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jambo
3300 Posts |
 Posted - 02 Oct 2007 : 16:54:42
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for all of us who are considering renting, look at this
http://allafrica.com/stories/200710020599.html
Gambia: Why Annual Rents Might Be Illegal in This Country
The Daily Observer (Banjul)
OPINION
2 October 2007
Posted to the web 2 October 2007
St. George Adé Joiner
Banjul
In this country, landlords demand and get payment of rent for both commercial and residential properties for a year at the signing of a lease or at the conclusion of negotiations where an oral agreement is entered into for the rental of property.
There is widespread belief that this is either required by law or is permitted under existing statutes or common law doctrines. Nothing can be further from the truth. Most statutes in most jurisdictions outlaw the practice.
In others, the common law doctrine has undergone significant modification so as to make practice deemed illegal. Where it is not illegal, courts have struck down provisions in leases that provide for the annual payments because they offend basic equity principles. This article seeks to clarify the position of the law in this country by comparison to practices in other common law jurisdictions.
Under the old common law, rent is seen as a periodic payment for the possession of land. The foundation of this legal estate is based on the feudal doctrine of 'tenure'. Land is held at different levels on behalf of the freeholder who was the lord of the manor. When peasants were able to hold land, they did so by paying a rent to the landlord. This could take the form of cash payments but it could also be in the form of "fruits from the land". The landlord then had a dual advantage. He was the owner of the title to the land and also had a partial beneficial interest in the 'goods' that emanated from the land.
It is against this background that the English common law doctrine of rent was formulated. Under the traditional view, the landlord could stipulate all the terms under which a tenant would hold and occupy land in consideration for the payment of fee annually or at such times as was convenient to the landlord. There was little or no bargaining. Consequently, there was no understanding on the part of either the landlord or the tenant that a contract was being entered into. It was more like a licence.
This traditional view of the common law has long since been jettisoned in favour of a modern theory of contract that conceives of the relationship between the landlord and the tenant as a contractual one, nothing more, nothing less. The common law cannot now countenance a master/slave relationship as the foundation for the negotiation or conclusion of an agreement to hold property. The pace of change in the common law doctrine is slowest in England and Wales. In other jurisdictions (Australia, New Zealand, Canada, the U.S.A., Jamaica, Barbados, South Africa, Tanzania, Singapore, and many others) the pace has been faster. Judges in these jurisdictions have let it be known that this one-sided pattern of fixing rent was in general unacceptable. They would make exceptions, of course, for commercial leases where there is equality of arms between negotiating parties. However, judges have refused to endorse the practice for residential tenancies.
Perhaps the greatest change that has taken place is in the promulgation of statutes that expressly forbid the practice of landlords demanding annual rental payments in advance. These provisions are in statutes that are variously called Landlord and Tenants Acts, Rent Acts, Housing Acts, Settlement Acts or Property Acts. They do several things:
• They invalidate acceleration clauses (as annual rental payments are known) if these form part of leases for residential tenancies;
• They will permit the clauses in commercial leases only if the totality of the provisions in the lease do not appear to burden the tenant unduly. The statutes place the burden of proof on the landlord to show that this is in fact the case;
• The statutes create a legal interest for the tenant in the tenancy as opposed to only a beneficial interest. This means that if the tenant pays rent, he has possessory title to the land and not a mere interest in occupying or using space. He controls the rented land, not the owner;
• The statutes provide for a duty to mitigate by the landlord in the event of a default in the payment of rent by the tenant. In other words, the landlord has a legal obligation to look for other tenants after a current tenant has defaulted for non-payment of rent or has been evicted for other reasons.
These general propositions have enhanced the position of the tenant. However, some statutes permit the use of acceleration clauses but only under certain conditions. Most states in the United States have followed the tenor of the so-called Restatement of (Second) Property which recognises the use of acceleration clauses provided:
(a) The tenant retains the right to the leasehold and if the landlord terminates, the tenant must receive back all prepaid rent for the balance of the term, with interest;
(b) That in determining the amount of the prepaid rent, future rent is discounted to its present value;
(c) The acceleration clauses can only be used as a means to liquidate damages. Consequently, if a tenant defaults before the clauses trigger, sufficient time should be given to the tenant to cure (i.e. to pay the amounts owed). Only when this fails could the landlord enforce his rights under the acceleration clauses.
COMMENTS PLEASE 
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kayjatta
2978 Posts |
Posted - 03 Oct 2007 : 10:54:09
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| This is very true of the U.S. Acceleration clauses in residential leases are often a mere fraction of the monthly rent and are refundable at termination of lease pending damages to the property. |
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