1. Legal Aspect of Lease and Related Principles-Dec5

8/15/2019 1. Legal Aspect of Lease and Related Principles-Dec5

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LEGAL ASPECT OF LEASEAND RELATED

PRINCIPLES

Prepared by: Atty. Arlyn Joy C. Allosa-Alaba, REA, REB



Definition of Lease

It is a consensual, bilateral, onerous,and co utati!e contract by "#ic# oneperson binds #i self to $rantte porarily t#e use of a t#in$ or t#erenderin$ of so e ser!ice to anot#er"#o underta%es to pay so e rent,

co pensation, or price.



Kinds of Lease Lease of t#in$s &"#et#er of personal or

real property Lease of ser!ice & includes #ouse#old

ser!ice, contract of labor and co oncarriers

Lease of "or% & s#ould be 'contract for a

piece of "or%()



Lease of things de ned (Art 1643,NCC)

In t#e lease of t#in$s, one of t#e partiesbinds #i self to $i!e to anot#er t#een*oy ent or use of a t#in$ for a pricecertain, and for a period "#ic# ay bedefinite or indefinite. +o"e!er, no leasefor ore t#an ninety-nine years s#all be

!alid.



Characteristics or Requisites for lease ofthings

It is consensual It is a principal contract It is no inate Purpose is to allo" en*oy ent or use of

a t#in$ #e sub*ect atter ust be "it#in t#e

co erce of an



aracter st cs orRequisites for lease of

things #e purpose to "#ic# t#e t#in$ "ill be

de!oted s#ould not be i oral #e contract is onerous

#e rent ust not be fictitious or no inal, ot#er "ise,t#ere is a possibility t#at t#e contract is one ofco odatu

#e rent ust be capable of deter ination#e rent ay be in for of products, fruits, construction.

#e period is te porary



Characteristics or Requisites forlease of things

#e period is eit#er definite or indefiniteIf no ter is fi ed, "e s#ould apply Art. /01 and Art.

/02, 3CCIf a ter is fi ed, but t#e ter is indefinite, as "#en t#etenant ay use for as lon$ as #e desires, t#e court "ill fit#e ter under t#e la" of 4bli$ation and Contracts.

#e lessor need not be t#e o"ner



Rent e ned

Rent is t#e co pensation eit#er in oney, pro!isions,c#attels, or labor, recei!ed by t#e lessor fro t#e

lessee .



Lease Sale

. 4nly use or en*oy ent istransferred

1. ransfer is te porary

5. Lessor need not be t#e o"ner

6. #e price of t#e ob*ect,distin$uis#ed fro t#e rent, isusually not entioned.

. 4"ners#ip is transferred

1. ransfer is per anent

5. 7eller ust be t#e o"ner at t#eti e t#e property is supposed to be

deli!ered6. 8sually, t#e sellin$ price is

entioned



Lease Simple loan

. Lessor does not lose o"ners#ip

1. Relations#ip is one of lessor andlessee

5. 3ot $o!erned by t#e usury la"

6. If "#at is leased is real property forore t#an one year, t#e statute of

frauds ust be co plied "it#

9. Refers to real and personalproperty

. Lender loses o"ners#ip

1. Relations#ip is one of obli$or andobli$ee

5. o!erned by t#e usury la"

6. 3ot $o!erned by t#e statute offrauds

9. Refers only to personal property



Lease Commodatum

. 4nerous contract

1. 3ot essentially personal inc#aracter, #ence ri$#t ay betrans itted to #eirs

5. Consensual contract

. #is is essentially $ratuitous; ift#ere is a price or rent, t#econtract ceases to be aco odatu

1. Personal in c#aracter, t#usdeat# of eit#er bailor or baileeends t#e co odatu

5. Real contract re<uires deli!eryfor perfection



Basis Usufruct Lease

As to cause

As to repairs

As to ta es

As to ot#er t#in$s

9. #e o"ner is ore orless passi!e, and #eallo"s t#e usufructuary

to en*oy t#e t#in$ $i!enin usufruct

/. #e usufructuary #ast#e duty to a%e t#eordinary repairs

2. #e usufructuary paysfor t#e annual c#ar$esand ta es on t#e fruits

0. A usufructuary aylease t#e property itselfto anot#er

9. #e o"ner or lessor isore or less acti!e, and

#e a%es t#e lessee

en*oy

/. #e lessee $enerally#as no duty to pay forrepairs

2. #e lessee $enerallypays no ta es

0. #e lessee cannotconstitute a usufruct ont#e property leased



L!A"! #$ R%RAL AN %R&ANLAN "

Rural Lands &Product-Producin$ lands)Re$ardless of site, if t#e principal purpose is to

obtain products for t#e soil, t#e lease is of rurallands. Lesee is interested in soil products.

