Author Name:   suryaprakashnlu

This article is about defining the concept of Periodic Tenancy and and differentiating it with the other types of lease that have been mentioned under the Transfer of Property Act...

Periodic Tenancy

The law of property is one of the most important spheres of law in India. It is the source of most of the litigation in India. The Transfer of Property Act, 1882 deals will different kinds of transfers including lease, mortgage and incorporates some of the important doctrines in property law.

The concept of lease is one of the most important topics of property law. The basic concept of lease has been explained in this project. Periodic lease or periodic tenancy has been extensively dealt with during the course of this submission.

Lease: The Concept
Under this topic the concept of lease is explained as well as the relevant provision of the Transfer of Property Act, 1882 have been referred. A clear understanding of the concept of periodic tenancy necessitates an explanation of the concept of lease. Periodic tenancy is one of the types of leases recognized under the Transfer of Property Act, 1882

A lease creates a right to enjoyment of a demised property and a tenant is entitled to remain in possession unless the lease is duly terminated. The transaction is with respect to immovable property and creates a right to enjoy such property for a certain term and for consideration on the conditions mentioned in it. The lease is therefore essentially a contract between the lessor and the lessee for the possession and use and occupation of the property or the premises, on one side and compensated by rent and consideration on the other. In Deo Nandan v. Meghu Mahton the Court observed that:

“A mere demand for rent was not sufficient to create the relationship of landlord and tenant which is a matter of contract assented to by both parties.”

Section 105-117 of the Transfer of Property Act, 1882 deal with the lease of immovable property and rights and liabilities of lessor and lessee and other conditions. Section 105 of the Transfer of Property Act, 1882 defines a lease as follows:

“A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.”

Therefore a perusal of the definition incorporated under this Section shows that lease is a partial transfer i.e. the transfer of right of enjoyment for a certain time. Section 107 of the Transfer of Property Act, 1882 provides for the mode in which a lease may be made. According to this Section the lease of immoveable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument. All other leases of immoveable property i.e. generally from month to month or for a term of a year or less than a year may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

According to the Supreme Court in B. Arvind Kumar v. Government of India and Ors., the essential ingredients of lease are

· There should be a transfer of a right to enjoy an immovable property
· Such transfer may be for a certain term or in perpetuity
· The transfer should be in consideration of a premium or rent
· The transfer should be a bilateral transaction, the transferee accepting the terms of transfer.

In Bruton v. London & Quadrant Housing Trust the House of Lords observed that:

“Lease is nothing more than a contract to deliver up possession to another for a fixed term and provided it is secured a lessee seldom requires more”

Under English Law, a lease should have three essential characteristics:
· A definite Term (whether fixed or periodic)
· At a Rent
· Exclusive Possession

While explaining the concept of lease Sir Lawrence Jenkins in Kally Das v. Monmohini observed that

“A man who being the owner of a land grants a lease, carves a subordinate interest out of his own, and does not annihilate his own interest. This result is to be inferred by the use of the word ‘lease’, which implies an interest is still remaining in the grantor. Before the lease the owner had the right to enjoy the possession of the land and by the lease he excludes himself during the currency form that right.”

In the same vein, in a decision of Sheela and Ors. v. Firm Prahlad Rai Prem Prakash, the Supreme Court, while relying on the Law of Landlord and Tenant, by Evan & Smith has observed that:

“it is an implied condition of every lease, fixed-term or periodic and formal or informal, that the tenant is not expressly or impliedly to deny the landlord's title or prejudice it by any acts which are inconsistent with the existence of a tenancy.”

Further in the case of Girdharilal v. Meghal Lord Shaw held that
“The essential characteristic of a lease is that the subject is one which is occupied and enjoyed and the corpus of which does not in the nature of things and by reason of the user disappear”

The leases recognized under Section 105 of the Transfer of Property Act, 1882 are:
· Leases for a certain time
· Periodic leases
· Leases in perpetuity

Periodic Tenancy
Under this topic the concept of periodic tenancy is sought to be explained under various heads. The concept of periodic tenancy will be dealt with in detail. This entails the basic meaning of the term which is procured from several Indian as well as foreign authorities. The presumption as regards periodic tenancy is also looked into. In addition to this with regard to periodic tenancy the duration and termination of the same and the relevant legal provisions have been discussed. Further a comparison between periodic tenancy and the tenancy for a fixed term is sought to be drawn.

