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Opinions of Wednesday, 10 April 2019

Columnist: Emmanuel Mate-Kole

What you need to know about renting property in Ghana

Rental property is property from which a landlord receives payments from a tenant. Rental properties may be either residential or commercial. The rights and obligations of both the landlord and the tenant in a rental property can be found in a lease or tenancy agreement. These documents are subject to statutory and common law rules.

In this paper, I will show you the statutory and common law rules that every lease or tenancy agreement is subject to whether oral or in writing and how a landlord or tenant can use these rules to protect their interest or seek legal redress.

I will start by identifying the relevant common law rules and statutory rules.

1) The Common Law Rules

The common law rules are implied. That is, they are included as part of the lease or tenancy agreement although they are not expressly stated. These include:

a) covenant for quiet enjoyment;
b) the obligation not to derogate from the grant;
c) the obligation to pay rent;
d) the obligation not to commit waste;
e) the landlord’s right to enter to view the state of repair;
f) the safety or fitness for habitation

Please note that the common law rules are also implied by the Conveyancing Act. The difference is that the covenants implied by common law may be implied if there is no express provision in the lease or tenancy dealing with the issue. However, the covenants implied by Conveyancing Act if it is an absolute one, will apply invariably regardless of the express terms of the contract. For instance, it is an implied covenant in the Conveyancing Act that a landlord cannot contract out of the implied covenant by removing his personal liability.

Thus if a landlord attempts to remove his personal liability by stating in the tenancy agreement or lease that “he shall not be liable if the land conveyed is encumbered”, such a covenant will be void because it removes the landlord’s liability.

The upside of the covenants implied by common law is that they apply if the lease is oral and if it was not created for valuable consideration but the covenants implied by statute apply only if the lease is in writing and was created for valuable consideration.


2) The Statutory rules

The statutory rules are contained in various statutes namely:

a) the Rent Act, 1963 (Act 220);
b) the Rent Regulations, 1964 (L.I. 369);
c) Limitation Act, 1972 (NRCD 54);
d) the Conveyancing Act, 1973 (NRCD 175);
e) the Rent Control Act, 1986 (PNDCL 138);
f) the Courts Act, 1993 (Act 459);

These rules include:

a) Scope of application of the Rent Act

The first rule is that the Rent Act does not apply to vacant lands. Therefore if you have been given vacant land to build on the provisions of the Rent Act will not apply to you.

b) The requirement for a lease or tenancy agreement

The second rule is that for a lease or tenancy to be valid, admissible in court and enforceable, it must have the following characteristics:

• be in writing;
• signed by the landlord or by his agent who is duly authorised in writing to do so;
• stamped; and
• registered.

Below are some exceptions to the above rule. These leases are permitted to take effect without meeting the above requirements. These include:

• Leases by operation of law;
• Leases by operation of the rules of equity; and
• Leases where the lessee is in possession for a term not exceeding three (3) years.

c) The applicable rent

The third rule is that the Rent Act allows a landlord or tenant of premises or any person interested in premises to apply to a rent officer for an assessment of the recoverable rent of those premises. Recoverable rent is the maximum amount which a landlord may lawfully receive for premises. For the purpose of the recoverable rent, premises are classified as furnished and unfurnished, and different formulae are applicable to them. Section 10 of the Rent Act provides that a landlord or tenant of premises or any other person interested in the premises can apply to a rent officer to assess the amount of recoverable rent of those premises. Unless under very limited situations specified under the Rent Act, the rent officer cannot entertain an application for an assessment of a premises. The limited situations specified in the Rent Act include if an assessment has been made previously by him or the appropriate Rent Magistrate.

According to the courts in Andrew v. African Automobile [22/12/2004] Suit No. L249/98, the power of the rent officer in assessing recoverable rent is limited to the four walls of the lease and there is no room for any interpretation outside the lease. That case was about a rent officer who had attempted to interfere with the terms of the lease inspite of an express rent review clause because he found the existing clause unconscionable in the light of the inflationary trends then. The courts agreed that the rent together with the review clause had become “insignificant and unconscionable”.

That notwithstanding, the court held that the rent officer in assessing the recoverable rent, had no mandate to vary the terms of the lease. It further held that the power to interfere with a term of a lease was not with the rent officer but with the courts.

d) Varation of the terms of a lease or tenancy agreement

The fourth rule is that section 18 of the Conveyancing Act affords a landlord or tenant the right to go to court to seek a variation of the terms of a lease on grounds of unconscionability. Therefore in Andrew v. African Automobile above the landlord in seeking to vary the terms of his lease because he believed he had been cheated should have gone to the courts for redress and not the rent officer.

e) Recovery of possession of premises and ejectment

The fifth rule is that section 17 of the Rent Act allows an order of ejectment or recovery of possession to be made against a tenant on the following grounds:
i) non-payment of rent;
ii) breach of obligations in the Rent Act;
iii) nuisance or annoyance to adjoining premises;
iv) immoral or illegal use of premises;
v) deterioration of premises owing to acts of waste;
vi) notice to quit by tenant;
vii) premises required by landlord; and
viii) effluxion of time.

