Lease Meaning and Equitable and Legal Lease

The Post contains Lease Meaning.

Lease Meaning

There are sometimes when the owners of realty can decide to rent it out to a person who shall in return be indebted to pay him a certain sum. The renting shall be for a certain period. This entails that he has agreed to give out certain rights that he has in the property to another party during his lifetime or throughout a specified fixed period of time. However, the right that is given out in this contractual agreement is usually subordinate to the right of the grantor. Lease is sometimes referred to as demise while the premises that are leased can also be termed premise demised.

This may give rise to a lease. A lease is a contractual agreement between two parties, wherein one of the parties agrees to give out part of the right that he has in a property to another while he retains part of the rights. Many authors maintain that a lease is the demise of land by the lessor to another for interest less than a freehold. The lease agreement usually involves two parties known as the Lessor and Lessee.

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The Lessor is the party that granted the right and he can also be called Landlord while the Lessee is the party to whom the right is granted and he is otherwise known as the Tenant.

The lessor after granting the right shall reserve some rights known as the reversion. These are the rights that he shall exert to protect and preserve his property from irreparable damages. This is usually termed reversionary interest.

Legal and Equitable Leases

A lease may be a legal estate or equitable interest in land depending on its mode of creation. The determinant factor in knowing whether a lease creates legal estate or equitable interest is the mode of creation of such a lease agreement. Certain forms may be required for the creation of a lease at law but equity demands no form in the creation of a lease of any duration.

According to Adewale Taiwo in his Text, he lucidly stated that for a lease to be a legal lease it must be granted by deed. The exceptions to this are leases of three years or less, taking effect in possession at the best rent reasonably obtainable without taking a fine (premium) will be a valid legal lease however granted, even if it is granted merely by word of mouth. So a legal lease can be granted by deed or orally depending on the duration.

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Equity has no formality for creating a lease, instead, leases are created in equity through oral lease coupled with part performance and void lease for want of Deed.

In conclusion, a leasehold is an inferior interest holding in real property (Realty). The interest transferred by the grantor to the grantee is usually subject to the reversionary interest of the grantor and it is usually either throughout the lifespan of the Lessor or during a specified fixed period.

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