What to do towards your lease expiration

Wednesday September 18 2019

If your lease is about to expire and you intend

If your lease is about to expire and you intend to renew it, give your landlord an advance notice so that you do not lose rights over the property. Photo by Ismail Kezaala 

By Beatrice Nakibuuka

When your lease period is about to end, depending on whether you want to renew the lease or not, there are certain things that you should do to ensure continuity or protect your property from damage.

According to Noah Kiganda, a property manager at Ecoland Property Services, it is good to have a continued relationship with the leaser to ease your way into continuity so you do not have to lose out on some assets that you may have put on the land.

“Talk to your landlord as soon as you notice you want to renew your lease and ensure to pay your premium early enough in order to ensure continuity of your lease,” he says.

An advance notice is beneficial to both the lessee (tenant) and the landlord which minimizes panicking. You would actually learn from the landlord if he still has the same land for lease or plans to have other developments. This will also allow you enough time to negotiate about the new terms for the lease or plan on where else to go.

Kiganda warns: “If you are not planning to renew your lease, ensure to clear the land of any harvests if you were doing farming or property to avoid any losses or damages that may happen after you have lost power over the land.”

Authorities, timing
The different facets of leasing land can include from a local authority such as Kampala Capital City Authority, Uganda Land Commission (ULC), Buganda Land Board or from an individual for a Mailo land lease.

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The standard leasing time can be 49 or 99 years, but one can choose to lease below this period of time or any time between the two gaps.
During the leasing period, one is required to pay premium (which is once in the lease time) and annual ground rent as standard payments.

The lease agreement
Contents of the lease agreement differ, depending on the preferences, plans and interests of individuals. There are no particular standards in writing a lease agreement. It is important for you to consult your lawyer to ensure that what you want to agree upon is enshrined within the agreement.

The agreement should include protection clauses for both sides and these must be backed up by notices and well documented.

“There can be, for instance, freedom for the lessee to walk out of the agreement in case things do not work out well (especially business) but this should be mentioned clearly in the agreement,” Kiganda says.

The landlord may also choose, but with notices if they change their mind, to do something developmental with the land and do away with the lease holder.
It is always advisable to have a clause of automatic renewal included in the agreement such that at the time of lease expiration, you do not lose out on your property.

“If you have a good relationship with the proprietor and do not plan to renew your lease, you can ask for a grace period for when you think you will have sorted out all your issues before leaving the land,” kiganda says.

Also agree upon the percentage by which the premium and ground rent are likely to increase after the expiration.

Renting or leasing?
There are people who are renting farm land for a longer time and they mistake this to be a lease.

“Leasing and renting are commonly used synonymously, but leasing involves the use of the land for particular purposes for a longer-term period of time. To rent land, on the other hand ,usually involves a short-term agreement on a piece of land and there is no paying of premium except for the rent fee,” Kiganda says.

In a lease agreement, the lessee can actually ask for a certificate of title, which can even have his or her name giving them power over that land because it is long term. The case of rented land only requires a tenancy agreement.

What is likely to change?

Godwin Mumbere, a marketer at Royale Property Consultants, says at the end of the lease, the current holder is always considered as the first priority even when there is no automatic renewal agreement, unless the proprietor has other plans to develop the land.

So if you want to renew your lease, at the expiry of your current lease agreement, premium is very likely to change because the value of an acre of land is very much likely to have changed from the time you got the land.

“There is, therefore, always a need for you to do an assessment based on the current value of the land in that particular area as you renew the lease. This is more likely to hike the price of your premium,” he says.

It is also more likely that the time you got into the lease agreement (because they last for several years), there was a currency change where the value of money appreciated and so many commercial laws have really changed, thus, the need to change the prices.

From the time you got into the agreement, there are a lot of things that have changed, improved social amenities, purposes of land have changed (from farm land to commercial land) and this is very likely to increase the prices in your new lease agreement.

Also, your landlord may have changed. You may have to deal with the heir or relatives or a new authority different from the previous landlord.

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