Meaning and Scope
A periodic lease as the name suggests is a lease by the period. However it is not a lease for a definite period as the interest of the lessee does not terminate at the end of the period. "Periodic tenancies" are tenancies which endure for a certain period, and continue for subsequent successive periods of the same length, unless terminated by due notice. These are tenancies from year to year or from month to month. A lease for an indefinite term is a year-to-year tenancy, which parties thereto may renew each year by failure to give notice to terminate. A "month-to-month tenancy" is a continuing relationship that remains unabated at its original terms until terminated by one of the parties.

In the case of Utility Article Manufacturing Co. v. Raja Bhadur Motilal Bombay Mills, Kania. J. observed.

"It is clear that periodical tenancies do not come to an end by the efflux of time, for the simple reason that the time is not limited by the original lease itself".

A "periodic tenancy" is thus an estate that continues for successive periods unless terminated at the end of a period by notice. Periodic tenancies are sometimes recognized as a form of tenancy at will.The case of Horizon Homes of Davenport v. Nunn the term periodic tenancy has been explained in the following manner:

“A "periodic tenancy" is one that endures for a certain period and will continue for subsequent like periods unless terminated by one of the parties at the end of the period”

Thus the essence of a periodic tenancy is its continuity, until it is terminated by a certain process that is required to be performed by either party. Thus a periodic tenancy is referred to as a continuing tenancy subject to termination at various rental periods rather than a series of individual and new tenancies. In the case of Coleman v. Thomas it was observed that:

“A "periodic tenancy" involves a continuous succession of "periods" and lasts for an indefinite time and does not terminate and renew itself at the beginning of each period; rather, each new period is simply an extension of the original period.”
According to Prudential Assurance Co. Ltd. v. London Residuary Body and Others “It is fundamental to the nature of a periodic tenancy

(a) that there is in existence throughout the tenancy a fixed and certain term (i.e., the annual or other period of the periodic tenancy) and

(b) that the automatic continuation of that term can at all times be determined by either party by a notice of certain duration, i.e., a notice to quit.

Presumption of Periodic Tenancy
The parties may expressly state that the lease shall continue from period to period or their agreement may be apparent from the circumstances. The mode in which the rent is reserved may afford a presumption as to the period of the lease

Where the parties enter into a lease of no stated duration and periodic rent is reserved or paid, a periodic tenancy is presumed. The period thus presumed is equal to the interval for which rent is reserved or paid to a maximum periodic tenancy of year to year. The presumption that a periodic tenancy is intended may be rebutted by language or circumstances showing a contrary intent. Where the parties enter into a lease of no stated duration and periodic rent is reserved or paid, a periodic tenancy is presumed.

This can be illustrated by the following examples:
· L leases a residence to T on July 1 “to continue from month to month.” The lease creates a tenancy continuing for successive periods of one month until proper notice is given.

· L leases a residence to T to commence July 1, at a rent of $100 per month. No duration is specified. The lease creates a periodic tenancy continuing for successive periods of one month until terminated by proper notice

In the case of London Baggage Company v. Railtrack PLC it was observed that:
“There is no rule that where a tenant holds over after the previous tenancy has been determined, the tender and acceptance of rent raises a presumption of a periodic tenancy. In deciding whether a periodic tenancy has come into existence in such a case, the court must look at the intention of the parties and all the surrounding circumstances.”

It may be important to determine whether each successive period of a periodic tenancy is a new tenancy or an extension of the original tenancy, as, for instance, when it is necessary to determine whether rights and duties fixed at the commencement of the original term have continued unchanged into the successive periods. Since the periodic tenancy is in fact a continuing relationship, the general rule is that each successive period is treated as a continuation of the original tenancy, unless the parties specifically provide for a different result.

In the Indian context Section 106 of the Transfer of Property Act, 1882 is relevant here. The Section reads as follows:
“In the absence of a contract or local law or usage to the contrary, a lease of immoveable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months notice expiring with the end of a year of the tenancy; and a lease of immoveable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice expiring with the end of a month of the tenancy.”

Section 106 thus raises a presumption as to the nature of the tenancy on the basis of the user. A lease of immoveable property for agricultural or manufacturing purposes is deemed to be from year to year and those for any other purposes are deemed to be from month to month.

According to the case of Nagji Vallabhaji and Co. v. Meghji Vijpar and Co. and Ors.
“Section 106 creates a presumption in case of leases. In the absence of a contract or local law or usage to the contrary a lease of immoveable property for manufacturing or agricultural purposes shall be deemed to be a lease from year to year and "for any other purposes shall be from month to month". If, therefore, there is no contract of lease which fell within the purview of section 107 then the presumption in section 106 will be attracted.”

