Different between Tenancies and Leases
A lease is an instrument creating an enduring interest in property for a terms or fixed period of time.
National Land Code 1965 (NLC) states:
S221 NLC stated “Every lease granted pursuant to this section shall be for a term exceeding three years”. A lease is a registered lease and have a registered interest in the property.
S223 NLC stated ” Any tenancy or sub-tenancy for a term not exceeding three years granted”. Tenancy exempt from registration.
S226(2) NLC stated “The lease may not granted to two or more persons or bodies except trustees or representatives”‘
The maximum period for lease is ninety nine (99) years in respect of whole land and thirty three (33) years in respect of part of the land. Tenancy granted a maximum of three(3) years or periodic tenancy (weekly, monthly or yearly).
Lease to Option is a binding contract for Tenant to sign an Agreement with option to purchase.
They are two types of Option Agreement:
1. Lease to Option is a leasing agreement that does not obligate the tenant to purchase the property, but does obligate the seller to sell the property if and when the tenant properly exercises the option to purchase.
An Option Agreement provides the tenant-option holder the right to purchase the property at an agreed price during the lease term or other specified term, also called the “Option Period”, in exchange for a fee paid to the seller called the “Option Fee.” Option Fee normally credited into purchase price, but not refundable if Tenant abortive the agreement.
2.Lease to Purchase – The leasing contract for sale which obligates each party to the typical terms of a residential purchase agreement upon the expiration of the specified lease term. As the tenant-buyer has contracted to purchase the property in the context of a Lease to Purchase, oftentimes the lease will provide that the tenant-buyer is responsible for maintenance and repairs.