TENANCY EXEMPT FROM REGISTRATION (TXR) SECTION 213(1)
Tenancy is a letting of land for a period not exceeding three (3) years. It is not a registrable interest. It is also known as “tenancy exemptfrom registration”, meaning it is not capable of being or required to be registered. May be granted in weekly, monthly or yearly basis subject to a maximum period of three (3) years. May be created in writing or orally. A person who lets the land is called a landlord while the person who accepts the tenancy is called the tenant
Types of tenancya. Periodic tenancy - maximum period of tenancy is 3years. - it is granted from week to week, month to month basis - continues definitely
..continueb. Tenancy at will - tenant holds over the tenancy after expiry of the tenancy with the permission of landlord. - It will converted to periodic tenancy when tenant pays and landlord accepted the rent
…continuec. Tenancy at sufferance where tenant holds over the tenancy after expiry of the tenancy without the permission of landlord.
….continued. Tenancy by estoppels - landlord has no title to or interest in the land but grant tenancy over the same to tenant - tenant is estopped during tenancy period to deny that landlord has no title to the land - Tenant is estopped from denying his obligations under the tenancy
…continuee. Tenancy coupled with Equity - where tenant takes possession of the land under the expectation or encouraged by the landlord that tenant would have certain interest in the land. - tenant expends money upon the land on the faith of the expectation - The landlord is estopped from denying that expectation
Endorsement Since registration is TXR is not required under the NLC, how does a tenant protect his interest in the land against future dealings?
Sec. 213(3) This section, inter alia reads as follows:- No TXR shall be binding on any person or body to whom the landlord subsequently transfers the land to: Unless endorsement has been made on the register document of title; Endorsement was made prior to the transfer.
Therefore, a tenancy exempt from registration may be protected:- By way of an endorsement on the RDT; By the tenant; Before the future sale is entered into by the landlord; Once endorsement is perfected, tenancy binds any subsequent purchaser of the land.
What if the tenant fails to endorse histenancy against the title? The tenant’s interest over the tenancy will not be protected. As a consequence, if the landlord decided to sell the house, the landlord may just serve notice to vacate to the tenant as and when he likes. Once notice is served, tenant must vacate the land.
Than Kok Leong v. Low Kim Hai (1983)1 MLJ 187 A sold land to B. at the time of the purchase, C was the tenant of the premises. B served C a notice to quit but was ignored by C. since C failed to endorse his tenancy, his interest as a tenant was not binding to B and he has to vacate the premises.
Hotel Ambassador Failure to endorse the tenancy, its interest as a tenant was not binding on the subsequent purchaser. Facts: A, a lessee of a building carrying on a business of a hotel B Bank obtained an order for sale of the land and building C purchased the land and building and asked vacant possession from A A failed to endorse tenancy, they have to surrender possession to C
How is endorsement made? Sec. 316 – application for endorsement Apply to the registrar for endorsement on RDT No statutory form available but application can be done in writing If the tenancy relates only to a certain part of the land, the tenant must attach a plan and description of the tenancy. If the land is subject to a charge created by the landlord, a consent letter from the chargee bank shall first be obtained.
Sec. 317 - procedure On receiving the application, the Registrar shall:- Note the time it was received; Make a note on the Presentation Book of the time received; Endorsement with “Exempt tenancy claimed” made on RDT; Reject if there has already been a registration of a transfer of the said land (proprietor charges) Reject if no consent of chargee bank obtained, if relevant; Sign and seal endorsement.
… continue If application is rejected, the registrar shall return the application and note the rejection in the Presentation Book.
Cancelled of endorsement – sec. 318 The registrar may cancel any endorsement: - By court order - Upon expiry of the tenancy. The Registrar shall endorse against the cancelled endorsement, note of the date of cancellation and the reason therefore.