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    Thursday, 26 March 2015

    Rights and liabilities lessor and lessee

    1. Introduction
    It is settled principle that contract create some rights and liabilities for both parties. As lease is made through some contract, therefore it also creates some rights and liabilities for both lessor and lessee. A lease is a transfer of a right to enjoy the property of lessor made for a certain time under which the lessee is put in possession of the property. The right of ownership or title is not passed on the transferee. There is only transfer of right of enjoyment in lease. In absence of contract or local usage to contrary, lessor and lessee of immoveable property possess some rights against each other and are subject to some liabilities against each other.

    2. Relevant Provisions

    Section 105, 107, 108 of the transfer of property act 1882.

    3. Meaning of lease

    A lease is an agreement under which owner gives up possession and use of his property for valuable consideration and for definite term and at end of term owner has absolute right to retake, control and use property. (Black’s Law Dictionary).

    4. Definition of lease: section 105

    A lease of immovable property is transfer of right to enjoy such property, made for a certain time express or implied, or in perpetuity, in consideration for a price paid or promised, or of money a share of crops, service or any other thing of value, to be rendered periodically, or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

    (i) Definition of Transferor: Section 105
    The transferor is called the lessor.

    (ii) Transferee: Section 105
    The transferee is called lessee.

    (iii) Definition of Premium: Section 105
    The price is called the premium
    (iv) The money, share service or other thing to be so rendered is called the rent.

    5. Rights and Liabilities of Lessor

    Following are rights and liabilities of lessor

    (i) Material Defect in Immoveable Property
    Lessor is bound to disclose to lessee any material defect in leased-property especially when lessor is and lessee is not aware of such defect.

    (ii) Delivery of Possession of Immoveable property
    On lessee’s request, lessor is under obligation to deliver lessee possession of leased-property.

    (iii) No interruption into possession of Immoveable property
    If lessee pays rent according to lease, and performs those contracts, which are binding into lessee’s possession of leased-property during lease.

    (iv) Repairing of leased-property
    Lessor is bound to make arrangements to save leased-property from damage during lease. Even it is duty of lessor to repair leased-property particularly when leased-property is damaged during lease.

    (v) Rights of heirs of deceased lessee
    If lessee dies during lease and his rights of lease are transferred to his heirs, lessor is bound to protect such rights and perform his duties regarding heirs of deceased lessee.

    6. Rights and Liabilities of Lessee

    Following are rights and liabilities of lessee;

    (i) Accession to Leased property
    If any accession is made to leased-property during continuation of lease and if such accession is according to that law, which is in force and which relates to alluvion, lessee is entitled to enjoy such accession.

    (ii) Expenses for Repairing of Leased-property
    Within reasonable time after notice, if lessor neglects to make any repairs, which he is bound to make to leased-property, lessee can make such repairs himself, and can deduct expense of a such repairs with interest from rent or can recover if from lessor.

    (iii) Destruction or unfitness of lease-property
    If fire, tempest, flood, violence of any army violence of a mob or violence of other irresistible force causes complete destruction or permanent unfitness to any material part of leased-property, lease becomes void at option of lessee. However, if act or default of lessee causes such injury, he is not entitled to make lease void.

    (iv) Taking of things attached to earth
    Lessee can take all things, which he has attached to earth, by leaving leased-property in that state in which he has received it.

    (v) Disclosure of Fact
    Lessee is bound to disclose to lessor any fact, when such fact is about nature or extent of that interest, which lessee is about to take, and when such fact increases value of such interest.

    (vi) Payment of Premium or Rent
    At proper time and palace, lessee is to pay or tender premium or rent to lessor or his agent.

    (vii) Notice of Defect
    Lessee should give lessor notice of any defect regarding condition of leased-property. And when such defect has been caused by any act or default of lessee, his servants or agents, he is bond to make it good after such notice.

    (viii) Entry into leased-property
    At all reasonable times during term of lease, lessee should allow lessor and his agents enter upon leased-property.

    (ix) Notice
    Lessee should give lessor a notice about proceeding for recovery of leased-property, about enchroachment against lessor’s rights in leased-property or about interference with lessor’s rights in leased-property.

    (x) Use of leased-property
    Lessee should use leased-property and its products as a person of ordinary prudence. In short, lessee should not commit any act, which can be destructive or injurious to leased-property.

    Conclusion

    I say, I include that liabilities of one party to contract create rights for another party to contract. Some is the case as far as rights of lessor are concerned. The reality is that rights of lessor have not been described in Transfer of Property Act. In fact, it are liabilities of lessee, which determines rights of lessor.
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    Item Reviewed: Rights and liabilities lessor and lessee Rating: 5 Reviewed By: Usman Ali
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