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Chapter 5 (Leases and Tenancies)

1) A lease is an agreement whereby a registered proprietor allows another party (lessee) to occupy land for a specified period in exchange for rent. Under Malaysian law, leases must be for a term over 3 years and registered. 2) Tenancies exempt from registration allow occupancy for under 3 years and do not need to be registered, but tenants can apply to endorse their interest on the land title for protection. 3) Leases can be terminated through surrender by agreement of lessor and lessee or through expiry of the lease term as stated in the agreement. Upon termination, occupancy and rights to the land end.

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0% found this document useful (0 votes)
119 views4 pages

Chapter 5 (Leases and Tenancies)

1) A lease is an agreement whereby a registered proprietor allows another party (lessee) to occupy land for a specified period in exchange for rent. Under Malaysian law, leases must be for a term over 3 years and registered. 2) Tenancies exempt from registration allow occupancy for under 3 years and do not need to be registered, but tenants can apply to endorse their interest on the land title for protection. 3) Leases can be terminated through surrender by agreement of lessor and lessee or through expiry of the lease term as stated in the agreement. Upon termination, occupancy and rights to the land end.

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Lease and Tenancy noted in the Presentation Book) and of the

reference under which the application is to


be filed
-introduction:
S. 317 (2): Registrar shall not deal with any
=) lease: such application until he has finally disposed
of every instrument of dealing or like
lease is a type of dealing under the NLC application presented or received prior
whereby the registered proprietor allows a thereto and relating to the same register
lessee to occupy the land for a specified document of title
duration in consideration of the payment of
rent S. 317 (3): Registrar shall reject any such
application if:
S. 221: a proprietor of alienated land may
grant leases for a term exceeding 3 years in ~by virtue of S. 213 (3) or S. 267 (2)
respect of the whole or any part of his land. (including the said subsection (2) as
Where the lease relates to the whole piece applied by S. 281 (3) the tenancy claimed
of land the maximum duration is 99 years, if has already been defeated by the
it is only of a part of the land the maximum registration of a transfer of, or certificate of
duration is 30 years sale relating to, the reversion expectant
thereon, or
S.213 (1): a proprietor of land or a lessor
may grant a tenancy: i.e. a right to occupy ~applicant is unable to produce any
land for a term not exceeding 3 years, this is chargee's consent necessary as mentioned
a tenancy exempt from registration in S. 316 (2) (b)

=) tenancy: S. 317 (4): on rejecting any such application


the Registrar shall return it to the applicant
tenancy exempt from registration may be and note the rejection in the Presentation
created either orally or by a written Book
agreement. It is an unregistered interest.
S. 317 (5): Registrar shall not, except as
S. 316: to protect his interest in land a provided by sub-section (3), be concerned to
tenant may endorse his interest on the enquire into the validity of any claim to the
register document of title benefit of a tenancy exempt from
registration, and the endorsement of any
procedure for applications for
such claim pursuant to this section shall not
endorsement:
be taken as confirming its validity in any
shall be accompanied by a plan and respect
description sufficient to enable the part to be
S. 317 (6): every endorsement made under
accurately identified; where, applicable the
paragraph (c) of sub-section (1) shall be
consent in writing of any chargee
signed and sealed
S. 317 (1): on receiving any application
Than Kok Leong v Low Kim Hai
under S. 316, the Registrar shall:
~if the tenant fails to endorse it will not bind
~note thereon the time at which it was
any subsequent lessee, sub- lessee,
received,
tenant, charge or lien holder
~make a note of the application, and the
~purchaser not bound by an unendorsed
time of its receipt, in the Presentation Book,
tenancy
and
Luggage Distributors (M) S/B v Tan Hor
~subject to sub-sections (2) and (3) and
Teng & Anor
Part Nineteen, give effect thereto by
endorsing the register document of title ~tenancy exempt from registration was not
with the words "Exempt tenancy claimed", a caveatable interest, only protection for
together with a statement of the time from tenants is an endorsement on the RDT
which the endorsement is effective (being
the time of receipt of the application, as
-characteristics of a lease: number of cases that what is important is the
intention of parties
=) lease is a type of dealing whereby the
registered proprietor allows a lessee to Woo Yew Chee v Yong Yong Hoo
occupy the land for a specified duration in
~test: whether it is intended that the
consideration of the payment of rent, under
occupant should have an interest in the
NLC, a lease must be for a term above three
premises let/ whether it is a privilege
years and must be registered at the land
personal (licensee) to himself only
office
Mohamed Mustafa v Kandasami
=) lease transaction is normally evidences by a
written agreement stipulating terms of the ~court followed Woo Yew Chee case and
lease as well as obligations of the parties. In held test of exclusive possession was no
order to have statutory recognition of this longer decisive test and that it was the
agreement, the parties should execute the nature and quality of the occupancy which
requisite statutory forms for a lease or sub- mattered
lease under NLC
~while the grant of excessive possession is
=) S. 221 (4): a lease must be registered – essential to determine whether a lease or
Form 15 A or sub lease – Form 15 B under tenancy has been granted, it does not
the NLC – i.e. requirement of both writing necessary follow that there is a lease or
and registration tenancy if exclusive possession is granted
=) S.234- 240: subject to any provisions to the
contrary the provisions for forfeiture apply to
all lease, sub lease and tenancies -determination of lease:

