenancy contract in relation to land and property leasing as an aspect of
estate agency practice.
Three things prompted
me to write this particular post and they are;
(1)
To assist all those aspiring to sit for
and/or write the Nigerian Institution of Estate Surveyors and Valuers’
Professional Qualifying Examination stage 3 (PQE 3), as well as all students of
estate management study and those practicing in the real estate and surveying
profession.
(2)
To also enlighten and broaden the
knowledge/understanding of everybody that has a particular relationship with
land and landed properties either as a property owner/investor or
tenant/occupant.
(3)
Most importantly, I want to reveal to tenanted
occupants as well as landlords/property owners alike, the various ways by which
a particular lease/tenancy contract can be terminated other than the usual and/or
normal eviction notices which is always served on the occupant of such leased
property whenever the lease/tenancy contract is to be terminated.
Before I continue with
the write-up, let me briefly explain to you the meaning and distinction between
a lease contract and tenancy contract as it relates to estate surveying and
valuation practice in Nigeria even though they are both used interchangeably in
the profession.
Lease contract refers
to the legal agreement whereby an owner – Lessor - of a property permits
somebody else – Lessee – to use his/her property for a particular purpose and
for a definite/stipulated period under certain terms and conditions as agreed
by both parties in a lease agreement.
Preparation of a lease
contract/agreement between the lessor (Property owner/landlord) and lessee
(tenant/occupant) is usually done by lawyers to the parties involved in the
lease transaction as there are some legal terms in the lease document as well
as general duties/obligations that will need to be explained to all the parties
to the lease contact in other to guide and protect their interests during the
lease period.
The length of a lease
contract in relation to land and landed properties’ leasing transaction is
usually from 3 years upwards.
Tenancy contract on its
own part is described to mean the exclusive possession of occupation which a
person – usually referred to as a tenant – enjoys on another person’s – landlord
– property (residential or commercial property) based on an agreed rent paid to
the landlord.
Tenancy
contract/agreement which spells out the duties and obligations of the tenant
and landlord during the tenancy period can be prepared by the professional
estate agent employed by the landlord/property owner of the tenanted property.
In preparing the
tenancy agreement/contract, the professional estate agent engaged by the
property owner/landlord will partner with the legal department of his/her
estate surveying and valuation firm in drafting such tenancy agreement/contract
for the tenant and landlord.
The length of a tenancy
contract in relation to land and property leasing ranges between 1year and 2years.
The following 15
circumstances are events that can terminate a lease and/or tenancy contract:
1.
Expiration of Lease or Tenancy
Contract: A lease or tenancy contract can be
terminated after the expiration of the lease/tenancy period and whereby the
lessee/occupant of the leased/tenanted property decides not to renew his/her
lease/tenancy with the property owner/lessor.
There
are so many reasons why a lessee/tenant may not want to renew their
tenancy/lease contract after its expiration, some of which they may voluntarily
or involuntarily explain to the property owner/lessor.
Where
this kind of event arises, the lease/tenancy contract between the property
owner/lessor and the tenant/occupant expressly comes to an end.
2.
Surrender and Acceptance of
Existing Lease/Tenancy Contract: Another circumstance
that can terminate a lease/tenancy contract is a situation whereby the
tenant/lessee surrenders (give up) his/her existing lease/tenancy yet to be
expired to the landlord/lessor and the landlord/lessor upon receiving such
notice accepts it from the tenant/lessee.
In
this particular event, I want you to know that the tenant/lessee in question
still has an unexpired lease/tenancy term on the leased/tenanted property but
goes ahead to surrender his/her existing lease/tenancy contract with the
landlord/lessor who in turn also accepts it.
The
lease/tenancy contract will automatically come to an end once the
landlord/lessor accepts the written notice of the tenant/lessee to surrender
his/her existing lease/tenant contract.
3.
Breach of Lease/Tenancy
Conditions/Terms: In the course of preparing a
lease/tenancy agreement/contract, there are some certain duties and obligations
to be observed and adhered to by both the landlord/lessor and tenant/lessee
during the period of the lease/tenancy contract. A breach of any of these
lease/tenancy agreement conditions on either part of the landlord/lessor or
tenant/lessee may warrant the lease/tenancy contract been terminated.
