ABOUT LAND LEASE
WHAT IS A LEASE TERM?
A lease term is the number of years land is leased. A lease term has a starting date and an end date. For instance, a lease term spanning five years that starts in 2010 will end in 2015.
How many years should a lease term be?
Any number of years between 3 and 75 years depending on the agreement made between a lessor and the lessee. It is up to the lessor to choose how many years he wants to lease out his land.
A lease term is dependent on whether the the lessee wishes to lease land for Residential, Industrial, Agricultural, Special and/or Commercial purposes. For example, if a person wants an agricultural lease to graze cattle for a short time, the lease term may be set at three and a half years.
Why is it important for the custom owner to know the lease term?
A lease term is important because it is the number of years following which the land may return to the lessor according to the lease agreement the lessor signed with the lessee.
Can the lessor negotiate the lease term?
Yes, it is very important that the lessor negotiates the term of lease. The term of lease desired by the lessee may be different from the lessor's plans for the plot of land in question.
The lessee cannot force a lessor to agree to a term he does not consent to.
It is not compulsory for every lease term to be set at 75 years.
What does negotiation depend on?
The negotiation of a lease term depends largely on the kind of activity the lessee wishes to undertake on the land.
Where can I find the lease term?
The lease term is in the application for 'Agreement or Condition' of Lease which the lessor will sign with the lessee.
Where can I find more information?
The Lease Execution Unit of the Department of Lands is in charge of all information regarding the negotiation of a lease term.
PROCESS IN ACQUIRING A TRANSFER
A lease transfer entails a person transferring a title over which he is the lessee to another party so he may become the lessee of that property.
Two Steps are skipped from 'Preparation of Consent to Surrender' directly to 'Consent is signed by declared Custom Owner or Lessor' if the concerned lease is not disputed or Urban Land. The flowchart below shows the process to follow to transfer a lease to another person.
PREPARING A LEASE'S REGISTRATION DOCUMENTS
This process usually ensues the issual of a Negotiator Certificate and acquiring a Survey Plan.
- Once a Negotiator Certificate is acquired,
4 copies of the proposed lease's Survey Plan
should be acquired as well.
- A private Consultant can be hired or a
Lands Department officer can be consulted,
to prepare your lease's documents.
Fees: 56,250VT
- When the Lease is signed,
it is lodged at the Lease Execution unit.
Fees: 16 875 VT
- The lease is processed through the
Land Department's checklists and,
if it is found to be in order,
it is lodged at the State Law Office
for further checking.
- The lease document is checked by
State Law Officers and then forwarded
for ministerial approval.
- Lease documents are returned to the
Lands Department for collection and further processing.
- The lease is Lodged at the Financial Service
Commission for stamping Fees:
1) Premium x 2%
2) Rent x Lease Term x 2%
- Lease is lodged for Registration at
the Land Registry. Fees:
1) Premium x 5%
2) Rent x Lease Term x 5%
- Once the lease has passed through all the necessary channels and is signed by the Principal Registry Officer, the lease is finalized and its documents are ready for collection.
CARRYING OUT A VARIATION
What is a Variation?
Subject to the provisions of the Land Lease Act and other existing legislations, the lease conditions in any registered leases may be varied, negated or added to in relation to conditions such as rent or lease term for instance.
This can be done by an instrument in the prescribed form executed by the lessor and the lessee and registered before the expiration of the lease term.
The lessor should be notified of any variation to a lease. No variation can take effect unless it follows the proper channels through the Department of Lands as shown below:
Get three copies of the Variation Document.
Variation must be prepared and signed by the officer in charge.
Variation must be certified by the senior Planning and Enforcement Officer.
Variation must be checked by the Valuation Unit
11,250vt fees have to be paid before the variation paper can be certified
The Minister of Lands approves it and the variation is in effect