=) restrictions to creation of leases: surrender

S. 225 subject to any prohibition or =) a way in which the lessee may terminate the
limitation imposed by the NLC or any other lease before the original termination date is
written law eg. S. 221(3) maximum duration by way of agreeing with the landlord to
of leases; any restrictions or prohibition in surrender the lease
the IDT; a lease or tenancy may not be
=) S. 239 (2): surrender of lease or sub-lease
created in favour of more than 1 person or
can be done by the lessor and lessee
body unless they are in the capacity of
executing Form 15C and registering such
trustees or personal representatives of an
form at the land office
estate;
=) S. 239 (3): for tenancy exempt from
S. 226 where the land is subject to a charge
registration, a surrender can be done by
the written consent of a chargee is required
word of mouth or any written agreement
lease as distinguished from license =) S. 293 (4): any such surrender must obtain
license does not create an interest in land the written consent of the charge
but is a personal obligation, compensable on =) S. 239 (5): surrender of a lease will not
breach, with damages, ex: where a hotel affect any sub-lease or tenancy granted from
allows a guest to stay in a room or where a the lease, instead, the lessor is taken as
cinema allows a patron to sit in its theatre taking over such sub-lease or tenancy from
unlike license, a lease creates an interest in the lessee of the surrendered lease
land which upon dispossession entitles the expiry of term
lessee to recover possession of the land,
lease is also capable of enforcement against =) lease automatically terminates upon expiry
the landlord’s successors in title, therefore, of the prescribed period, under NLC, this is
whilst a license is a right in personam, a governed by S. 240 where the registration of
lease is a right in rem such lease may be cancelled by the
Registrar under S. 313
exclusive possession is no longer a
decisive factor as the courts have held in a =) with regards to a tenancy exempt from
registration, upon the expiry of the tenancy,
the endorsement made on the register as subsisting shall constitute a waiver of the
document of title may be cancelled right to forfeit

service of valid notice to quit =) S. 240: effect of forfeiture of the lease is to


