Land Tutorial

Week 2
PRESENTATION

Question 1:

Explain

the main elements in

lease and tenancy

3 Essential Main Elements;

1) First, the lessee or tenant is given the right to exclusive

possession of the demised premises during the term of the
lease or tenancy. If there is no grant of a right to the exclusive
possession of the premises, then there is no lease or tenancy.

A person who is granted a right to occupy premises but is not

given exclusive possession, as where the grantor retains the right
to enter the premises at will or if he remains in general control of
the premises, may only be a licensee or the holder of a lesser
interest but not a lessee or a tenant.

Case Law:

In the case of Woo Yew Chee v Yong Yong Hoo [1979] 1 MLJ
131, The Federal Court in this case decided that the ultimate test
to decide whether there is a right to exclusive possession, is the
nature and quality of the occupancy. It must be determined
whether it was intended that the occupier should have a stake in
the sub-let or whether he should only have a privilege. The
Federal Court in this case, looked at the agreement to interpret
the intention of the parties whether the agreement was to create
a lease or a license.

2) Secondly, a lease or a tenancy must be granted for a definite

period which is capable of being ascertained.

A lease or tenancy which has no definite time of commencement

or period of duration is void for uncertainty.

Case Law:

In the case of Siew Soon Wah v Yong Tong Hong [1973] 1

MLJ 133, the court in asertained what was meant by the parties
with the words tenancy shall be permanent in the written
agreement, and that is that R should rent the premises for as
long as the landlord could let them and so long as R wishes to
occupy and pay rent. The above mentioned words did not mean
that the tenancy was to be in perpetuity as there is no such thing
in law as a lease in perpetuity. If however, the agreement was
vague and uncertain, it shall be deemed to be void for
uncertainty.

3) Thirdly, there must be intention to create a lease or a

tenancy. If there is exclusive possession, but no intention, it is
then not a lease or a tenancy.

Case Law:

In the case of Kandasami v Mustafa [1983] 2 MLJ 85, it was

held that exclusive possession is no longer a decisive factor. The
utmost important factor in determining whether it is a lease or a
tenancy is the intention of the parties in that dealing. The label of
which the parties attach to their relationship, is not necessarily
conclusive in nature although it may act as a guide. Therefore, if
there is exclusive possession, but no intention, it is then not a
lease or a tenancy.

Question 2:
Illustrate

and explain the main

principles from the decided
cases and co-relate with the NLC
provisions

7 Main Principles

1) Leases for a Fixed Term

The maximum period for which a fixed term lease may be granted is
99 years in respect of the whole land and 30 years in respect of part
of the land. Any contract for a perpetual lease is void for
uncertainty.
A lease may be granted by way of an oral or written agreement. It
will, however only have a legal effect upon registration.

Section 221 (4), Section 222(4) National Land Code 1965

Case Law:

In the case of Siew Soon Wah v Yong Toh Hong [1973] 1 MLJ
133, it was held that there is no such thing in law as a lease in
perpetuity. Any contract for a perpetual lease is thus also void for
uncertainty.

2) Tenancy Exempt from Registration

Tenancies not exceeding three years may be granted and is

described in the National Land Code as a tenancy exempt from
registration. Such tenancies are exempted from the requirement of
registration under the Code. Accordingly, such a tenancy shall be
valid whether effected in writing or by word of mouth only.
A tenancy may be protected by way of an indorsement on the
register document of title.

Section 223, Section 213 (1) National Land Code 1965

Section 206 (2) (a), Section 206 (1) National Land Code 1965

Section 223 (2) of the National Land Code 1965

Section 213 (3) of the National Land Code 1965

Case Law:

In the case of Zakaria bin Hanafi v Ibrahim bin Hanafiah &

Ors [1999] 4 MLJ 568, the learned judge, NH Chan JCA made an
observation with respect to tenancies for a fixed term whereby
tenancies for terms not exceeding three years may be granted
under Section 223 of the National Land Code and this type of
tenancies is described in Section 213 (1) as a tenancy exempt
from registration. Such tenancies are exempted under Section
206 (2) (a) from the requirement of registration under Section
206 (1) of the Code. Accordingly, such a tenancy shall be valid
whether effected in writing or by word of mouth only.

