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modes of creation of lease

The Transfer of Property Act, 1882 outlines various modes for creating leases, including express agreements, implied agreements, operation of law, presumption, and estoppel. Key provisions require leases longer than one year to be registered, while shorter leases can be created orally or through written instruments. Essential elements for a valid lease include competent parties, a definite subject matter, duration, consideration, and possession.

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590 views

modes of creation of lease

The Transfer of Property Act, 1882 outlines various modes for creating leases, including express agreements, implied agreements, operation of law, presumption, and estoppel. Key provisions require leases longer than one year to be registered, while shorter leases can be created orally or through written instruments. Essential elements for a valid lease include competent parties, a definite subject matter, duration, consideration, and possession.

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kanwaruday740
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Under the Transfer of Property Act, 1882 (TPA), leases can be

created in the following modes, as outlined in Section


107 and supported by other general principles of law. The
creation of a lease involves establishing a legal relationship
between the lessor and the lessee, and the method of
creation varies depending on the duration and terms of the
lease.

Modes of Creation of Lease Under TPA


1. By Express Agreement
A lease can be created through a clear and express
agreement between the lessor and lessee. The agreement
must specify the following:
 Duration of the lease.
 Terms and conditions.
 Amount and mode of payment of rent or other
consideration.
Requirements:
 For leases exceeding one year or from year to year:
o Registered Instrument: The lease must be executed
by both lessor and lessee and registered under
the Registration Act, 1908.
 For leases of one year or less:
o Can be created by a registered instrument, or
o By oral agreement, provided possession of the
property is delivered to the lessee.

2. By Implication (Implied Agreement)


Leases can also arise through implied agreements, inferred
from the conduct of the parties. For example:
 If a lessee occupies the property and pays rent regularly
with the lessor’s knowledge and consent, it creates an
implied lease.

 No formal documentation is required if the lease is


month-to-month or less than one year.

3. By Operation of Law
In certain circumstances, a lease may be created by operation
of law. Examples include:
 When a person continues to occupy property after the
expiry of the original lease term, and the lessor accepts
rent (Holding Over, as per Section 116 of TPA).

 Where the lessee is allowed to remain in possession


under a statutory provision or judicial decision.

4. By Presumption
A lease may be presumed to exist based on the nature of the
transaction, such as:
 When a person is in possession of another’s property
and pays rent regularly, a tenancy is presumed unless
proved otherwise.

 Local customs or trade usages can also create


presumptive leases, especially in agricultural or rural
contexts.

5. By Estoppel (Section 115 of TPA)


A lease may be created when:
 A person allows another to act on the belief that they
are the lessee.

 The lessor, by conduct or representation, cannot later


deny the lessee’s rights.

Key Provisions Governing Modes of Creation


Section 107:
1. Leases from year to year or exceeding one year must be
created by a registered instrument.

2. Leases for less than one year can be created orally with
possession or by a written instrument.
Section 116:
Addresses the creation of leases by holding over, when the
lessee remains in possession after the lease expires, and the
lessor accepts rent.
Section 117:
Excludes agricultural leases from the provisions of Chapter V,
unless specified by a state notification.

Essentials for a Valid Lease


Regardless of the mode, the following are required for a
lease:
1. Parties: Competent lessor and lessee.

2. Subject Matter: The immovable property being leased.

3. Duration: Definite term or period.

4. Consideration: Payment of rent, services, or other


valuable consideration.

5. Possession: Delivery of possession to the lessee.

Conclusion
The Transfer of Property Act, 1882 provides flexibility in the
creation of leases, allowing for both formal and informal
methods depending on the duration and terms. However,
compliance with registration and possession requirements is
crucial for enforceability, particularly for long-term leases.

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