8rban Lands &3on-product producin$ lands)lands leased principally for purposes of residence

are called urban lands.



'ho are disquali ed to eco elessees* +usband and "ife &Art 6?@, 3CC) Persons relati!ely incapacitated to buy &Art

6? , 3CC)uardians

A$ents Ad inistratorsPublic 4fficers and e ployeesJustices, *ud$es, prosecutin$ attorneys, cler% ofcourts and ot#er officers and e ployees connected"it# t#e ad inistration of *ustice, la"yers4t#ers dis<ualified by la"



Registration +ith the R#

Personal property: 3o Real property: es Proper aut#ority is re<uired for t#e

follo"in$ persons:+usband, "it# respect to t#e parap#ernalproperty of t#e "ife

at#er or $uardian, "it# respect to t#e

property of t#e inor or "ard>ana$er or ad inistrator of con*u$al property;of co-o"ners#ip; of state patri onial property



Assign ent of the Lease Lessee cannot assi$n t#e lease "it#out

t#e consent of t#e lessor, unless t#ere isa stipulation to t#e contrary.



"u leasing eneral rule : subleasin$ is allo"ed

unless t#ere is an e press pro#ibition,"it#out pre*udice to #is responsibility for

t#e perfor ance of t#e contract to"ardt#e lessor.



istinction et+een su leasingand assign ent In subleasin$, t#e lessee retains an interest in t#e

lease, #e re ains a party of t#e contract. #ile inassi$n ent, t#e lessee a%es an absolute transfer of#is interest as lessee, t#us, #e dissociates #i self

fro t#e ori$inal contract of lease

#e sub-lessee does #a!e any direct action a$ainstt#e lessor "#ile an assi$nee #as a direct action

a$ainst t#e lessor

Can be done e!en "it#out t#e per ission of t#elessor & unless t#ere be an e press pro#ibition)



Lia ilit- of the su lessee to thelessor Directly liable to t#e lessor for acts

pertainin$ to t#e use and preser!ation oft#e property

7ubsidiarily liable to t#e lessor for any rentdue fro t#e lessee but not beyond t#ea ount of rent due fro #i

3ote: ad!ance pay ent of rent by t#e sub-lessee is disre$arded in so far as t#e lessoris concerned e cept if *ustified by t#ecusto of t#e place



!.ects of e/iction of the lessee

7ub-lessee s#ould also be ousted e!enif not sued in t#e e*ect ent case.

In cases "#ere t#e lessee andsublessee are e!icted, and t#e lesseeappeals, t#e sublessee cannot bee!icted



Lessor0s +arranties A$ainst e!iction +idden defects Reduction in t#e price s#all be ade in

proportion to t#e ti e durin$ "#ic# t#elessee en*oyed t#e t#in$.



estruction of the thing leased

otal destructionLease is e tin$uis#ed

Partial destructionLessee ay c#oose bet"een proportionalreduction and rescission of t#e lease



# ligation of the Lessee o pay t#e lease price &rent) o use t#e t#in$ leased as a dili$ent

fat#er of a fa ily, de!otin$ it to t#e usestipulated or if t#ere is no stipulation,t#at "#ic# ay be inferred fro t#enature of t#e t#in$ leased, accordin$ to

t#e custo of t#e place o pay t#e e penses for t#e deed oflease



'hen a- a lessee sus enda- ent of rent*

If t#e lessor fails to a%e t#e necessaryrepairs,

If t#e lessor fails to aintain t#e lesseein peaceful and ade<uate en*oy ent oft#e property leased.



2i e for re airs If less t#an 6@ days, t#e lessee cannot as% for

reduction of rent, or for recission.+e is also obli$ed to tolerate t#e "or% e!en if it is !eryannoyin$ to #i unless t#e place beco esunin#abitable, #e can as% for rescission.

If 6@ days or ore, lessee can as% forproportionate reduction &includin$ t#e first 6@

days)Rescission is a!ailable in bot# cases, if t#e ainpurpose is to pro!ide a d"ellin$ and t#e placebeco es unin#abitable.



uties of Lessee concerning%sur ation and Re airs

o notify t#e lessor of usurpation orunto"ard acts

o notify t#e lessor of need for repairs



Consequences if lessor fails toa e the urgent re airs

Lessee, in order to a!oid i inentdan$er, ay order t#e repairs at t#eLessor s cost

Lessee ay sue for da a$es Lessee ay suspend t#e pay ent of t#e

rent



ut- of the lessee at the end ofthe lease contract Return t#e property, eit#er p#ysically or

constructi!ely, in t#e sa e condition as#e recei!ed it e cept lost and

i pair ent by lapse of ti e, ordinary"ear and tear, and ine!itable cause orfortuitous e!ent



'hen is lease su osed to end*

8pon a$ree ent of t#e deter inate ti eof ter ination.

