ATENEO CENTRAL BAR OPERATIONS 2007

Civil Law
SUMMER REVIEWER
LEASE
CONTRACT OF LEASE a contract by which
one person binds himself to grant temporarily,
the use of a thing or the rendering of some
service to another who undertakes to pay
some rent, compensation, or price.

CHARACTERISTICS: (lease of things)

1. Consensual
2. Principal contract
3. Nominate
4. Subject matter must be within the commerce of
man
5. Purpose should not be minimal
6. Onerous
7. Period is temporary
8. Period may be definite or indefinite
9. Lessor need not be the owner
RENT the compensation either in money,
provisions, chattels or labor, received by the
lessor from the lessee
Requisites:
1. must not be fictitious or nominal otherwise the
contract is considered essentially gratuitous
2. must be capable of determination
3. may be in the form of products, fruits,
construction; as long as it has value
LEASE DISTINGUISHED FROM USUFRUCT
LEASE
USUFRUCT
Ownership on the part Ownership of the thing on
of the lessor is not the part of the grantor is
necessary to constitute necessary to constitute a
a contract of lease
usufruct
It is generally a It is always a real right
personal right and is a
real right only by QuickTime and a
TIFF (Uncompressed) decompressor
exception
are needed to see this picture.
It is limited to the use It includes all possible
specified
in
the uses and enjoyment of
contract
the thing
Lessor places and Owner
allows
the
maintains the lessee in usufructuary to use and
the
peaceful enjoy the property
enjoyment of the thing
Its term is generally for Its term may be for an
a definite period
indefinite period

It may be created by
contract as a general
rule
Lessee has not duty to
make repairs
Lessee has not duty to
pay taxes
Lessee
cannot
constitute a usufruct of
the property leased

It may be created by law,

contract, last will or
prescription
Usufructuary has duty to
make repairs
Usufructuary has duty to
pay taxes
Usufructuary
may
constitute a sublease

WHEN LEASE OF REAL PROPERTY IS REAL

RIGHT
Generally, a lease of real property is a personal
right.
Exceptions:
1. if it is for more that one year and to be
enforceable it must be in writing
2. if it is registered with Registry of Property,
regardless of its period
EFFECTS IF LEASE OF REAL PROPERTY IS
NOT REGISTERED:
1. the lease is not binding on third persons;
2. such third person is allowed to terminate
the lease in case he buys the property
from the owner-lessor;
3. actual knowledge of existence and
duration of lease, is equivalent to
registration;
4. stranger knows of the existence of the
lease, but was led to believe that the
lease would expire soon or before the new
lease in favor of him begins, the stranger
can still be considered innocent.
KINDS OF LEASE
1. Lease of things or properties whether
immovable or movable property
one of the parties binds himself to give to
another the enjoyment or use of a thing
for a price certain
for a period which may be definite or indefinite
but in no case will the period exceed 99 years.
WHAT CAN BE THE SUBJECT OF A LEASE
- only things which are within the commerce of
man; lease of properties belonging to the
public domain cannot be proper subjects of
lease; such contracts are void.

Adviser: Dean Cynthia Roxas-Del Castillo; Heads: Joy Marie Ponsaran, Eleanor Mateo; Understudies: Joy Stephanie
Tajan, John Paul Lim

Civil Law Summer Reviewer

ATENEO CENTRAL BAR OPERATIONS 2007
PERSONS
DISQUALIFIED
TO
BECOME
LESSEES:
(a) husband and wife cannot lease to each other
their
separate
properties
(exception:
separation of property)
(b) those
disqualified
due
to
fiduciary
relationship
- guardian: ward
- agent: principal
- executor & administrators
- public officer: state property
- justices, judges: property under
litigation
- others disqualified by law

NOTE: - Owner has the right t fix the rent

because the contract is consensual and
not imposed by law
- Increasing the rent is NOT an absolute
right of the lessor
- If the rent is fixed for the first time, courts
cannot interfere; but if it is a renewal, the
courts can settle the disagreements
2. Lease of work which refers to contract for
a piece of work
- one of the parties binds himself to produce a
result out of his work or labor and the other
party binds himself to pay a remuneration
therefor.

LEASE BY FILIPINOS
- may lease lands of public domain with an area
of 500 has. and may acquire not more than 12
has.