This
is why it is always important for both landlord/lessor and tenant/lessee in any
lease/tenancy contractual relationship to always observe their obligations
which serves as a condition for the lease/tenancy relationship they enjoys if
they don’t want such to be terminated.
4.
Actual Eviction of Lessee/Tenant
From The Leased/Tenanted Property: Another major event
that can terminate a lease/tenancy contract between a landlord/lessor and
tenant/lessee is actual eviction of the lessee/tenant from the leased/tenanted
property.
Actual
eviction of a lessee/tenant from a leased/tenanted property plays a critical
role in terminating a lease/tenancy contract and one of the major reason for
this, is that just mere serving of a Notice to Quit to a lessee/tenant on a
leased/tenanted property may not in some cases be enough to terminate a
lease/tenancy contract most especially when such lessee/tenant is a
recalcitrant person.
A
recalcitrant lessee/tenant served a Notice to Quit may still be occupying the
leased/tenanted property for some months or even years after such notice to
quit has been served on him/her and this act will make his/her lease/tenancy
contract to still be running even without paying any form of rent until after
such a tenant is finally evicted through a court order or other lawful means
that the lease/tenancy contract will cease to exist.
5.
Destruction of The Leased/Tenanted
Property: There are series of destructive events
that can terminate a lease/tenancy contract between a landlord/lessor and
tenant/lessee.
Some
of these destructive events are; Fire Outbreak, Acts of war, Building collapse,
and Force Majeure (landslide, ocean surge, earthquake, flooding, hurricane
etc). A leased/tenanted contract will be terminated in a situation where any of
these destructive events takes place.
While
some of these destructive events are manmade, others may be uncontrollable by
human
effort.
6.
Foreclosure of The Leased/Tenanted Property
Through Mortgage: Another circumstance which can terminate
a lease/tenancy contract between a landlord/lessor and tenant/lessee is a
situation whereby the landlord/lessor used the leased/tenanted property as a
collateral/instrument to secure a loan for mortgage purpose from a mortgage
institution but defaults in paying back the loan at the stipulated period
thereby forfeiting the leased/tenanted property to the mortgage institution
through foreclosure.
Whenever
a leased/tenanted property is foreclosed due to non-payment of loan received
from a mortgage institution by the landlord/lessor who has used the subject
property as collateral for a loan advancement, the lease/tenancy contract
currently existing between him/herself and the tenant/lessee will be terminated
because the mortgage institution will want to take possession of the
leased/tenanted property used as collateral to secure the loan advancement
through foreclosure.
7.
Frustration of Lessee/Tenant By The
Landlord/Lessor:
This
is another situation where a lease/tenancy contract can be terminated. It may
be a situation where the landlord/lessor tries everything possibly legal or not
to evict the tenant/lessee without any success.
The
landlord/lessor may then embark on different kinds of acts either to the
tenant/lessee or on the leased/tenanted property so as to frustrate the
tenant/lessee in quitting the leased/tenanted property.
Acts
of frustration in other to terminate a lease/tenancy contract is in most
scenarios usually carried out or embarked upon by the landlord/lessor who wants
to forcefully evict the tenant/lessee because he/she wants to terminate the
lease/tenancy contract between them.
8.
Notice To Quit: This
is one of the most easiest scenario to terminate a lease/tenancy contract. It
involves the landlord/lessor of the leased property writing a Notice To Quit to
the tenant/lessee occupying the leased/tenanted property.
The
notice to quit letter is usually written to the tenant/lessee some months prior
to the expiration of the existing lease/tenancy contract by the professional estate
agent/property manager to the landlord/lessor who has been given such
instruction by the landlord/lessor.
The
contents of the notice to quit letter will indicate the stipulated time frame
which the tenant/lessee should give up possession of the leased/tenanted
property after the expiration of the lease term or tenancy period, as well as
the reasons why the tenant/lessee should quit the tenanted/leased property
after its expiration.
The
lease/tenancy contract will eventually be terminated the moment the
tenant/lessee vacates the leased/tenanted property after the stipulated time
frame given to do so in the notice to quit letter.
9.
Surrender And Renewal Of Existing
Lease/Tenancy Contract: This is another
scenario that can terminate a lease/tenancy contract between a landlord/lessor
and tenant/lessee. It involves the tenant/lessee on the leased/tenanted
property surrendering his/her unexpired lease term (unused years) to the
landlord/lessor in other to immediately renew such lease/tenancy contract for a
new one.