If no period is fi ed, it "ill depend on t#eode of pay ent

or rural lands As a$reedDepends on t#e ti e for t#e planted crop tobe #ar!ested



'hat is i lied ne+ lease ortacita reconduccion * #at "#ic# arises if at t#e end of t#e

lease, t#e lessee s#ould continueen*oyin$ t#e t#in$ lease for 9 days "it#

t#e ac<uiescence of t#e lessor-unless anotice to t#e contrary #ad beenpre!iously $i!en by eit#er party



!.ects of the i lied ne+ lease

Period is not stated in t#e ori$inalcontract but "ould depend on t#e odeof pay ent of lease.

4t#er ter s of t#e ori$inal lease arere!i!ed.



'hat if the lessor o 5ects to thecontinued ossession* Lessee beco es a possessor in bad

fait# +e ay be co pelled to:

o forfeit t#e construction "it#out inde nity;or Buy t#e land re$ardless of "#et#er or not its!alue is considerably ore t#an t#e !alue oft#e construction; or

o de olis# t#e construction at #is e pense.



Requisites for the lessee e consideredas a ossessor in ad faith

#e contract of lease #as e pired.

#e lessee continues en*oyin$ t#e t#in$ leased.

#e lessor #as ob*ected to t#is en*oy ent.



Causes for e5ect ent of thelessee #en t#e period a$reed upon, or t#at "#ic# is fi ed for t#e

duration of leases #as e pired;

Lac% of pay ent of t#e price stipulated;

Giolation of any of t#e conditions a$reed upon in t#econtract;

"#en use not in accordance "it# t#e stipulation "#ic#

causes deterioration.

3ote: e*ect ent of tenant of a$ricultural lands is $o!ernedby special la"s.



Place and time of payment of theRent

As to place A$reed stipulationIf none, do icile of t#e lessee

As to ti e A$reed stipulation

If none, local custo s



" ecial 7ro/isions for leases ofRural lands Losses

4n account of sterility of land3o reduction

Due to fortuitous e!ents4rdinary fortuitous e!ents

3o reduction

E traordinary fortuitous e!entsIf ore t#an H of t#e fruits is lost, t#ere is reductionIf H or less, no reduction



" ecial 7ro/isions for leases ofRural lands (cont) Duration of lease

i ed stipulationIf none, ti e necessary to $at#er fruits in one year orif #ar!ested only once, duration necessary to $at#erit e!en if suc# ti e be ore t#an t"o or ore years.

Land tenancy on s#ares s#all be $o!erned by:7pecial la"s7tipulations of t#e partyPro!isions on partners#ipsCusto of t#e place



" ecial 7ro/isions for leases ofRural lands (cont8) enant on s#ares cannot be e*ected e cept in

cases specified by la".Just Causes &RA ??, A$ricultural enancy La"

Bona fide intention of t#e land#olders to culti!ate t#eland personally by #i self or t#ru t#e e ploy ent offar ac#inery and e<uip entViolations or failure to comply with the terms andconditions of the contract or of the law Tenant’s failure to pay the agreed rental or deliver thelandholder’s share, except when cause by fortuitousevents of force majeureWhen tenant uses the land for a purpose other that thatspecified by agreement of the parties



" ecial 7ro/isions for leases ofRural lands (cont8)

#en s#are tenant fails to follo" t#ose pro!en farpractices "#ic# "ill contribute to"ards proper careof t#e land and increase a$ricultural production.

enant s ne$li$ence caused serious in*ury to t#eland "#ic# "ill i pair its producti!e capacityCon!iction by a co petent court of a tenant or any

e ber of #is i ediate fa ily or far #ouse#oldof a cri e a$ainst t#e land#older or a e ber of #isi ediate fa il



" ecial 7ro/isions for leases of%r an lands Repairs

7pecial stipulationIf none, custo of t#e placeIn case of doubt, construed a$ainst t#e lessor

