The Pharmacy Lease That Was Never Registered
On 1 February 2019, Grace Kamanga took a five-year lease of a commercial plot on Victoria Avenue, Blantyre, from Nkula Properties Ltd. The lease was in writing and provided for rent of MWK 450,000 per month, payable monthly in advance. Grace registered no lease at the Deeds Registry; she went into occupation, operated a pharmacy, and paid rent regularly. In December 2023, Nkula sold the plot to Chisomo Investments Ltd. Before completion, Chisomo's director visited the plot, saw the pharmacy sign, and was told by Grace that she held a lease until January 2024. The written sale agreement said the property was sold 'free from tenancies'. After transfer, Chisomo gave Grace 30 days' notice to vacate, saying her unregistered lease could not bind it. Grace has three years left on the lease and has spent MWK 2,500,000 on fittings. She seeks an injunction and a declaration that the lease binds Chisomo.
1. What is the legal status of Grace's unregistered five-year lease?
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Legal vs equitable lease. For registered land, a lease exceeding three years must be registered to create a legal lease. Grace's five-year lease was not registered, so it is not a legal lease. That is not the end of the matter. A written lease that satisfies the requirements of a contract can create an equitable lease, especially where the tenant has gone into occupation and paid rent. Equity treats as done that which ought to be done.
Application. Grace has a written lease, took possession, traded openly and paid MWK 450,000 monthly. Those facts support an equitable lease for the unexpired term. Her interest is not a mere licence; it is an interest in land capable of binding a purchaser with notice.
Conclusion. The lease is unregistered and therefore vulnerable, but it is not a nullity. It is at least an equitable lease, and the court must decide whether it binds Chisomo.
2. Is Chisomo bound by the lease, given the sale agreement says 'free from tenancies' and its director had actual notice?
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Priority. A purchaser of registered land takes subject to interests that are registered and, in some cases, to unregistered interests of which it has notice. Actual notice is the key here. Chisomo's director visited the plot, saw the pharmacy sign, and was told by Grace that she held a lease until January 2024. That is actual knowledge, not constructive notice.
Effect of 'free from tenancies'. A statement in the sale agreement between seller and purchaser cannot extinguish a tenant's pre-existing interest. It may give Chisomo a contractual claim against Nkula, but it does not defeat Grace's equitable lease. A purchaser who buys with actual notice of an occupier takes subject to that occupier's rights; otherwise the registration system would become a tool for defeating known interests.
Conclusion. Chisomo is bound by Grace's unregistered lease to the extent of its unexpired term. The 'free from tenancies' clause does not assist Chisomo against Grace; it may assist Chisomo against Nkula for breach of the sale agreement.
3. What remedies should the court grant?
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Declaration and injunction. The court should declare that Grace's lease binds Chisomo for the remaining term and grant an injunction restraining Chisomo from evicting her without lawful process. Damages would not be adequate because the loss of the pharmacy premises and fittings may be difficult to quantify and the lease is for a fixed term.
Alternative remedies. If the court finds the lease does not bind Chisomo, Grace would have a claim against Nkula for breach of the covenant for quiet enjoyment or for misrepresentation, and possibly an occupation rent. But that is a second-best result. The primary remedy should protect her possession.
Fittings. The MWK 2.5 million spent on fittings may support a claim for compensation or removal rights, depending on the lease terms. The court should also consider whether Grace has breached any obligation; no such breach is stated.
Conclusion. The justice of the case favours a declaration and injunction. Chisomo took with actual notice and should not be allowed to use registration as a technical defence to defeat a known lease.