A Contract to Sell refers to an agreement between a seller and a buyer.

The contract shows that the seller promises to sell

something to the buyer and the buyer also promises the seller the buy the property. However, the contract does not
instantly transfer the right to the buyer even when this contract is signed. There are still conditions that have to be fulfilled
by one or both parties before transfer of ownership can take place. The Deed of Absolute sale will only be executed once
the conditions stated in the Contract to Sell have been met.

CONTRACT TO SELL

KNOW ALL MEN BY THESE PRESENTS:

This Contract to Sell is made and executed and entered into by:

Name of Seller, of legal age, Filipino, single/married to Name of the Spouse of Seller, with residence address at Postal
Address of the Seller in the Phiilppines, hereinafter referred to as the SELLER;

-AND-

Name of Buyer, of legal age, Filipino, single/married to, Name of Spouse of Buyer and with residence and postal address
at Address of the Buyer in the Phiippines, hereinafter referred to as the BUYER;

WITNESSETH;

WHEREAS, the SELLER is the registered owner of a parcel of land with improvements located at Address of the
property for sale in the Philippines and covered by Transfer Certificate of Title No. 000000 containing a total area of LAND
AREA IN SQUARE METERS (000sqm) SQUARE METERS, more or less, issued by the Registry of Deeds of City/Municipality;

WHEREAS, the BUYER has offered to buy and the SELLER has agreed to sell the above mentioned property under the
terms and conditions herein below set forth;

NOW THEREFORE, for and in consideration of the total sum of THE CONTRACT PRICE FOR THE PROPERTY FOR SALE
(P0,000,000.00) Philippine Currency, and of the covenants herein after set forth the SELLER agrees to sell and the BUYER
agree to buy the aforesaid property subject to the following terms and conditions:

The total consideration shall be THE CONTRACT PRICE FOR THE PROPERTY FOR SALE (P0,000,000.00) Philippine Currency,
payable through CASH/MANAGERS’ CHECK/WIRE TRANSFER as follows:

1.1. The amount of THE EARNEST MONEY DEPOSIT (P000,000.00) representing earnest money deposit shall be payable
upon execution of this Contract to Sell and shall be considered part of the total Contract price.

1.2. The remaining balance amounting to THE REMAINING BALANCE (P0,000,000.00) PESOS Philippine Currency, shall be
payable within TIME FRAME upon execution of this Contract to Sell.

1.3 In case the BUYERS could not fulfil any of their obligation stated in this Contract To Sell, the earnest money shall be
forfeited in favor of the SELLER.

2. Al pending utility bills, if any, Real Estate Tax up to the time of sale, Capital Gains Tax, Documentary Stamp Tax, shall
be for the account of the SELLER.

3. Notarization fees, Registration Fee, Transfer Fees and all miscellaneous fees and expenses to transfer the certificate of
title in the name of the new owner shall be for the account of the SELLER;
4. Possession to the subject property shall be delivered by the SELLER to the BUYER upon full payment of the total
consideration;

5. ADDITIONAL TERMS AND CONDITIONS SUCH AS Delivery of the property shall be given by the SELLER to the BUYER
devoid of any religious artefacts, personal belongings and effects, tenants and any toxic/radioactive substances. Etc.

6. TERMS AND CONDITIONS MAY VARY ON A CASE-TO-CASE BASIS. CONTRACTING PARTIE MAY ADD, SUBTRACT, EDIT,
ANY OR ALL PARTS OF THIS CONTRACT TO SELL AS THEY SEE FIT

7. Upon full payment of the total price, the SELLER shall sign and execute a DEED OF ABSOLUTE SALE in favour of the
BUYER. The SELLER shall likewise execute and/or deliver any and all documents, including but not limited to the original
copy of Transfer Certificate of Title, Tax Declaration and all other documents necessary for the transfer of ownership from
SELLER to the BUYER.

8. In case the SELLER could not fulfil any of the obligations stated in this Contract to Sell, the BUYER shall be entitled to a
full refund plus 10% interest per month.

