Sublease agreements are a vital instrument in Lesotho’s property and commercial landscape, facilitating the temporary occupation and use of immovable property through contractual arrangements between a sublessor (typically the primary lessee or landlord) and a sublessee (tenant). However, a critical aspect often overlooked by contracting parties is the statutory requirement that certain subleases must be registered in the Deeds Registry in order to be valid and enforceable. This article analyses the legal framework governing sublease registration under the Deeds Registry Act 12 of 1967, examines the legal consequences of non-compliance, and considers the jurisprudential authority of the Court of Appeal in Molomo Filing Station (Pty) Ltd & Another v Mendi Group (Pty) Ltd C of A (CIV) 83/2019. It further explores the commercial advantages of registering long-term subleases, including their use as mortgageable interests.
The legal point of departure is Section 24 of the Deeds Registry Act 1967, which delineates the scope of leases and subleases that must be registered to be effective. Section 24(1) provides that any lease or sublease that endures for a period of not less than three years, or is renewable such that the aggregate term may amount to at least three years, or endures for the natural life of the lessee or another designated individual, must be registered in the Deeds Registry. This requirement is not discretionary; it is mandatory and constitutes a condition precedent for legal efficacy.
Pursuant to Section 24(2) of the Act, prior to the lodging of the sublease for registration, the consent of the Commissioner of Lands must be obtained. Once consent is granted, the parties are required to submit the agreement to the Deeds Registry within a statutory period of three months. The failure to comply with this procedural requirement triggers the operation of Section 24(6), which provides in unequivocal terms that any sublease that requires registration but is not so registered “shall be null and void and of no force or effect.”
This provision was emphatically interpreted by the Lesotho Court of Appeal in Molomo Filing Station v Mendi Group, where the court was required to determine the validity of a 12-year sublease that had not been registered. The appellants sought to enforce the agreement despite its non-registration. The Court of Appeal held that, consistent with the plain language of Section 24(6), the sublease was legally void ab initio and incapable of enforcement. This decision affirmed the legislative intention that registration is not a mere procedural formality but a substantive legal requirement. The case has become a leading authority on the consequences of failing to register long-term subleases in Lesotho.
The implications of this ruling are far-reaching. From a legal perspective, registration ensures enforceability in the event of a dispute. A registered sublease becomes part of the public record, which strengthens the evidentiary standing of the agreement and provides third parties, including lenders and prospective assignees, with legal certainty regarding the nature and duration of the sublessee’s rights.
Moreover, registration facilitates the use of sublease rights as security for credit facilities. Under Section 36(a) of the Deeds Registry Act, a registered sublease is recognised as immovable property for purposes of mortgaging. This means that a registered sublease can be hypothecated through a mortgage bond in favour of a creditor, thereby enabling sublessees, particularly those engaged in commercial ventures, to leverage their rights for capital investment, property development, or operational expansion.
From a commercial standpoint, the registration of subleases enhances transactional transparency, mitigates legal risk, and supports financial intermediation. Financial institutions are increasingly relying on registered leasehold and sublease hold rights as acceptable forms of security, particularly in urban and peri-urban development zones where leasehold tenure predominates. The absence of registration, conversely, exposes parties to significant legal and financial risks, including unenforceability, forfeiture of rights, and inability to obtain credit.
The practical steps required to comply with the statutory framework are clear. Firstly, parties must ensure that any sublease agreement with a term of at least three years, whether fixed or by renewal, must be drafted in compliance with the Deeds Registry Act. Secondly, consent must be sought from the Commissioner of Lands prior to lodgment. Lastly, the agreement must be lodged with the Deeds Registry within three months of obtaining such consent.
In conclusion, the registration of long-term subleases in Lesotho is not merely a procedural safeguard but a substantive requirement with critical implications for legal validity, enforceability, and commercial utility. The ruling in Molomo Filing Station v Mendi Group has reinforced the imperative of registration by confirming that non-compliance results in nullity. It is incumbent upon parties entering into sublease agreements of three years or more to adhere to the statutory requirements to safeguard their interests and enable access to mortgage financing. As Lesotho’s real estate and development sectors evolve, compliance with these legal provisions will remain central to securing lawful, credible, and bankable sublease arrangements.