A license is a document stating that permission is granted by a party (“licensor”) to another party (“licensee”) to occupy a property. The licensor does not hand over exclusive possession of the property but retains his or her right to use it. In Street v Mountford  2 All ER 289:
“The issue whether or not exclusive possession has been granted is the test for distinguishing between a lease and a license.”
A tenancy may be simply defined as a letting of land for a term not exceeding three (3) years. A tenancy is not a registrable interest in land and is known as a “tenancy exempt from registration” under Section 213 of the NLC 1965.
In the eastern states of Sabah & Sarawak, a tenancy is substantially a sublease not exceeding one year which need not be registered in order to be valid. See Section 105 and Section 161 of the Sabah and Sarawak Land Ordinance & Code respectively.
The three essential characteristics of a tenancy are as follows:
As per Lord Templeman in Street v. Mountford  2 All ER 289:
“…To constitute a tenancy the occupier must be granted exclusive possession for a fixed or periodic term certain in consideration of a premium or periodical payments. The grant may be express, or may be inferred where the owner accepts weekly or other periodical payments from the occupier…”
Although a tenancy is not capable of being registered, it may however be protected by way of an endorsement on the register document of title – Section 213(3) NLC 1965. Once such an endorsement has been made, the tenancy binds any subsequent purchaser i.e. where the sale and purchase agreement is entered into after the endorsement.- See Than Kok Leong v Low Kim Hai  1 MLJ 187
Tenancies may only be endorsed on the title. As such tenancies are therefore never taken as security for loans granted by financial institutions
The rights and obligations of the parties under a tenancy are laid down either expressly by the parties or , in the absence of any express agreement, impliedly by law.
A tenancy comes to an end when:
Oral tenancy agreements are a legal method of tenancy agreement. These types of agreement are not recommended as the tenant and landlord can find problems occur, for instance with rent payments and deposits.
An agreement still exists even if there is only an oral agreement between the tenant and the landlord. For example, it may have been agreed at the start of the tenancy how much the rent would be and when it is to be paid, whether it includes fuel and bills such as water rates and who is allowed to stay in the property. Once a landlord has accepted rent from a tenant then a previous verbal agreement now becomes a legal agreement.
Oral agreements can be difficult to enforce because there is often no proof of what has been agreed. For instance, a particular problem may arise which the agreement did not cover. As with written agreements, oral agreements also provide the landlord and tenant with certain rights, but the difference is that they could be more difficult to enforce. If a dispute went to the courts, there would be no written tenancy agreement as evidence, so this could result in one of the parties not getting the rights they believe were verbally agreed upon at the start of the tenancy.
It is therefore generally in both the landlord and the tenant’s best interests to have a tenancy agreement in writing to ensure that both sides understand their rights and responsibilities. An agreement in writing will also prevent disputes over what the verbal agreement contained.
In Peninsular Malaysia, a lease is a letting of land for a term exceeding three (3) years and is a registrable interest as provided for under Sec. 221(2) and 227 of the NLC 1965.
In Sabah and Sarawak, a lease is referred to as a sublease and is one exceeding one (1) year. Only registrable sub-leases are valid as per Section 104 and 158 of the Sabah and Sarawak Land Ordinance and Code respectively.
A lease may be defined as an interest in land granted by the lessor, whether he is the owner of the land or not, to a lessee for a certain period. The main characteristics of a lease are as follows:
A lease may be granted by way of an oral or written agreement. It only has a legal effect upon registration of an instrument in Form 15A or in the case of sublease, Form 15B of the NLC 1965.
Where the land is subject to a charge, the written consent of the chargee must be obtained before the lease can be granted. (See Section 226 of NLC 1965).
A lease cannot be granted in perpetuity. Section 221(3) of the NLC 1965 provides that the maximum period for a lease is 99 years in respect of the whole of the land and 30 years in respect of part of the land. (See Siew Soon Wah v. Yong Tong Hong  MLJ 133)
The rights and obligations of the parties to a lease are laid down either expressly by the parties themselves or, in the absence of any express agreement, impliedly by law. The parties to a lease or sublease may incorporate the provisions as set out in the Sixth Schedule of the NLC 1965 in their agreement subject to any modification as they think fit. (See Section 229 of the NLC 1965).
In the absence of any express provisions, certain implied agreements are applicable to every lease or sublease. Section 230 of the NLC 1965 provides that the following agreements shall be implied:
Section 231 of the NLC 1965 provides that in the absence of any express provisions to the contrary, the following agreements on the part of the lessee and sublessee are to be read into the lease or sublease:
Section 232 of the NLC 1965 provides that in the absence of any express provisions to the contrary, the following agreements on the part of the lessor and sublessor are to be implied into every lease or sublease:
A lease ends in any one of the following circumstances:
Leases are registrable with the Land Office and the lessees have a registered interest in the land upon registration. The interests of a lessee is better taken care of/protected compared to a tenant under a tenancy as they only have an equitable interest in the land, that is, their interests are subject to those with registered interests. However, all tenants/lessees are entitled to the quiet enjoyment of the property subject to the terms and conditions of the governing written documents.
A lease can be registered with the Land Office by submitting a duly completed Form 15A NLC with registration fees.
This preview is an excerpt from the following publication. this publication for access to all the commentary and precedents.
by By Lawyers For Lawyers author - Jayadeep Hari & Jamil
This publication provides comprehensive guidance when dealing with the law governing landlord and tenancy in Malaysia. Although there are some legislative provisions relating to this area, landlord and tenant disputes are largely governed by common law. The lack of legislative certainty surrounding this area means it can be difficult to navigate. This step-by-step guide provides clear and practical direction which aims to ensure protection for both landlord and tenant alike.
This guide details the difference between a licence, a tenancy and a lease. It provides all the tools necessary to resolve a dispute efficiently and effectively including links to relevant legislation and references to relevant case law. The commentary highlights all of the areas of possible contention and aims to ensure that the relevant lease/tenancy agreement pre-empts any possible problems.
The guide also includes a comprehensive suite of precedents including;
Whether you are acting for the Lessor or Lessee, Landlord or Tenant this publication provides useful guidance which will aid efficiency, time management and productivity.