IN WITNESS WHEREOF, the parties have hereunto affixed their signatures, this_____ day of _______________________ 20________
at ___________________________________, Philippines.

___________________________________ ___________________________________

Printed Name and Signature of SELLER Printed Name and Signature of BUYER

SIGNED IN THE PRESENCE OF:

___________________________________ ______________________________________

Printed Name and Signature of 1st Witness Printed Name and Signature of 2nd Witness

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES)

_____________________________ ) SS.

BEFORE ME, a Notary Public for and in ________________________________________________________ personally appeared:

Name ID Number Date/Place Issued

Known to me and to me known to be the same persons who executed the foregoing instrument and acknowledged to
me that the same are their free act and voluntary deed.

This instrument, consisting of 2 pages, including the page on which this acknowledgment is written, has been signed on
the left margin of each and every page thereof by the concerned parties and their witnesses, and sealed with my notarial
seal.

WITNESS MY HAND AND SEAL on this ______day of _______________________________20__________

at_____________________________.
Notary Public

Doc. No. ……..;

Page No. …….;

Book No. …….;

Series of 20____.
An option contract is defined in the second paragraph of Article 1479 of the Civil Code: Article 1479. x x x An accepted
promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported
by a consideration distinct from the price.

Option contract or contract of sale? - A LAW EACH DAY

(KEEPS TROUBLE AWAY) By JOSE C. SISON

An option is a contract granting a privilege to buy and sell within an agreed time and at a determined price. It is a
separate and distinct contract which the parties may enter upon consummation of the option. It must be supported by a
consideration distinct from the price. The question that arose in this case is whether the parties had entered into a
contract of sale or only an option contract.

This transaction involves a house and lot owned by the spouses Leony and Vicky. The couple entered into a verbal
contract with Caridad, a balikbayan for the latter to purchase said house and lot for a consideration of $100,000 payable in
two payments of $40,000 on Dec. 4, 1984 and the balance of $60,000 on Jan. 5, 1985.

One week thereafter and shortly before Caridad left for the United States, she paid Leony and Vicky the amounts of $1,000
and P40,000 as earnest money inorder that the property may be reserved for her purchase, said earnest money to be
deducted from the purchase price.

Caridad was not able to pay the $40,000 on Dec. 4, 1984 nor the $60,000 on Jan. 5, 1985. It was only on Jan. 25, 1985 when
the period of payment had already expired that she paid to Vicky who was then in the US, the sum of $30,000 as partial
payment of the purchase price.

Subsequently on March 15, 1985, the spouses thru their lawyer wrote Caridad demanding payment of the balance of
$70,000. In said letter, the lawyer reiterated the verbal contract between Caridad and the spouses including the terms of
payment of the price. Not receiving any response the said lawyer wrote another letter to Caridad five months later or on
Aug. 8, 1985 informing her that she lost her option to purchase the property subject of the case and offered to sell her
another property.

This time Caridad, thru her lawyer already replied. She informed the couple that she is now ready to pay the remaining
balance to complete the sum of $100,000 the agreed amount as selling price.

Leony and Vicky, however, refused to accede to this offer of Caridad. They claimed that Caridad had already lost her
option over the property and her failure to exercise said option resulted in the forfeiture of any amount paid by her
pursuant to their letter of Aug. 8, 1985.

So Caridad filed a complaint against the spouses asking the court for the rescission of their contract and to order Vicky
and Leony to return the amounts she paid consisting of the earnest money of $1,000 and P40,000 as well as the $30,000
partial payment of the purchase price. Could Caridad recover the said amounts?

Yes. The letter of March 15, 1989 by Vicky and Leony through their lawyer reveal that the parties entered into a perfected
oral contract of sale and not an option contract.