extinguish all interests, dependant on the
=) following the provisions of the lease lease including a charge, sub-lease and
agreement, either party may have the right to tenancy
terminate the lease before expiry by serving
a valid Notice to Quit to the other party in =) NLC does not prohibit a lessee form
accordance with the manner prescribed in applying to the court for relief against
the lease agreement forfeiture, any chargee, sub-lease or tenant
adversely affected by the forfeiture of the
=) NLC does not provide any provision or Form lease may also apply to the court under S.
relating to Notice to Quit, hence, reliance is 238 for an order that any lease, sub-lease or
considerably placed on the words of the tenancy to granted to them as the case may
lease agreement itself as to the prescribed be but this based on entirely on the
manner of giving such notice and common discretion of the court having considered all
law may be referred to with regards to the the circumstances of the case, such lease,
reasonable period to be stated in the Notice sub-lease or tenancy granted by the order
of Quit must not exceed the period of the former
=) words used in a Notice to Quit must express lessee
an unequivocal and unconditional intention
to terminate the lease as of a certain date
-effect of non- registration lease:
forfeiture of lease
=) an unregistered lease will take effect as an
=) where the landlord is given the right to agreement for a lease and parties and
terminate the lease upon the violation of merely creates contractual rights in
certain terms and conditions of a lease by personam, it is merely an equitable lease
the lessee, such right is called ‘forfeiture of and cannot bind parties not privy to the
the lease’ agreement
=) violations may include failure to pay rent as =) Tan Kiaw v Gan Chye Koon
agreed, unauthorised sub-letting or tenancy,
unauthorised or unlawful use of premises an oral tenancy is not binding on the
and damages to the premises for failure to subsequent Purchaser
keep in repair
=) S. 228 (2): likewise any option conferred by
=) NLC provides several exhaustive provisions an oral tenancy shall be unenforceable
relating to forfeiture of lease
=) Hotel Ambassador S/B v Seapower S/B
S. 234 (1): subject to any contrary provision
notwithstanding a sale subject to all existing
in the lease, every lease shall be liable to
tenancies, a tenancy not protected by an
forfeiture where; the lessee breaches any of
endorsement may not be binding on the
the provisions of the lease; or is adjudicated
purchaser
a bankrupt; or being a company, it goes into
liquidation =) Margaret Chua v Ho Swee Kiew & Ors
=) S. 234 (3): manner of forfeiture is either by failure to register a 25 year agreement to
way of re-entry on the land or by action in lease rendered it an equitable lease, lessee
the court by lessor, however, the lessor must could sue for specific performance to order
first serve on the lessee a written notice the lessor to register the lease
specifying the breach or violation, a
statement requiring such breach or violation =) Wan Salimah b Wan Jaafar v Mahmood b
to be remedied and if the violations relates to Omar
non-payment of rent, any action done by the
lessor in accepting the rent or the doing of
any ac to show an intention to treat the lease
D. entered into a written agreement for a
lease for 15 years of his share of the land to
the P. for 15 years, however the lease was
not registered as D. refused to sign the Form
15A
meanwhile D. entered into a SPA with the
Intervener, P. applied to court for specific
performance that the D. be ordered to
execute the Form 15A
held: court granted application
=) specific performance may be granted:
Lin Nyuk Chin v Wong Sz Tsin
~where there has been performance (and
especially where a tenant has gone into
possession under an agreement to lease) a
court of equity will not usually refuse to
decree specific performance
Siew Soon Wah v Yong Tong Hong
~where the agreement is clear and certain
in its terms, the court will give effect to the
intention of the parties as expressed even
though the agreement is void as a lease

-tenancy coupled with equity:


=) similar to the equitable lease, a tenancy
where the landlord has encouraged the
tenant to spend his money to improve the
land, ex: construction of building, with the
expectation of being allowed to remain on
the property may give rise to equitable rights,
this follows the English decision of Inwards v
Baker as adopted in the Malaysian cases of
MPRL Karuppan Chetty v Suah Thian and
Devi v Francis
=) estoppel of a tenant is founded upon the
contract between him and his landlord,
estoppel applies to a tenant holding over
after a notice to quit
Wee Tiang Yap v Chan Chan Brothers
~a tenant cannot deny his landlord’s title
however defective it may be unless he has
surrendered his tenancy to his landlord
=) tenant in possession who spends money in
improving the property in the hope of an
extended term or allowance for expenditure
will have no claim if he has not received any
encouragement from the landlord

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