For a landlord to invoke section 17 of the Rent Act for a tenant’s ejectment, he must comply with the statutory and the common law rules. In other words, under the common law there must be an express provision in the lease for re-entry and forfeiture for all the grounds except (i) above. For a landlord to eject a tenant on grounds of non-payment of rent, the rent must be lawfully due. A rent cannot be lawfully due if it is rent in excess of the recoverable rent or if the tenant failed to make an advance payment of rent of one year in a yearly lease because the law permits the payment of only six months rent advance.

Also the Conveyancing Act provides that a right of re-entry or forfeiture under a provision in a lease for a breach of a covenant, condition or an agreement in the lease is not enforceable, by action or otherwise, until the lessor serves on the lessee a notice, specifying the particular breach complained of and requiring the lessee to remedy the breach, if the breach is capable of remedy, the lessee has knowledge of the fact that the notice has been served, and the lessee fails, within a reasonable time after the service of the notice to remedy the breach, if it is capable of remedy.

f) Statutory tenant

The sixth rule is that the law protects tenants whose lease or tenancy has expired but who remain in possession of the rented premises. The statute which confers such protection on the tenant is the Rent Act.

There is however a limitation on this right of a statutory tenant in the Rent Act. The Act provides that the statutory tenant’s right is a personal right to retain possession of the premises and it cannot be assigned nor does it pass on to his personal representatives upon his death. The effect of the determination of a statutory tenancy on a sub-tenancy was stated in the case of Dhalomal v. Pupulampu [1984-86] 1 GLR 341-366 where the court held that “when a statutory tenant sub-lets part of the premises, he does not thereby confer any estate or interest on the sub-tenant. When the statutory tenancy comes to an end, the sub-tenant’s right automatically comes to an end unless there is some statutory protection afforded him.

g) How a subtenant can become a tenant of a superior landlord

The seventh rule is that where a rented premises has been recovered from a tenant or an order or judgment for ejectment has been obtained against a tenant, the recovery of possession or ejectment of a tenant shall not affect the right of any subtenant to whom the premises or any part thereof were lawfully sublet before the proceedings for recovery of possession or ejectment were commenced to retain possession and every such order or judgment shall declare whether it shall be enforced against a subtenant or not.

However, in cases where the premises were not lawfully sublet a subtenant could not avail himself of this protection. In Dhalomal v. Pupulampu for instance, the court stated that if you want to take advantage of this protection then you must prove that the premises were lawfully let to you. For instance, where there is a rule against subletting without the consent of the landlord and the tenant breaches this rule by subletting without the landlord’s consent, then the subletting is not lawful and the tenant cannot take advantage of the protection afforded subtenant’s under this rule.

h) Rent Control Act and the Rent Act

The eigth rule is that you have to elect whether you want to pursue your case under the Rent Act or the Rent Control Act. Cases like Koranteng and ors v. Agyemang [1989-90] 1 GLR 130-133 have suggested that a landlord or tenant has the option of commencing his action in the rent office or the rent or housing committee. If the action is commenced at the rent offce, then it is a matter commenced under the Rent Act and it will naturally progress to the courts but if it is commenced at the rent or housing committee, then it is a matter commenced under the Rent Control Act and it will progress to the tribunals. Prior to the enactment of the Rent Control Act, the Rent Act and the Court Act regulated all landlord and tenant cases. However, with the advent of the Rent Control Act, the Regional Tribunals were also given power to try cases of landlord and tenant.

The Practice

In practice however, the landlord or tenant can only commence an action under the Rent Act as the institutions set up to deal with landlord-tenant issues under the Rent Control Act namely the rent or housing committee and the tribunals are obsolete thereby rendering the Rent Control Act otiose or ineffective.

i) Limitation on the recovery of rent arrears

The ninth rule is that a landlord or tenant is prohibited from bringing an action under the Rent Act to recover arrears of rent or damages arising from the arrears after the expiration of six(6) years from the date on which the arrears became due.


j) Procedure for making complaints

The tenth rule is that the Rent Act sets out a procedure for making complaints. A landlord, tenant or any person interested in premises can make a complaint to a rent officer who is required to investigate the complaints and determine same. A determination by a rent officer is enforceable if the Rent Magistrate is satisfied with the findings and conclusions of the rent officer. That notwithstanding, the Rent Act and its Regulations do not give the rent officer the power to decide any matter, that power rests solely with the Rent Magistrate. The Regulations require that the enforcement be made by a Rent Magistrate upon a referral from a rent officer. Therefore the rent officer’s determination is subject to the Rent Magistrate’s assent.

In Woode v. Dadson [1976] 2 GLR 185-189 an issue arose as to whether the jurisdiction of the Rent Magistrate who has the same powers as a District Magistrate was limited to claims not exceeding 2000 cedis.The court held that it had jurisdiction in all civil matters involving landlord and tenant. Therefore the jurisdiction of the Rent Magistrate in landlord and tenant cases is limitless regardless of the amount involved.

Conclusion

The key takeaways from this paper are that there are statutory and common law rules which govern every lease or tenancy agreement whether oral or in writing. Thus, it is imperative that you acquaint yourself with these rules so that at the appropriate time, you can avail yourself of some of its protections or use them as a sword to seek redress.