3) Effect of Non-Registration of a Lease

The NLC does not contain any provisions for an unregistered lease. It only provides
recognition of the operation of contractual transactions by applying English
equitable principles.
Firstly, an unregistered lease agreement is considered valid and enforceable by a
decree of specific performance.
Secondly, where an agreement for a lease has been performed as when a lessee
has gone into possession, a court of equity will strain its power to decree specific
performance.
Thirdly, an entry by the lessee under an unregistered lease or a lease agreement
will create a legal relationship of a landlord and a tenant establishing a tenancy at
will. Such a tenancy will be converted upon payment of the rent reserved, into a
periodic tenancy.
Fourthly, an unregistered lease confers no legal estate in the demised premises and
does not bind a subsequent registered proprietor.
And lastly, purchaser with notice that the vendor is not in possession of the land
takes subject to the right or interest of a tenant in possession notwithstanding the
fact that the tenant may have entered under an unregistered lease.

3(a) A lease which is not registered is void as a lease but is good

and valid as an agreement for a lease and may be enforceable in
equity by a decree of specific performance.

Margaret Chua v Ho Swee Kiew & Ors [1961] MLJ 173 (Court of
Appeal, Penang)

The learned judge in this case, Barakbah J, held that the agreement was
incapable of conferring upon the purported lessees any real interest in the
land and so the lease was null and void. This is because it went against
Section 92 of the Kedah Law Enactment whereby any lease for a term
exceeding one year must be in the statutory form and must be presented for
registration together with the issue document of title. In this case, no steps
were taken by the appellant to execute a registrable lease in accordance
with the provisions of the Kedah Land Enactment.
Barakbah J however was of the opinion that although the agreement might
be a nullity as a lease, it could be a good enforceable agreement for a lease
under which the appellant as registered proprietor has undertaken the
obligation to grant.

3(b) Where an agreement for a lease has been performed as when a

lessee has gone into possession, a court of equity will strain its power
to decree specific performance.

Lin Nyuk Chan v Wong Sz Tsin [1964] MLJ 200 (Federal Court)

The appellant is the tenant of business premises belonging to the respondent.

The agreed period of tenancy is fifteen years. The issue that arose in this case
was the issue of uncertainty as the agreement includes a further provision for
subsequent variation that should entitle the respondent to evict the appellant by
way of specific performance rendering the tenancy null and void.
The court in this case held that, the term of the lease is certain, there is
apparently no uncertainty concerning the premises, the rent has been fixed and
paid and accepted. All that can be said is that it is uncertain when the provision
for variation will operate and what the actual variation amount is.
Having regard to all this, the learned judge does not regard these features as
being so fundamental as to deprive the appellant of a decree of specific
performance, especially as he has apparently observed all other provisions of the
lease and is still in possession without any attempt to evict him by the
respondents. The learned judge therefore, renders the lease valid and
enforceable.

3(c) An entry by the lessee under an unregistered lease or an agreement

for a lease will create a legal relationship of landlord and tenant
establishing a tenancy at will. Such a tenancy will be converted upon
payment of the rent reserved into a periodic tenancy whether yearly,
monthly or weekly tenancy depending on the mode of payment of the
rent.

Lee Ah Low v Cheong Lep Keen Anor [1970] 1 MLJ 7 (Federal Court)

The dispute between the parties turned on the validity of the monthly notice to quit
issued by the landlord, the successful party in the action.
The court held that a contract for a lease is not in itself a demise, but is merely an
agreement that the intending lessor shall grant a lease and that the intending lessee
shall accept the same.
Such a contract does not itself create a legal relationship of a landlord and a tenant,
but it has been long established that so soon as the tenant enters under the
agreement the relationship arises and he becomes a tenant at will and that when he
pays, or expressly agrees to pay, any part of the annual rent thereby reserved, his
tenancy at will changes into a periodic tenancy from month to month upon the terms
of the intended lease, so far as they are applicable to and not inconsistent with a
monthly tenancy. The same rule applies to entry under a void lease.

3(d) An unregistered lease confers no legal estate in the demised premises

and does not bind the subsequent registered proprietor.

