The "Occupancy Licence" That Was Really a Periodic Tenancy
In January 2022, Landlord Ltd granted Mira a document titled "Occupancy Licence" for a two-room shop in a market building for "12 months, renewable by agreement", at ₦150,000 per month. Clause 4 states: "The occupier shall have exclusive use of the shop during business hours." Clause 7 allows the owner to retain a key for inspection and emergency access. Clause 9 says: "This agreement creates no tenancy." Mira paid a "commitment fee" of ₦900,000, equal to six months' rent, and spent ₦2.5 million fitting out the shop. In March 2023, after 14 months of uninterrupted occupation and monthly rent accepted without protest, Landlord Ltd sold the building to Newco. Newco served a seven-day notice "terminating the licence" and changed the locks, alleging Mira paid February rent three days late. The applicable law requires a statutory notice to quit for periodic tenancies and allows forfeiture for breach of a rent covenant only after notice and a reasonable period to remedy. Mira's fittings remain inside.
1. Characterise Mira's interest at the time Newco changed the locks. Was she a licensee, a tenant for a fixed term, or a periodic tenant?
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The label "licence" is not decisive; the court looks at substance. Exclusive possession for a term at a rent normally creates a lease unless there are exceptional circumstances such as service occupancy, a charity, or a clear absence of intention to create legal relations. Clause 4 confers exclusive use during business hours, which is close to exclusive possession; the retained key for inspection is consistent with a lease and does not negate it. The fixed 12-month term expired in January 2023. Mira remained in occupation and Landlord Ltd continued to accept monthly rent without protest. That creates a periodic tenancy, probably monthly, by implication, rather than a tenancy at will, because rent is calculated and paid by reference to a period and the parties conduct themselves as landlord and tenant. Newco therefore took the building subject to Mira's periodic tenancy.
2. Was Newco entitled to terminate or forfeit in March 2023? Address the seven-day notice and the three-day late payment.
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A periodic tenancy requires a full period's notice to quit; a seven-day notice is invalid for a monthly tenancy. Forfeiture is different: if the agreement or statute contains a forfeiture clause for non-payment of rent, the landlord must usually serve a notice specifying the breach and requiring it to be remedied within a reasonable time. Three days' delay in paying February rent, where rent had previously been accepted late or without protest, is likely to have been waived; a single minor breach does not justify forfeiture. Changing the locks is peaceable re-entry; without a valid forfeiture it is an unlawful eviction and may also be a criminal offence. Mira can apply for relief from forfeiture and for an injunction requiring reinstatement.
3. What remedies and practical protections are available to Mira, including in relation to her fittings?
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Mira's primary remedy is an injunction restoring possession, plus damages for loss of profits and fitting-out costs caused by the unlawful exclusion. Her fittings are likely trade fixtures; a tenant has a right to remove trade fixtures during the term and within a reasonable time after it ends, provided removal does not cause substantial damage. If the fittings have become landlord's fixtures, she may have a claim in unjust enrichment only in limited circumstances. She should also recover the unexpired portion of the ₦900,000 commitment fee if it was a premium for a term that has been wrongly terminated, and any deposit. Practically, she should document the state of the shop, preserve the keys and rent receipts, and sue for wrongful eviction rather than simply re-entering, to avoid a breach of the peace.