Lease Terminology

The following are some of the terms used when referring to the registration of lands documents:

Lease - A document whereby the owner of a plot of land agrees to grant the right to use the land in question in accordance with the terms of the agreement made between the two parties for a period of time agreed to by the parties concerned.

Lessor - This refers to person who owns a land and leases it out to another person. If the land is in turn leased to a third party, the initial lessor is called the head-lessor.

Lessee - The person who is given a lease by the lessor.

Sub-lease - Lease of land that has already been leased from another person (head-lease).

Sub-lessor - A person who has granted a sub-lease. The sub-lessor is the lessee of the first lease. (head-lessee).

Sub-lessee - A person who has taken out a sub-lease.

Lease Forfeiture - This term means to 'forfeit a lease' and return this to the:

  • Custom owner (if the land is located in the rural area).
  • Government (if the land is located in the urban area or is a public land, for instance clinic, school).

Lease Transfer - A lessee may obtain a lease for the purposes of selling or granting the lease to another person, if the lessor agrees. He may transfer the land if he does not owe any payment on the land.

Terms and Conditions - The provisions of a lease agreement binding on the lessee and lessor. The lessor and lessee may negotiate the terms and conditions before signing the lease. Some examples of terms and conditions are:

  • the type of development that the lessor will allow to occur on the land in question.
  • the number of years within which the lessee must develop the land.
  • the lease term.
  • the lease rental or premium.
  • the rights still retained by the lessor to use the leased land (e.g: using the area near the sea, using a road that passes through the land, harvest fruit trees or hunt for birds in the land).

The land owner should think about what they still want to do on the land before they grant a lease, and is not obliged to agree to everything the lessee wants. The land owner has the right to negotiate the terms and conditions before they agree to sign a lease.

Lease term - The number of years the lessor agrees to lease the land to a lessee. The lease term only has a starting date and an ending date, for instance 3 year lease or a 20 year lease term.

The lease term may be set at any number of years between 3 and 75 years. The number of years depends on the kind of agreement you have made with the person who has leased their land to you. It is not compulsory for the lease term to be set at 75 years. The land owner has the right to choose the lease term.

Mortgage - This document gives the mortgagee the right to hold the lease of another person (mortgagor) as a security for a loan in the bank. If the loan repayment is not completed, the mortgagee may use the land or sell it.

Restrictive covenant - A covenant is an agreement or promise made by a lessor or lessee on the land use. A 'restrictive covenant' is a covenant whereby a lessor or lessee agrees or promises NOT to do something. Example: a lessee may agree not to operate a kava bar on the land leased to them by the lessor.

Restrictive covenants must be included in the registry of the leases. This can be in the lease title, or in the lease as a lease condition. If the covenants are not registered, these shall not be legally binding. There several types of restrictive covenants: easement, encumbrance and profit.

Easement - A non-lessee's right to enter the leased land. Example, the right to pass through a leased land either by a vehicle or on foot.

Encumbrance - This term means that there is some restriction of the lessee's right to using the land in any way they wish. Easement and mortgage are some examples of encumbrance.

Profit - This is a legal term which is like a covenant under which the a person may grow a garden, farm livestock, harvest food or livestock from another person's land.

Caution - The act of registering a claim of legal interest or right to use a plot of land that has not been registered. For example, a person who has a right under custom to pass through that land. A 'caution' is like a warning made to people who lease the land.