DUTIES
OF
CONTRACTOR
WHO
FURNISHES WORK & MATERIAL:
(a) duty to deliver
(b) duty to transfer ownership
(c) duty to warrant eviction and hidden
defects

LEASE BY CORPORATIONS
- at least 60% Filipino-owned, may lease lands of
public domain for a period of 25 years, renewable
for not more than 25 years; the area not to
exceed more than 1,000 has. [one thousand
hectares]
RULE ON LEASE OF THINGS WHEN LESSEE
IS AN ALIEN
(a) 99-year limit applies to aliens as long as it is
a lease of personal property
(b) aliens CANNOT lease public lands, and
cannot acquire private lands
except through succession
(c) if lease of real property (private lands),
maximum of 25 years renewable for another
25 years (P.D. 713)
(d) under the Investors Lease Act of 1995, the
25-year period was
extended to 50 years renewable for another
25 years provided the following conditions
are met:
i. lessee must make investments
ii. lease is approved by DTI
iii. if terms are violated, DTI can
terminate it
NOTE: the ILA did not doQuickTime
away with
and a P.D. 713, under
TIFF (Uncompressed) decompressor
ILA the consent of DTI
required
while in P.D. 713 it
are is
needed
to see this picture.
is not.
FORM OF CONTRACT OF LEASE OF THINGS
- may be made orally but if the lease of real
property is for more than one year, it must
be in writing under the statue of frauds [still
valid but unenforceable]

REMEDY OF EMPLOYER IN CASE OF

DEFECTS:
- ask contractor to remove the defect or
to execute another work; if contractor
fails or refuses, employer can ask
another at the contractors expense
3. Lease of service
-one party binds himself to render some
service to the other party consisting his own
free activity of labor, and not its result and the
other party binds himself to pay a
remuneration therefor.
3 KINDS:
a. household
b. contract of labor
c. common carriers
CONTRACT OF
PIECE OF WORK
(Locatio Operis)
The object of contract
is the result of the
work
without
considering the labor
that produced it
If the result promised
is not accomplished,
the
lessor
or
promissor
is
not
entitled
to
compensation

CONTRACT OF
LEASE OF SERVICE
(Locatio Operarum)
The object of contract is
the service itself and
not the result which it
generates
Even if the result
intended is not attained,
the services of the
lessor must still be paid

Page 155 of 297

Civil Law Summer Reviewer

ATENEO CENTRAL BAR OPERATIONS 2007
OBLIGATIONS OF THE LESSOR (Art. 1654)
1. to deliver the thing which is the object of the
contract in such condition as to render it fit for the
use intended;
2. to make on the same during the lease all the
necessary repairs in order to keep it suitable for
the use to which it has been devoted, unless
there is a stipulation to the contrary;
3. to maintain the lessee in the peaceful and
adequate enjoyment of the lease for the entire
duration of the contract.
OBLIGATIONS OF THE LESSEE (Art. 1657)
1. pay the price of the lease according to the terms
stipulated;
2. use the thing leased as a diligent father of a
family devoting it to the use stipulated, and in the
absence of stipulation, to that which may be
inferred from the nature of the thing leased,
according to the custom of the place;
3. pay the expenses for the deed of lease.

Subleasing
is Assignment
is
not
allowed unless there allowed
unless
the
is
an
express lessor gives his consent
prohibition
RESPONSIBILITIES OF A SUBLESSEE TO
THE LESSOR:
1. for all acts which affect the use and
preservation of the thing leased
2. for any rent due to the lessor from the
lessee which the latter failed to pay
- the lessor must collect first form the
lessee
- if the lessee is insolvent, the sublessee
becomes liable (subsidiary liability)

GROUNDS FOR EJECTMENT

1. when the period agreed upon or that which is
fixed for the duration of leases (see 1682, 1687)
has expired;
2. lack of payment of the price stipulated;
3. violation of any of the conditions agreed upon in
the contract;
4. when the lessee devotes the thing leased to any
use or service not stipulated which causes the
deterioration thereof.
5. (1657, par. 2)

SUBLEASE
a lessee may sublease the thing unless there is
an express prohibition to do so
if the prohibition to sublease is not express but
only implied, the sublease will still be allowed
remedy of lessor if lessee violates prohibition:
action for rescission of the lease and may seek
for damages
duration of sublease cannot be longer than that
of the lease to which it is dependent

DISTINGUISH
A
SUBLEASE
ASSIGNMENT OF A LEASE
QuickTime and a

FROM

AN

TIFF (Uncompressed) decompressor

to see this picture.

are needed
SUBLEASE
ASSIGNMENT
Lessee remains a Lessee is disassociated
party in the contract
from
the
original
contract of lease
Sublessee does not Assignee has a direct
have
any
direct action
against
the
action against the lessor,
there
being
lessor
novation

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