A contract of sale is a consensual contract and is perfected at the moment there is a meeting of the minds upon the thing
which is the object of the contract and upon the price. As evidenced by the March 15, 1985 letter, all three elements of a
contract of sale are present in the transaction between Caridad and the spouses. Caridad's offer to purchase the house
and lot subject of the sale at a price of $100,000 was accepted by Vicky and Leony. Even the manner of payment of the
price was set forth in the letter. Earnest money in the amount of $1,000 and P40,000 was already received by the couple.
Under Art. 1482 of the Civil Code, earnest money given in a sale transaction is considered part of the purchase price and
proof of the perfection of the sale.
Caridad's failure to pay the amount of $40,000 and $60,000 on or before Dec. 4, 1984 and Jan. 5, 1985 respectively was a
breach of her obligation under Art. 1191 of the Civil Code. So Vicky and Leony should have sued her in court for either
specific performance or rescission of the contract. They could not just unilaterally and extrajudicially rescind the contract
of sale since there is no express stipulation in the contract authorizing them to do so. It was a mistake for them to believe
that Caridad had lost her option over the property when she failed to pay the remaining balance of $70,000 pursuant to
their Aug. 8, 1985 letter. Accordingly, Caridad acted well within her rights when she attempted to pay the remaining
balance of $70,000 to complete the sum owed in the amount of $100,000 as the contract was still subsisting at the time.
When the couple refused to accept said payment and deliver the house and lot, rescission of the contract is in order. The
power to rescind obligations is implied in reciprocal ones in case one of the obligors should not comply with what is
incumbent upon him. Rescission creates the obligation to return the things which were the object of the contract together
with their fruits and the price with interest (Spouses Co vs. Court of Appeals et. al. G.R. No. 112330 Aug. 17, 1999).

An option contract, or simply option, is defined as "a promise which meets the requirements for the formation of
a contract and limits the promisor's power to revoke an offer." An option contract is a type of contract that protects an
offeree from an offeror's ability to revoke their offer to engage in a contract.
Philippine Legal Forms: Deed of Absolute Sale

A real estate purchase will not be complete without the deed of absolute sale. This legal form transfers property to one
party including property rights. The deed serves as a proof that the transfer occurred. Once you have signed the
documents, it means you have fully understood that all rights to the property will be transferred from the seller to the
buyer.

It is also important to note that the deed of absolute sale should have no stipulated conditions attached other than the
buyer's payment.

You need to have an independent surveyor or judge that will determine the property's current market value to prevent
over-paying. You will also have to make sure that the document is legally binding and should vividly describe the property
that will be transferred. A sample of deed of absolute sale is provided below:

DEED OF ABSOLUTE SALE

KNOW ALL MEN BY THESE PRESENTS:

This DEED OF ABSOLUTE SALE is made, executed and entered into by:

(NAME OF SELLER), of legal age, single/married to (Name of spouse if any), Filipino, and with residence and postal
address at (Address of Seller), hereinafter referred to as the SELLER

-AND-

(NAME OF BUYER), Filipino and with residence and postal address at (Address of Buyer), hereinafter referred to as the
BUYER.

WITNESSETH;

WHEREAS, the SELLER is the registered owner of a parcel of land with improvements located at (Address of property
to be sold) and covered by Transfer Certificate of Title No. (TCT Number) containing a total area of (Land Area of Property
in Words) (000) SQUARE METERS, more or less, and more particularly described as follows:

TRANSFER CERTIFICATE OF TITLE NO. 0000

"(Insert the technical description of the property on the title) Example: A PARCEL OF LAND (Lot 20 Blk 54 of
consolidation subdivision plan (LRC) Pcs-13265, being a portion of the consolidation of Lots 4751-A and 4751-B (LRC)
Psd-50533, Lot 3, Psd-100703, Lot 1, Psd-150980, LRC Rec. Nos. Nos. N-27024, 51768, 89632, N-11782, N-13466, and
21071 situated in the Bo. of San Donisio, Mun of Paranaque, Prov of Rizal, Is. of Luzon. Bounded on NE., point 4 to 1 by
Road Lot 22, on...to the point of beginning; containing an area of (280) square meters more or less..."