Ho Ying Chye v The Cheong Huat [1965] 2 MLJ 261 (High Court, Kuala
Lumpur)

The registered owner of the land is Vui Shen Benevolent Association as of the year 1951.
In July 1958 the defendant paid a deposit in respect of rent for the said premises. From
here, it can be inferred that the said premises was assigned to the defendant. It was not
registered in the manner prescribed in Section 116 of the Land Code and was therefore
ineffectual to pass the interest in the said premises to the defendant.
On 16 December 1963, the plaintiff bought the said premises and this was duly
registered in accordance with the provision of registration under Section 110 of the Land
Code. The plaintiff then issued a notice to quit upon the defendant, but the defendant
still remained in possession.
The said agreement was not in the form of Schedule XXII and therefore could not be and
was not registered under Section 116 of the Land Code. As such it was ineffectual to vest
the interest in the said premises to the defendant under Section 96 of the Land Code.
It is therefore clear that it conferred no legal right in the said premises which remained
after the transfer to the plaintiff duly registered as the unburdened property of the
plaintiff.

3(e) A purchaser with notice that the vendor is not in possession of the land takes
subject to the right or interest of a tenant in possession notwithstanding the fact
that the tenant may have entered under an unregistered lease.

Ong Heng Hwa Realty Sdn Bhd v Teoh Chai Siok [1977] 1 MLJ 124 (High Court, Alor
Setar)

The plaintiffs, are the registered owners of the premises. The defendant is a tenant of the said
premises. On September 1970, the plaintiffs served on the defendant notice to quit but the
defendant refused.
The defendant denies that the tenancy has been terminated by such notice and avers it as bad in
law and not valid on the ground that the tenancy is for a fixed duration 0f 40 years and that he is
not in arrears of rent or in breach of any covenants contained in a written agreement.
The plaintiffs denies that the said agreement is binding on them on the ground that they are not
a party to the said agreement. The alleged agreement was executed between the defendant and
the former landlords on 28 July 1955.
The learned judge in this case held that the plaintiffs having due notice of such tenancy
agreement are bound to abide by the covenants and conditions stated therein on their taking
over of the said premises as the new landlords. It is the duty of the purchaser who has notice that
the vendor is not in possession of the property to make inquiries from the tenant in possession
and find out from him what his rights are. If he does not choose to do that then whatever title he
acquired as purchaser will be subject to the title or right of the tenant in possession.

4) Endorsement of Tenancy

A tenancy exempt from registration does not bind a subsequent

purchaser unless prior to the transaction, an endorsement has been
made on the register document of title.

Than Kok Leong v Low Kim Hai [1983] 1 MLJ 187

Case Law:

Than Kok Leong v Low Kim Hai [1983] 1 MLJ 187

The defendant in this case contends that this tenancy is a lease pursuant to an oral
agreement made between him and the former landlord who granted him an oral lease for a
period of three years to be exercised by him.
The question that arose in this case was whether the oral agreement made between the
defendant and the former landlord is binding on the plaintiff who bought the land subsequent
to the said agreement.
The court in this case held that this oral agreement for a term of three years comes under
Section 213 of the National Land Code (i.e special provisions with respect to tenancies exempt
from registration) Under Section 213 (3) it is provided that no tenancy exempt from
registration shall be binding on any person or body to whom the grantor subsequently
transfers the reversion expectant thereon, or to whom he subsequently grants any lease,
sublease, tenancy or charge.
The learned judge also referred to Section 316 (1) of the National Land Code which provides
that any person claiming to be entitled to the benefit of a tenancy exempt from registration
may apply to the Registrar for the indorsement of his claim on the registered document of title
to the land affected. This, the defendant in this case failed to do. Therefore, under Section 213
(3) of the National Land Code, this oral agreement is not binding on the plaintiff.

5) Tenancy By Estoppel

Where a lease or tenancy has been created, the lessee or tenant is

estopped from denying that the lessor or landlord their legal title or
interest to grant the lease or tenancy. A lessee or tenant is also
estopped from denying his obligations under the lease or tenancy.
Tenancy by estoppel applies only during the operation of a lease or
tenancy.

