Across Nigeria, the UK, the USA, and many other jurisdictions, disputes between landlords and occupiers often arise from one fundamental misunderstanding:
Is the occupier a tenant or a lessee?
Many people use lease and tenancy interchangeably. In law, however, they are not the same. The distinction determines:
- How long an occupier can stay
- How rent is reviewed
- Whether possession can be recovered
- What notice is required
- Whether the interest is registrable
- Whether the right can be assigned or mortgaged
In our experience advising property owners, investors, and occupiers, we have seen fortunes lost and judgments entered simply because parties failed to understand the legal nature of their relationship.
What Is a Lease?
A lease is a grant of an interest in land for a fixed and definite term, usually long-term, in consideration of rent or premium.
Legally, a lease:
- Creates a proprietary interest in land
- Is usually for years, specifically 3 years and above (e.g., 5, 10, 25, 99 years)
- Is often registrable
- Can be assigned, sublet, or mortgaged
- Binds third parties once perfected
In Street v. Mountford [1985] AC 809, the House of Lords held that where exclusive possession is granted for a term at a rent, a lease exists regardless of the label.
In Nigeria, a lease is commonly used for:
- Commercial properties
- Long-term residential interests
- Industrial and agricultural land
- Institutional use
What Is a Tenancy?
A tenancy is generally a short-term occupation of property, usually periodic (weekly, monthly, yearly), governed primarily by landlord and tenant law.
A tenancy:
- Creates a personal right, not always a registrable interest
- Is often periodic (month-to-month, year-to-year)
- Is terminated by statutory or contractual notice
- Is primarily regulated by rent control and tenancy laws
- Is common in residential housing
In Nigeria, tenancies are governed by:
- Tenancy Laws of various States
- Recovery of Premises Acts
- Rent Control Laws
In African Petroleum v. Owodunni (1991) 8 NWLR (Pt. 210) 391, the Supreme Court emphasized that tenancy creates rights of occupation subject to statutory control.
Core Legal Differences Between Lease and Tenancy
| Feature | Lease | Tenancy |
|---|---|---|
| Duration | Fixed long term (3 years or more) | Periodic or short-term (less than 3 years) |
| Nature of Right | Proprietary interest | Personal right |
| Registrability | Often registrable | Usually not registrable |
| Transferability | Assignable/sublettable | Limited or prohibited |
| Termination | By expiry of term | By statutory notice |
| Typical Use | Commercial/long-term | Residential/short-term |
| Legal Control | Contract & land law | Statute & rent laws |
1. Duration and Certainty
A lease must have certainty of term.
In Lace v. Chantler [1944] KB 368, a lease “for the duration of the war” was held void for uncertainty.
Tenancy, however, may be:
- Weekly
- Monthly
- Yearly
- At will
It continues until proper notice is given.
2. Nature of Legal Interest
A lease confers a legal estate in land once perfected.
A tenancy often confers only a right of occupation.
This is why:
- A lessee can mortgage his interest
- A tenant generally cannot
In Savannah Bank v. Ajilo (1989) 1 NWLR (Pt. 97) 305, the Supreme Court emphasized that interests in land must be lawfully created and perfected.
3. Control by Statute
Tenancies are heavily regulated:
- Rent caps
- Notice periods
- Eviction procedures
- Tenant protection
Leases, especially commercial ones, are more contract-driven.
Courts respect the sanctity of lease agreements, subject to public policy.
4. Termination
A lease ends:
- By expiration of term
- By forfeiture
- By surrender
- By merger
A tenancy ends:
- By statutory notice
- By court order
- By agreement
- By abandonment
In Pan Asian African Co. Ltd v. National Insurance Corp (1982) 9 SC 1, the court held that proper notice is a condition precedent for recovery of premises.
Practical Examples
Example 1 – Residential Occupier
A family rents a flat monthly. They are tenants.
Their landlord must give statutory notice before eviction.
Example 2 – Commercial Occupier
A company takes a warehouse for 10 years. They are lessees.
Their rights flow primarily from the lease deed.
Why the Distinction Matters
Understanding whether a relationship is a lease or tenancy determines:
- Whether rent can be increased freely
- Whether eviction requires court process
- Whether interest can be sold
- Whether property can be mortgaged
- Whether registration is mandatory
Misclassification leads to:
- Illegal evictions
- Invalid notices
- Lost court cases
- Financial exposure
Global Perspective
- UK: Distinction shaped by Street v. Mountford
- USA: Leasehold estates vs periodic tenancies
- Nigeria: Land Use Act + Tenancy Laws
- Canada & Australia: Similar leasehold doctrines
The principle of exclusive possession for a term is universal.
Frequently Asked Questions (FAQs)
1. Can a tenancy become a lease?
Yes. Long-term exclusive possession with fixed term can convert to a lease.
2. Is every rent agreement a tenancy?
No. Duration and intention determine classification.
3. Can a lease be oral?
Short leases may be oral, but long leases require writing and registration.
4. Does payment of yearly rent make it a lease?
Not necessarily. The term and rights matter more than rent cycle.
5. Which offers more security?
A lease offers stronger proprietary protection.
Authorities & References
- Street v. Mountford [1985] AC 809
- Lace v. Chantler [1944] KB 368
- African Petroleum v. Owodunni (1991) 8 NWLR (Pt. 210) 391
- Pan Asian African Co. Ltd v. NIC (1982) 9 SC 1
- Megarry & Wade, The Law of Real Property
- Obilade, The Nigerian Legal System
- Gray & Gray, Elements of Land Law
Conclusion
Lease and tenancy are not mere labels—they are legal identities.
A lease builds a proprietary estate.
A tenancy creates a regulated occupation.
Every dispute over rent, eviction, or possession begins with this question:
What exactly is the nature of the occupier’s right?
Those who answer it correctly avoid litigation.
Those who do not, fund it.
Leave a Reply