The document discusses the definition and key characteristics of leases and tenancies under Malaysian law. It defines a lease as a conveyance granting an interest in land less than a freehold from a lessor to a lessee. Leases must be for a specific duration exceeding 3 years, while tenancies can be for up to 3 years. Registered leases create greater legal rights than unregistered leases or tenancy agreements exempt from registration.

1. Areej Torla
areej@iium.edu.my
DEALINGS –PART 2:
LEASES & TENANCIES

2. Definition: “Lease”
 A conveyance by which the proprietor of land
(lessor) grants to another person (lessee) an
interest in the land less than a freehold and
less than that to which the lessor himself is
entitled.
LESSOR
LEASE
LESSEE

3.  Section 5 NLC:
 “Lease”: registered lease or sublease of an
alienated land
 Therefore, excludes a lease agreement an
equitable lease and a TER.

4. Characteristics of a lease
1. Lessee enjoys a right of exclusive possession
2. Duration is specific and certain
3. Lessor has an intention to create a lease and
not a license
 Intention can be construed from written agreement
or by conduct
 Note: distinguish between a lease and a mere
license.

5. Woo Yew Chee V Yong Yong Hoo
[1979]
 There was a written agreement allowing the
respondent to occupy the premises for 10
years with a monthly rent of $170.
 Respondent was to share with the appellant
landlord the kitchen, bathroom and toilet. The
landlord held the key.
 Court: the agreement was in the nature of a
lease and not a licence.

6.  Court further held:
 The ultimate test is “the nature and quality of
the occupancy:
 Whether it was intended that the occupier
should have a stake in the premises sublet, or
 Whether he should have only a personal
privilege”
 --Lord Denning in Marchant v Charters
[1977]

7.  In other words, the court would look at the
intention of the parties as evidenced in the
lease agreement.

8. Effect of uncertain duration
 Effect of a tenancy “for as long as the tenant likes”?
 Before NLC:
 Karuppan Chetty v Suan Thiam [1916] 1 FMSLR 300
  considered as a void agreement




After NLC:
Siew Soon Wah v Yong Tong Hong [1971]
“The tenancy shall be permanent”
The agreement is good as a lease agreement. Section
206(3)

9. Power to grant lease Section 221
 What can be leased?
 The whole of alienated land
 Part of alienated land
 Who can create a lease?
 The lessor, lessee or sub lessee

10. Duration of lease
 Section 221
 Must exceed three years
 Maximum term:
 99 years (for whole of land)
 30 years (for part of land)
 If does not exceed 3 years
  Tenancy Exempt from Registration (TER)

11. Effect of unregistered lease
 Section 5 NLC:
 “Lease”: registered lease or sublease of an
alienated land
 Margaret Chua [1961] MLJ 173
 Although the agreement for a lease for 25
years was void for lack of registration, but it
was valid as an agreement for a lease
enforceable in equity.

12. Differences between leases &
TERs
Lease
 Section 221, 222
 Duration: exceeding 3 years
 Proprietor, lessee, sub
lessee can create lease.
 Form 15A (lease) or Form
15B (sublease), and attach a
plan and description (if
lease of part of land)
Tenancy
 Section 223
 Duration: not exceeding 3
years
 Proprietor, lessee, sub-lessee,
tenant can create TER
 Created by word of mouth or
written instrument in whatever
form.
 Exempted from registration
but may make endorsement to
protect the TER Section
213(3).

13. Power to grant tenancies S 223
 Who can grant a tenancy?
 Proprietor
 Lessee or sublessee
 Tenant
 How is it granted?
 By word of mouth
 By a written instrument in any form whatsoever.

14. Calculation of terms S 224
 “If the term is for a fixed period, no account
shall be taken of the fact that it is capable of
renewal in pursuance of an option…”
 Luggage Distributors Sdn Bhd v Tan Hor
Heng
 Court of Appeal: S 224(b) prohibits any option
for renewal from being taken into account
when determining the length of a tenancy for a
fixed period.

15. Tenancy exempt from registration
S 213
 TER means any tenancy or sub-tenancy not
exceeding 3 years.
 Not capable of registration. S 213(2)(b)
 No TER shall be binding on a subsequent
purchaser unless prior to the date on which the
dealing takes effect, the tenancy has become
protected by an endorsement on the RDT.
S 213(3)

16. Applcation for Endorsement
 Section 316:
 “Any person claiming to be entitled to a TER
may, for the purpose of protecting his rights
thereunder against subsequent dealings, as
mentioned in S 213, apply…for the endorsement
of his claim on the RDT…
 Than Kok Leong v Low Kim Hai
 A TER that had not been endorsed on the register
was not binding on a subsequent purchaser.

17. Tenancy coupled with equity
 Encouragement, expectation, expenditure
 Landlord is estopped from terminating the
tenancy until he has satisfied the tenant‟s
equity.
 How?
 Give more time for the tenant to be in
possession
 Pay compensation

18. Mok Deng Chee v Yap See Hoi
 Federal Court assumed that the original house
had been built with the encouragement and
approval of the previous landowner and the
expenditure involved.
 There was a tenancy coupled with equity.

19. Example of a question
 Borhan is the registered proprietor of a
commercial building in Setapak. In 2009, he
leased out the second level of the building to
Mesra Sdn. Bhd. („Mesra‟) for 5 years. They
signed a lease agreement and the lease is
registered. Borhan also rents out an office on the
3rd level of the building to Haris for 2 years with
an option to renew for another year.
 Advise Borhan on the difference, if any, between
his dealing with Mesra and his dealing with Haris.
(5 marks)