Duration
Duration of the term in period leases is continuous from period to period. The lease from period to period described in this section traditionally has been referred to as a tenancy from year to year, or a tenancy from month to month, or a tenancy from week to week, depending on the length of the period that is specified. A month-to-month tenancy is not generally viewed as a tenancy for a fixed term that is periodically extended, but rather as a tenancy having no fixed term that continues indefinitely until terminated

It involves a continuous succession of "periods," lasts for an indefinite time, and does not terminate and renew itself at the beginning of each period. Rather, each new period is simply an extension of the original period.

Length of periods
A lease for an indefinite term is a year-to-year tenancy, which parties thereto may renew each year by failure to give notice to terminate. A "month-to-month tenancy" is a continuing relationship that remains unabated at its original terms until terminated by one of the parties.

The period of the tenancy is determined by the interval between rental payments. Unless the parties express a different intention if a yearly rent is reserved or paid, the tenancy is generally considered as one from year to year, even though the payments are made in installments such as quarterly or monthly. If, however, the rent is not to be paid yearly, but monthly, the tenancy is from month to month, regardless of the length of time the tenancy may actually exist. Presumptions may dictate that certain leases be deemed month-to-month, or year-to-year when the lease does not contain a special agreement as to a fixed term. Where a periodic tenancy arises from a holding over, if the rent paid is a monthly rent, a tenancy from month to month may be created.

Termination
The lease may specify the time before the end of the designated period that notice must be given by either party to terminate the lease as of the end of the period. If no such notice of termination is given, the lease will continue for another period.

A notice to quit is essential at common law to terminate a periodic tenancy, such as a tenancy from year to year or from month to month; and where proper notice is given, a periodic tenancy terminates at common law at the end of some period, and only at such time, in the absence of a provision for termination at some other time or in the absence of a surrender. The general rule is that, in the absence of an agreement between the parties, a month's notice prior to the end of the leasehold period, when that period is a month or more, is adequate to terminate the lease.

In the absence of any provision in the lease in regard to notice to terminate a periodic tenancy, the common law required notice six months prior to the end of the period, if the period is from year to year, and notice equal to the length of the period in other instances. Although the six months' notice requirement remains a reasonable rule in most areas for land leased on a year to year basis for farming or grazing purposes, the common law six months' notice requirement is no longer reasonable for other types of leases in light of extensive statutory changes as to the period of notice required to terminate a tenancy from year to year. For property not leased for farming or grazing purposes, a month's notice prior to the end of the period, when the period is a month or more, is adequate in all cases, and should be adopted judicially in the absence of an agreement by the parties for some other notice requirement.

In Queen’s Club Gardens Estates Ltd. v. Bignel it was observed by Salter J.
“In case of all periodic tenancies, whether from year to year, or from quarter to quarter, or from month to month or for any other period, the law appears to be that the tenancy is from period to period, from one fixed date to another. It is a tenancy from so many years, or quarters, or months or weeks as the parties may think fit. If a new period be allowed to begin, the tenancy must in absence of course of any other arrangement between the parties, continue until the period ends, and neither party can, against the will of another, put an end to the tenancy during the currency period.”

The lease may specify that the notice of termination must be in writing, that the date of its receipt by the landlord or his authorized agent or by the tenant or his authorized agent will determine whether it was given in time, that the notice must state the date of termination and that date must be at the end of a period, and that other specified reasonable formalities may have to be met. In the absence of controlling provisions in the lease, the notice of termination may be oral; if it is mailed the notice is not effective until it is received by the addressee and the burden of proof is on the one giving the notice to prove when it was received; and if the date stated in the notice for termination is not the end of a period or is too short a time before the end of a period, the notice will be effective to terminate the lease at the earliest possible date after the date stated. A periodic tenancy is not terminated by the death of the landlord or of the tenant.

Comparison with Tenancy for a Fixed Term
The most important difference between a periodic tenancy and a tenancy for a fixed term is that the latter terminates at the end of such term, without any requirement of notice as in the former. A periodic tenancy does not terminate automatically at the end of any particular term, but continues to renew itself until it is terminated at the end of one of the periods by proper notice by either the landlord or tenant. If there is an agreement as to a termination date, the tenancy is for a term and is not a tenancy at will.

Periodic Tenancy: Relation to Tenancy at Will
A periodic tenancy is sometimes called a tenancy at will, regarding it as a tenancy of will with restraint on the exercise of the will. A tenancy from year to year or from month to month arises by express agreement, or in absence of contract, by presumption of law under Section of 106 of the Transfer of Property Act, 1882. A tenancy at will implied from holding over, or from entry under a void lease, becomes on payment of rent a tenancy from month to month or from year to year or from week to week.