WHEREAS, the BUYER has offered to buy and the SELLER has agreed to sell the above mentioned property for the
amount of (Amount in words) (P 000,000.00) Philippine Currency;

NOW THEREFORE, for and in consideration of the sum of (Amount in words) (P 000,000.00) Philippine Currency, hand
paid by the vendee to the vendor, the SELLER DO HEREBY SELL, TRANSFER, and CONVEY by way of Absolute Sale unto the
said BUYER, his heirs and assigns, the certain parcel of land together with all the improvements found thereon, free from
all liens and encumbrances of whatever nature including real estate taxes as of the date of this sale.

(NAME OF SELLER) (NAME OF BUYER)

 Seller Buyer

WITH MARITAL CONSENT:

________________________ _________________________

Name of Seller's Spouse Name of Buyer's Spouse

SIGNED IN THE PRESENCE OF:

__________________________ ____________________________

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES)

_____________________________ ) SS.

BEFORE ME, a Notary Public for and in the City of ___________________, personally appeared:

Name CTC Number Date/Place Issued

(Name of Seller) 10000000 Jan 15, 20__ / Angeles City

(Name of Buyer) 10000000 Jan 9, 20__ / Manila

Known to me and to me known to be the same persons who executed the foregoing instrument and acknowledged to
me that the same are their free act and voluntary deed.

This instrument, consisting of (__) pages, including the page on which this acknowledgment is written, has been signed on
the left margin of each and every page thereof by the concerned parties and their witnesses, and sealed with my notarial
seal.

WITNESS MY HAND AND SEAL on this ___day of __________________20__ at_______________.

Notary Public

Doc. No. ........;

Page No. .......;

Book No. .......;

Series of 20__.
Deed of Sale with Right to Repurchase

Sale With Pacto de Retro Transfer of Ownership

A sale with pacto de retro transfers the legal title to the vendee a retro. The essence of a pacto de retro sale is that the title
and ownership of the property sold are immediately vested in the vendee a retro, subject to the resolutory condition of
repurchase by a vendor a retro to repurchase the property within the period agreed upon by them, or, in the absence
thereof, as provided by law, vests upon the vendee a retro absolute title and ownership over the property sold by
operation of law. The failure of the vendee a retro to consolidate his title under Article 1607 of the New Civil Code does
not impair such title and ownership because the method prescribed thereunder is merely for the purpose of registering
and consolidating titles to the property. (Cadungog v. Yap, G.R. No. 161223, September 12, 2005).
Extinguishment of Sale
March 4, 2016law on sales

How is a sale extinguished?

This provision of the New Civil Code has laid down three instances on how a sale can be extinguished:

Art. 1600. Sales are extinguished by the same causes as all other obligations, by those stated in the preceding articles of this
Title, and by conventional or legal redemption. (1506)

What is conventional redemption?

The happening of conventional redemption is best defined under this provision:

Art. 1601. Conventional redemption shall take place when the vendor reserves the right to repurchase the thing sold, with
the obligation to comply with the provisions of Article 1616 and other stipulations which may have been agreed upon.
(1507)

*Conventional redemption isthe right which the vendor reserves to himself, to reacquire the property sold provided he
returns to the vendee the price of the sale, expenses of the contract, any other legitimate payments made therefore, the
necessary and useful expenses made on the thing sold and fulfills other stipulations which may have been agreed upon.

What is Pacto de Retro sale?

Pacto de Retro sale refers to the sale wherein the seller has the right to repurchase the subject matter or the property being
sold.The essence of a pacto de retro sale is that the title and ownership of the property sold transfers immediately to the
vendee a retro. However it is still subject to the resolutory condition of repurchase of the subject property by a vendor a
retro within the period agreed upon by them, or, in the absence thereof, as provided by law or else it would vests upon the
vendee a retro absolute title and ownership over the property sold by operation of law.

What is the redemption period for pacto de retro sale?

This period applies to conventional redemption and not to those contracts which involves a sale with a right of repurchase.
The period of redemption laid down by law is expressed in this provision:

Art. 1606. The right referred to in Article 1601, in the absence of an express agreement, shall last four years from the date
of the contract.

Should there be an agreement, the period cannot exceed ten years.