This
refers to the situation whereby a tenant/lessee on a leased/tenanted property
gives up his/her remaining lease term through termination of the existing
lease/tenancy contract with the landlord/lessor and at the same time creating a
new lease/tenancy contract on the same leased/tenanted property with the
landlord but on improved terms and conditions.
Unlike
surrender and acceptance of existing lease to terminate a lease/tenancy
contract, surrender and renewal of existing lease/tenancy contract is
instigated by the tenant/lessee to the landlord/lessor who is not under
compulsion or force to accept the surrender notice and also grants a new
lease/tenancy contractual agreement on improved terms and conditions with the
lessee/tenant.
10.
Compulsory Acquisition of The
Leased/Tenanted Property By Government: Government do
acquire different classes of land and landed properties for various purposes
which will be of great benefit to the generality of the citizens. If during the
course of carrying out a compulsory acquisition exercise, some certain
leased/tenanted properties are affected, the consequence of this is that the
lease/tenancy contract between the landlord/lessor and tenant/lessee will be
terminated.
The
landlord/lessor of the leased/tenanted property may be compensated by
government before, during or after completion of the compulsory acquisition
exercise but this will not have any changes to the terminated lease/tenancy
contract.
11.
Court Order: This is another event that can terminate a
lease/tenancy contract between a landlord/lessor and tenant/lessee.
In
the case of a land dispute between two or more parties laying claims to the true
ownership of a particular lot/portion of land where a leased/tenanted property
is lying and situates.
If
the party with whom the court grants its ruling in his/her favour is not the
landlord/lessor of the leased/tenanted property, then the lease/tenancy
contract will be terminated as the court will grant an order of possession to
the party who won the case in court to take over the leased/tenanted property.
12. Breach
of Statutory Building Codes And Property Laws: This
is another event that can terminate a lease/tenancy contract. It arises when a
leased/tenanted property falls short of various applicable building codes and
property laws as been stipulated and spelt out by the government and/or its
agencies.
Action that can be taken by
government or its agencies as a form of punishment may be to seal up the leased/tenanted
property thereby terminating the lease/tenancy contact been enjoyed by the
landlord/lessor and tenant/lessee.
13.
Renovation And Improvement Works:
A lease/tenancy contract can be terminated when there is the need to carry out
renovation and improvement woks on the leased/tenanted property by the
landlord/lessor.
Think
of a situation where the landlord/lessor of a leased/tenanted tenement property
(Face Me; I Face You) decides to carry out renovation and improvement works on
the said tenement property by converting same to units of mini-flats or two
bedroom apartments.
When
the event occurs, lease/tenancy contract currently enjoyed by tenant/lessee
from the landlord/lessor will seize to continue.
14.
Property Demolition: Under
this circumstance, there are so many ways which lease/tenancy contracts can be
terminated.
Property
demolition exercise for infrastructural development programmes that is been
embarked upon by the various tiers of government can terminate lease/tenancy
contracts.
15.
Total Wear And Tear (Obsolescence):
Events which results in total wear and tear of a building components and its
physical appearance can also terminate a lease/tenancy contract between the
landlord/lessor and tenant/lessee occupying the leased/tenanted property.
The
act of total obsolescence resulting in adverse wear and tear of a
leased/tenanted property will terminate the lease/tenancy contract been enjoyed
as the property becomes inhabitable for people.
A
perfect example of this particular scenario is some residential properties
(Jakande estate-type buildings) around Adeniji Adele area of Lagos Island,
Lagos state which are totally obsolete and not suitable for human habitation
again due to adverse effect of total wear and tear on them.
Hope I have been able
to do meaningful justification to those reasons I said prompted me in writing
this post.
Kindly drop your
comments in the box below!
ABOUT
THE AUTHOR
Adeniyi Akinjiyan is a
Higher National Diploma (HND) holder of Estate Management from the prestigious
Yaba College of Technology, Yaba, Lagos state, Nigeria. He possesses a
Professional Practice Certificate in Estate Surveying and Valuation from the
Nigerian Institution of Estate Surveyors and Valuers (NIESV).
He is the principal
consultant of Aakient Consultants Ltd, a highly progressive and consolidated
property and construction project management company, which is committed to
providing the highest level of professional services in meeting clients’ real
estate needs.
Feel free to contact
him at: aakientconsultants@gmail.com