Conclusion
Periodic tenancy is one of the types of leases recognized under the Transfer of Property Act, 1882. The law regarding periodic tenancy is fairly well settled. In this type of lease agreement the time of termination is not fixed. The lengths and the duration of the periodic tenancy may be determined by the contract or by the circumstances. Termination is dependent on the discretion of the parties ie. the landlord and the tenant.

However this type of lease has the potential of leading to a lot of ambiguity and even more so owing to the presumption under Section 106 of the Transfer of Property Act, 1882. Further conflict would occur regarding the termination as not fixed period is determined. Thus the lease for a certain period of time may be preferable.

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# Veena Kohli v. Rawal Apartments Pvt. Ltd. 1998 (71) DLT 489
# Mineral Development Ltd. v. Union of India AIR (1960) SC 1373
# (1907) 34 Cal 57
# (2007) 5 SCC 745
# [2000] 1 A.C. 406
# (1897) 24 C 440 cf P. M. Bakshi S.M. Lahiri’s the Transfer of Property Act (India Law House, New Delhi 11th edn. 2001)
# AIR 2002 SC 1264
# (1918) 45 C 87 PC cf P. M. Bakshi S.M. Lahiri’s the Transfer of Property Act (India Law House, New Delhi 11th edn. 2001)
# Solil Paul Mulla The Transfer of Property Act, 1882 (Butterworths India, New Delhi, 9th edn. 2000)
# Mafizuddin v. Manindra AIR 1951 Assam 141 cf P. M. Bakshi S.M. Lahiri’s the Transfer of Property Act (India Law House, New Delhi 11th edn. 2001)
# Solil Paul Mulla The Transfer of Property Act, 1882 (Butterworths India, New Delhi, 9th edn. 2000)
# Daugherty v. Burns 772 N.E.2d 237 (4th Dist. 2002).
# J.M.J. New Jersey Properties, Inc. v. Khuzam, 839 A.2d 102 (App. Div. 2004).cf 9 Am. Jur. 2d Landlord and Tenant § 115
# A.I.R. 1943 Bom 306
# State v. Fin and Feather Club 316 A. 2d. 351 (Me. 1974)
# Camp v. Matich 197 P.2d 345 (1st Dist. 1948).
# 684 N.W.2d 221 (Iowa 2004) cf 9 Am. Jur. 2d Landlord and Tenant § 115
# 52 C.J.S. Landlord & Tenant § 208
# 2000 UT 53, 4 P.3d 783 (Utah 2000).
# [1992] 2 A.C. 386
# Sheikh Akloo v. Sheikh Emanam (1917) 44 Cal 403 cf Solil Paul Mulla The Transfer of Property Act, 1882 (Butterworths India, New Delhi, 9th edn. 2000)
# Gulf Coast Realty Co., Inc. v. Professional Real Estate Partners, Inc., 926 So. 2d 992 (Ala. 2005)
# [2000] L. & T.R. 439
# EST 2d PROP-LT § 1.5
# 1983 (2) Bom CR 140
# Bowen v. Anderson (1894) 1 QB 164 cf Solil Paul Mulla The Transfer of Property Act, 1882 (Butterworths India, New Delhi, 9th edn. 2000)
# EST 2d PROP-LT § 1.5
# Silveira v. County of Alameda, 43 Cal. Rptr. 3d 501 (1st Dist. 2006)
# Coleman v. Thomas, 4 P.3d 783 (Utah 2000).
# Housing Resource Group v. Price, 92 Wash. App. 394,
# Idalia Realty & Development Co. v. Norman, 232 Mo. 663,
# Spear v. Lyndale Mfg. Co., 35 N.J. Super. 385
# Dorado v. Loew's, Inc., 88 A.2d 188
# Gulf Coast Realty Co., Inc. v. Professional Real Estate Partners, Inc., 926 So. 2d 992 (Ala. 2005).
# (1924) 1 K.B. 117 cf Solil Paul Mulla The Transfer of Property Act, 1882 (Butterworths India, New Delhi, 9th edn. 2000)
# Read v. Mincks' Estate, 176 N.W.2d 192 (Iowa 1970)
# Witmer v. Exxon Corp., 260 Pa. Super. 537
# Goler Metropolitan Apartments, Inc. v. Williams, 43 N.C. App. 648
# Sunset Mobile Home Park v. Parsons, 324 N.W.2d 452 (Iowa 1982)
# Ladies Hosiery v. Porker [1929] All ER Rep. 667

The  author can be reached at: suryaprakashnlu@legalserviceindia.com

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