The development of lease contract went through various stages. It started from being a nominal part in the property law later become an integral part of contract law and finally has developed into a distinct part of contract law.
This development bears some correlation with the economic development of the state. The more economically developed the state the more developed the lease and contract laws they will have.
Lease agreement can be categorized according to various criteria: residential lease/commercial lease; tenancy for year/tenancy for year/tenancy at will; tenancy of sufferance. Further, The duties on the parties while entering into a lease contract are also laid down.
Our existing laws, the Muluki Ain, relating to lease is more an ancient and outdated law. Muluki Ain does not cover issues of modern time.
The drafters of the Bill could have clubbed present Chapter with Chapter 9. Both chapters relate to leasing of property and it would be logical to club them together. The Bill must be applauded for incorporating modern principles such as ‘peaceful enjoyment of property’ and ‘delivery of possession’ which are progress steps. However, definition of the leasable property/item is not clearly defined.
The rights and duties of the lessor and lessee have been prescribed. However, it is strange that the responsibility has been cast upon the lessee to check for the fitment of the property in question. Is it not the responsibility of the lessor to disclose all material fact regarding the usability of the property?. A lessor has to disclose all defects in the property.
Further, the Bill tries to cover aspects relating to sub-lease but fails to address the assignment aspects of the lease. Thus, in general, the Bill is good in concept but the provisions of the Bills need some refinement.
The Bill must clarify the liability of lessor and lessee to pay tax. It is silent as to who has to pay the house tax: whether the lessor who is the owner of the property or the lessee who is enjoying the property?.
The Bill should also incorporate provisions regarding insurance of the property and the duty of which part to bear the cost of insurance. Further, it must contain a phrase wherein it categorically states that the agreement to enter into a lease contract has to be for lawful purpose with bonafide intention. Even though there is a non obstante clause there will be conflicts between the present Bill and existing Contract Act.
The Bill mandates compulsory registration of lease agreement but does not specifically state the authority or institution where the lease agreement has to be registered. The concerned authority or institute where the lease agreement has to be registered needs to be explicitly mentioned in the Bill.
The current effort of bringing everything in one single Act should be avoided in some cases. Contract Act which is a special Act dealing with agreements between party should be amended to insert the provisions contemplated in the present Bill. This will avoid conflict between statutes. Further, the period of the contract must be open for the parties to decide. Deciding the period of contract for the parties is not in the legislative domain and parties must be allowed to decide for themselves.
