THE LEGAL EFFECT OF “TERM CERTAIN” IN
AN AGREEMENT[1]
The
phrase ‘Term Certain’ is used mostly
in tenancy agreements to stipulate the time frame at which a contractual
tenancy lapse.
A
tenancy for a fixed term or term certain is that lease with definite beginning
and end (e.g. for 2 years or 10 years certain) and may be created for any
period of time short of perpetuity. The
tenancy may be created to take effect immediately, from the past or future date
or on the occurrence of a future event. Where it is created to take effect at a
future date, or on the occurrence of a future event, it shall not be valid
unless created by a deed.[2]
Upon
the lapse of the time certain i.e. time fixed for the tenancy to run out, the
relationship of landlord and tenant automatically terminates and the landlord,
if he so wish, may take possession through the due process of law after serving
on the tenant Notice of Owners intention to recover possession.
Where
upon the expiration of the maximum period fixed under the tenancy, a new
tenancy is not created by the parties, the tenant holds over the property and
becomes a tenant at will or a tenant at
sufferance or a statutory tenant depending on the applicable law. But where
the tenant holding over pays rent at the rate reserved under expired tenancy,
he shall be deemed to be a tenant from year to year on the same terms as the
expired tenancy, provided that these terms are applicable to and not
inconsistent with a tenancy from year to year.
The
courts have helped to throw judicial light on the legal effect of term certain
in tenancy agreements, as it envisages a contractual tenancy. We shall now be
looking at the meaning of the following terms and their effect in a tenancy
agreement in the light of decided cases.
·
Tenant
The
definition of a tenant is very wide, as it includes all persons who occupy
premises lawfully. Whether a person pays regular rent, subsidized rent or
indeed no rent is immaterial. The qualification for becoming a tenant under the
law is lawful occupation. Hence, when the initial occupation of the premises is
lawful, he occupier, even if holding over becomes a protected tenant qua the landlord[3]
·
Tenancy
There
are two classes of tenancy: Contractual Tenancy
and Statutory Tenancy[4]
(a)Contractual
Tenant
A
tenant who enters a premise by reason of a contract with the landlord is a
contractual tenant. Such a tenant holds an estate which is subject to the terms
and conditions of the grant. Once that tenancy comes to an end and by efflux
ion of time or otherwise and the tenant holds over without the will or
agreement of the landlord, he becomes a tenant
at sufferance. (This is strictly
common law concept).[5]
A
Tenant at sufferance is one which the original grant by the landlord to the
tenant has expired, usually by effluxion of time, but the tenant holds over the
premises. In such a case, the tenants right to occupation of the premises to
which he had come in upon a lawful title by grant is at an end but, although he
has no more title as such, he continues in possession of the land or premises
without any further grant or agreement by the landlord on whom the right to the
reversion resides.
(b)Statutory
Tenant
A
statutory tenant is an occupier who when his contractual tenancy expires, holds
over and continues in possession by virtue of special statutory provisions. He
is an anomalous legal entity who holds land of another contrary to the will of
that other
person
who strongly desires to turn him out. Such a person will not ordinarily be
described as a tenant. This type of tenancy is created where a contractual
tenant holds over at the end of his contractual tenancy, he becomes a statutory
tenant even if he does not pay rent, does not pay regular rent or pays only a subsidized
rent.
Although
a statutory tenant has no estate in the premises he occupies, his status is no
less than that of a contractual tenant as far as his right of possession is
concerned. This is so because the tenancy of a statutory tenant derives its right
and authority from the relevant statute such as the Rent Control and Recovery of Residence Premises Law of Lagos State 1997
(with relevant 2003, 2004 and 2007 amendments)
The Legal Effect
The
use of ‘Term Certain’ in an agreement is to the effect that upon the expiration
of the of the time stipulated and upon failure to renew such tenancy, the
common law rule is that the occupier is at the mercies of the owner, and can be
thrown out whenever the owner pleases even without notice to quit or intention
to recover possession. Such an occupier is a tenant at sufferance.
However
there are exceptions to this seemingly rigid common law rule. Examples of such exceptions are transactions
governed by statute. For example landlord and tenant agreement, rents and
recovery of possession agreements, lease etc.
Premises
can be recovered from a statutory tenant only in cases where he decides to give
up possession voluntarily, or by court order which can only be valid wherein
due and adequate notice to quit and for recovery of possession had been given.
The
court in the case of CHAKA V. MESSRS
AEROBELL (Nig.) LTD (2012) 12 NWLR 303 expatiated on the period of notice
required to determine tenancy; “
(a) In the case of a tenancy at will or a weekly
tenancy, a week’s notice
(b) In the case of a monthly tenancy, a
month’s notice
(c) In the case of a quarterly tenancy, a
quarter’s notice; and
(d) In
the case of a yearly tenancy, half a year notice.”
In
conclusion, relying on the above discuss, it is evident that the law protects
the tenant but does not also preclude a landlord from exercising his
reversionary right ones the due process of law has been followed. Provisions are however made for claim of RENTS
and MESNE
PROFIT for possession by the owner against the occupier who holds over
at the end of the contractual tenancy.
[1]
BY: MABAWONKU OLUSEGUN OLANREWAJU (LL.B)
HONS
[2]
A.O SMITH (Practical Approach To Law of Real Property in Nigeria) 2nd
Edition, Pg. 280
[3]
Oduye v, Nigeria Airways Ltd (1987) NWLR (Pt. 55) 126 at 147; Enigbokan v.
Akinosho (1957) SCNLR 9 at 11-12
[4] Sule
v. Nigerian Cotton Board (1985) 1 NWLR Pt. 5 at 17
[5]
African Petroleum v. Owodunni (1991) 8 NWLR (pt 210) 391 at 413https://www.linkedin.com/pulse/article/new?trk=hp-share-poncho-pencil
