Rights and Liabilities of Lessor and Lessee | Transfer of Property Act, 1882

Section 108, subsection (a) to (q), of the Act mentions the Rights and Liabilities of the Lessor and Lessee. It is pertinent to note that s. 108 applies only in the absence of a contract or local custom usage to its contrary. Read here: Lease: Introduction, Concept, Essentials and Conditional Leases

Rights and Liabilities of Lessor and Lessee

I. Liabilities of Lessor[2]

• Duty to Disclosure [Clause (a)]

Provides that the lessor is obliged to report any material defect in the property to the Lessee concerning its intended usage of which the lessor is conscious but which the Lessee does not know. The defects could be visible and latent. The lessor is required to expose latent defects because ordinary attention cannot discover such defects. The obligation to report is especially important where there are defects which affect the right of enjoyment of e property for the Lessee.

• To Give Possession [Clause (b)]

The lessor is obliged to place the Lessee in possession of the land upon the request of the Lessee. Unless he grants the lessee possession, he will not be able to recover the rent or execute Lessee’s obligations under the lease. However, the lessor’s duty to give possession emerges only when the Lessee requests.

• The Directive for Quiet Enjoyment [Clause (c)]

The Clause specifies that if the Lessee pays rent reserved by the lease and executes the contract binding on him, the Lessee may hold the property without interruption within the period specified by the lease.

II. Rights of Lessor[3]

• Right to Accretions [Clause (d)]

If any accession or addition to the property is rendered by way of a contract during the duration of a contract, then that accession or addition shall be considered to be included in the original lease. The addition could be natural or on the Lessee’s cost. The Lessee may, however, have no title to such accretion and the Lessee should return the same at the termination of the lease or after the due duration of the contract.

III. Rights of Lessee[4]

1. Right to Avoid Lease [Clause(e)]

When the property/object of the lease is damaged, the Lessee may terminate the lease at his discretion if he is not to be blamed for such loss. Where the entire rent has been paid in advance, and the property is lost before the lease period ends, the Lessee shall have the right to recover the proportionate part of the rent previously deposited.

2. Right to Charge for Repair [Clause (f)]

This provision provides that if the lessor fails to make any repairs that he is bound to make after notice within a reasonable period, the tenant may make the repair himself and deduct the cost of such repairs with interest from the rent or otherwise reclaim it all from the property owner.

3. Right to Make Payments [Clause (g)]

This provision provides that if the lessor fails to make any payment which he is obliged to make and which is recoverable from the Lessee or against the property if he does not cause it, the Lessee can make such payment himself and deduct it from the rent with interest or otherwise reclaim it from the leaseholder.

4. Right to remove fixtures [Clause (h)]

The Lessee may remove all things that he has attached to the land, even after the lease has been decided, at any time while he owns the leased property, but not afterwards. However, the property must be returned in the state in which he acquired it.

5. Right to have the benefit of Crops [Clause (i)]

Each Lessee is entitled to everything grown, cultivated or harvested by him to his/her benefit.

6. Right to Assign his Interest [Clause (j)]

This provision empowers the Lessee to pass the entire or any part of his interest in the land, entirely or by way of mortgage or sub-lease. Similarly, the transferor or assignor can further transfer his interest. Remember that all these provisions are the exemption of a contract or local custom.

IV. Liabilities of Lessee[5]

1. Duty to disclose facts material to increase the value of the property [Clause (k)]

Under this Clause, the Lessee is obliged to report any defect to the lessor of which he is aware, but the lessor is not aware and which significantly increases the value of that interest. Where the Lessee refuses to report the reality, and the lessor thus loses, he will sue for compensation.

2. Duty to pay rent [Clause(l)]

Lessee is under a duty or obligation to pay in due time or place the payment or rental to the lessor or his agent. The responsibility to pay rent occurs after the Lessee has been put in charge of everything. Where the Lessee refuses to pay the rent and is in arrears, the lessor is entitled to file a claim for rent arrears or to commence the eviction on the ground of unpaid rent.

3. Duty to maintain the property [Clause (m)]

The Lessee is obliged to hold the property in as good condition as it was when he was put in charge until the lease is terminated. He is obliged to allow the lessor and his agents to access property and examine its conditions at all appropriate times.

4. Duty to Give Notice [Clause (n)]

When the Lessee is aware that another person has launched proceedings to reclaim whole or part of the land, or has infringed on it or interfered with the lessor’s right, he must bring such a fact to lessor’s awareness.

5. Duty to use the property Reasonably [Clause (o)]

This provision specifies that if the property were his own, the Lessee would use the property and its goods as a person of ordinary prudence. He must not cut down the trees or sell the wood, or tear down or destroy the house.

6. Duty not to erect permanent Structure [Clause (p)]

A lessee shall have no duty to erect any permanent structure on the land, except for agricultural purposes or without the lessor’s permission. Within this provision, the prohibition is against creating a permanent structure only.

6. Duty to restore possession [Clause (q)]

This provision provides that the Lessee is obliged to place the property back in the hands of the lessor upon the termination of a contract. If the occupant does not vacate the property, he is liable to pay damages as well as mesne profits[6] to the lessor.

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Source: Rights and Liabilities of Lessor and Lessee

Darashaw J Vakil, Commentaries on the Transfer of Property Act; 5^th, Vol. 1, (2017).

[1] s. 105, Transfer of Property Act, 1882.

[2] s. 108, Transfer of Property Act, 1882.

[3] Ibid.

[4] Ibid, at 2.

[5] Ibid.

[6] The income of an estate that the landlord collects from a tenant while in wrongful possession.

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