Duration As a$reedIf none, if paid daily, day to day; if paid "ee%ly, "ee% to "ee%, if paid ont#ly,

ont# to ont#, and if paid yearly, year to year

or lon$ stayin$ lessee, t#e court ay $i!e lon$er period

Daily rent F if stay is o!er one ont#ee%ly rent F if stay is o!er si ont#s

>ont#ly rent F if stay is o!er one year

If furniture are also lease F duration is t#e sa e of t#e leased



Rent control la+ of 9::;(RA ;6<3) Increase in rent

3ot ore t#an 2 in one year if occupied by t#e sa elesseeIn cases of boardin$ #ouse, dor itories, roo s, bedspaces

for students - no increase for ore t#an once a year Co!era$e

3CR and #i$#ly urbani=ed citiesRent F P to P @,@@@.@@

4t#er placesRent F P to P9,@@@.@@

Aut#ority to continue rental re$ulation-di!ul$ed to t#e +8DCC



Rental pay ento be paid in ad!ance "it#in t#e first fi!e

days of current ont# or at t#e be$innin$ of

t#e lease or as to stipulatedLessor not allo"ed to de and for ore t#anone ont# ad!ance and for ore t#an t"o

ont#s deposit, "#ic# deposit is to be

deposited in t#e ban% under t#e na e of t#elessor.



Pro#ibition a$ainst assi$n ent,subleasin$ e!en of a part of t#e leasedresidential unit includin$ acceptance of

boarders or bedspacers "it#out t#e"ritten consent of t#e lessor.



Grounds for Judicial Ejectment: (a !ssignment of lease or subleasing of residential units in whole or in part,

including the acceptance of boarders or bedspacers, without the writtenconsent of the owner"lessor#

(b !rrears in payment of rent for a total of three ($ months% &rovided, That inthe case of refusal by the lessor to accept payment of the rent agreed upon,

the lessee may either deposit, by way of consignation, the amount in court, orwith the city or municipal treasurer, as the case may be, or barangaychairman, or in a ban' in the name of and with notice to the lessor, within one( month after the refusal of the lessor to accept payment) The lessee shallthereafter deposit the rent within ten ( * days of every current month)

+ailure to deposit the rent for three ($ months shall constitute aground for ejectment) The lessor, upon authority of the court in case ofconsignation or upon joint affidavit by him and the lessee to be submitted tothe city or municipal treasurer or barangay chairman and to the ban' wheredeposit was made, shall be allowed to withdraw the deposits#



(c egitimate need of the owner"lessor to repossess his or her property for his or herown use or for the use of any immediate member of his or her family as a residentialunit% &rovided, however, That the lease for a definite period has expired% &rovided,further, that the lessor has given the lessee the formal notice three ($ months inadvance of the lessor’s intention to repossess the property and% &rovided, finally, thatthe owner"lessor is prohibited from leasing the residential unit or allowing its use by athird party for a period of at least ( year from the time of repossession#

(d -eed of the lessor to ma'e necessary repairs of the leased premises which is thesubject of an existing order of condemnation by appropriate authorities concerned inorder to ma'e the said premises safe and habitable% &rovided, That after said repair,the lessee ejected shall have the first preference to lease the same premises%&rovided, however, That the new rent shall be reasonably commensurate with theexpenses incurred for the repair of the said residential unit and% &rovided, finally, Thatif the residential unit is condemned or completely demolished,the lease of the new building will no longer be subject to the aforementioned first

preference rule in this subsection# and

(e .xpiration of the period of the lease contract)



Prohibition Against Ejectment byReason of Sale or Mortgage. -o lessor or his successor/in/interest

shall be entitled to eject the lessee uponthe ground that the leased premises

have been sold or mortgaged to a third person regardless of whether the leaseor mortgage is registered or not)



Penalties. ! fine of not less than Twenty/five

thousand pesos (&21,***)** nor morethan +ifty thousand pesos (&1*,***)**

or imprisonment of not less than one (month and one ( day to not more thansix (3 months or both shall be imposedon any person, natural or juridical, foundguilty of violating any provision of this

!ct)



#is act "as supposed to e pire on Dece ber 1@ 5 but "ase tended to Dece ber 1@ 9 t#rou$# t#e initiati!e of GP Binay

Basis: 'Preli inary results of t#e study s#o"ed t#at about .9 illion

#ouse#olds or 2.1 percent of t#e total 1 .9 illion #ouse#oldsnation"ide are renters. 4f t#is, ?2 percent pay P @,@@@ and belo"

ont#ly,( Binay said. In 1@ 1, t#e ont#ly a!era$e fa ily inco e of renters in t#e country

"as P15,?/0, "it# P12,16/ for 3CR and P1@,2?6 for ot#er areas.a ilies in 3CR spend about 1.6 percent of t#eir inco e for #ouse

rent.

7en. Recto is supposed to file a bill for its e tension up to 1@ 2. noupdate yet.



2han -ou= >a/e a nice

da-=

1. Legal Aspect of Lease and Related Principles-Dec5

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Transcript of 1. Legal Aspect of Lease and Related Principles-Dec5