Section 116 Evidence Act 1950

Wee Tiang Yap v Chan Chan Brothers [1986] 1 MLJ 47

Singma Sawmill Co Sdn Bhd v Asian Holdings [1980]1 MLJ 21

The case of Singma Sawmill Co Sdn Bhd v Asian Holdings

[1980]1 MLJ 21 has established that estoppel operates only
where there is a tenant in possession.

6) Tenancy Coupled with Equity

A tenancy coupled with equity is where a tenant takes possession of

the land under an expectation encouraged by the landlord that he
would have a certain interest therein and expands money upon the
land on the expectation or promise, the landlord is estopped from
denying that promise or expectation.

Devi v Francis [1969] 2 MLJ 169

In the case of Devi v Francis [1969] 2 MLJ 169,

Mrs Devi lived in a portion of Franciss house permitted by his mother whilst she
was alive. Then Franciss mother passed away.
Francis now wants to kick Mrs Devi out of the portion of the land which now
belongs to him. Mrs Devi then applied for the doctrine of irrevocable license.
Court held that it could not be passed as there was not enough detriment
The courts must prove that there was:
(1) Verbal agreement with the landlord for a certain interest in the land
(2) Existence of expectation and encouragement of the landlord
(3) Reliance on the part of the lessee by taking possession of the land and
incurring expenditure to develop/improve the land
(4) The reliance is to the detriment of the lessee
If a party can prove that there was an assurance or representation intended to be
relied upon by him, in reliance thereof acted to his detriment, he is said to have a
tenancy coupled with an equity or an irrevocable license which is also an
equitable principle.

7) Termination Of Leases/Tenancies

A lease or tenancy can be terminated by way of expiry where the Registrar may cancel the
lease/sublease or in cases of tenancies, the indorsement on the register document of title is
cancelled.
A lease or tenancy may be surrendered in accordance with the requirements of the National
Land Code as provided under Section 239.
A lease or tenancy is liable to forfeiture when there is a breach of any provision or a person
is declared a bankrupt or a company going into liquidation.
Manner of forfeiture is enforced by court by re-entry or by action of the court subject to any
other written law for the time being in force.Only after the service of a written notice on the
lessee/tenant specifying the breach and to remedy the breach can a forfeiture take place.
If lessee/tenant continues occupation after expiry of notice the lessor/landlord may recover
possession by an order of the court

Section 240 (1) National Land Code 1965

Section 240 (2) National Land Code 1965

Section 234 (1) (a) (b) (c) National Land Code 1965

Section 234 (2) National Land Code 1965

Section 235 National Land Code 1965

Section 7 Specific Relief Act 1950

Expiry

Section 240 (1) National Land Code

The Registrar may cancel the registration of the lease/ sub lease
Section 240 (2) National Land Code
The tenancy indorsed on the RDT may be cancelled

Surrender

A lease or tenancy may be surrendered before its term is up to the lessor or landlord.
The surrender must be in accordance with the requirements of the National Land Code as
provided under Section 239.
Section 239(2) National Land Code
Lease/sub lease can be surrendered by executing FORM 15C
Section 239 (3) National Land Code
For tenancy exempt from registration, surrender can be done by word of mouth or any written
agreement
Section 239 (4) National Land Code
Surrender must obtain consent of the charge
Section 239 (5) National Land Code
Any sub lease or tenancy granted from the lease will not be affected

Forfeiture

Section 234 (1) National Land Code

Every lease/sub lease/tenancy is liable to forfeiture when; (a-c)
o

Breach of any provision

Adjudicated a bankrupt

A company going into liquidation

Section 234 (2) National Land Code

Manner of forfeiture is enforced by court by re entry or by action of the court subject to
any other written law for the time being in force
Section 235 National Land Code
Only after the service of a written notice on the lessee/tenant specifying the breach and
to remedy the breach can a forfeiture take place

Service of Valid Notice to Quit

A valid notice to quit must be served sufficiently on the lessee/tenant.

In the Federal Court case of Muniandy a/l Thamba Kaundan & Anor v D & C Bank
Bhd & Anor [1996] 1 MLJ 374
The notice to quit takes effect from the date it is served on the party concerned and not
the date of the notice or the day it was sent

Recovering Possession of Land

Section 7 Specific Relief Act

If lessee/tenant continues occupation after expiry of notice the
lessor/landlord may recover possession by an order of the court

END