However, the vendor may still exercise the right to repurchase within thirty days from the time final judgment was rendered
in a civil action on the basis that the contract was a true sale with right to repurchase. (1508a)

*If there is an agreement: period agreed upon cannot exceed 10 years and in the absence of the period, 4 years from the
date of the contract. The vendor who fails to repurchase the property within the period agreed upon may, however, exercise
the right to repurchase within 30 days from the time final judgment was rendered in a civil action on the basis that the
contract was a true sale with right of repurchase.
 What is legal redemption?

Legal redemption is the right to be subrogated, upon the same terms and conditions stipulated in the contract, in the place
of one who acquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transferred
by onerous title. It must be exercised within thirty (30) days from the notice in writing by the vendor. This does not apply to
barter, donation, transmission of things by hereditary title, mortgage, lease.

What are the instances of legal redemption?

Under the Civil Code

1. Sale of co-owner of his share to a stranger

2. When a credit or other incorporeal right in litigation is sold
3. Sale of an heir of his hereditary rights to a stranger
4. Sale of adjacent rural lands not exceeding one hectare
5. Sale of adjacent small urban lands bought merely for speculation

Under special laws

6. An equity of redemption in cases of judicial foreclosures

7. A right of redemption in cases of extra-judicial foreclosures
8. Redemption of homesteads
9. Redemption of tax sales
10. Redemption by an agricultural tenant of land sold by the landowner

What is the time provided for the vendor a retro to redeem or repurchase a thing?

1. If there is no agreement as to the period for redemption- 4 years from date of contract
2. If there is agreed period, it must be done within the fixed period
3. If the parties agreed as to the period within which to repurchase but have not fixed a definite period,- 10 years from the
date of the contract to redeem but shall not extend beyond 10 years
4. Vendor a retro may still exercise his right to redeem within 30 days from the time of the final judgment on the basis that
the contract was a true sale with right to repurchase.

What is the rules for legal redemption by co-owner?

Art. 1620: A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any
of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a
reasonable one.

Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share
they may respectively have in the thing owned in common.

Requisites:

1. There is co-ownership
2. There is alienation of all or any of the shares
3. The sale was made to a stranger
4. The legal redemption was exercised before partition
 What is the rules for legal redemption by an adjacent owner?

Art. 1621: The owners of adjoining lands shall also have the right of redemption when a piece of rural land, the area of which
does not exceed one hectare, is alienated, unless the grantee does not own any rural land.

This right is not applicable to adjacent lands which are separated by brooks, drains, ravines, roads and other apparent
servitudes for the benefit of other estates.

If two or more adjoining owners desire to exercise the right of redemption at the same time, the owner of the adjoining
land of smaller area shall be preferred; and should both lands have the same area, the one who first requested the
redemption.

Requisites:

1. Both lands are rural

2. The lands are adjacent to each other
3. There is an alienation
4. The land are is less than 1 hectare

Rights of adjacent owners:

1. Right of pre-emption which the preferential right to buy the urban land before the same is sold to a third person
2. In the event the urban land has been sold, the adjacent owners have the right of redemption.

What is the doctrine of caveat emptor (buyer beware)?

Requires the purchaser to be aware of the supposed title of the vendor and one who buys without checking the vendor’s
title takes all the risks and losses consequent to such failure. The actual possession by people other than the vendor should,
at least, put the purchaser upon inquiry. Site identification and survey are a must also.

An action for reconveyance is a legal and equitable remedy granted to the rightful owner of land which has been wrongfully
or erroneously registered in the name of another for the purpose of compelling the latter to transfer or convey the land to
him.

References

De Leon, H. (2010). Comments and Cases on Sales. Quezon City: Rex Printing Company, Inc.

New Civil Code of the Philippines

 DEED OF ASSIGNMENT AND TRANSFER OF RIGHTS

KNOW ALL MEN BY THIS PRESENTS:

This deed, made and entered into this ___ day of __________, 20__ at the City of Manila, by and between:

Juan de la Cruz, Filipino Citizen, of legal age, married to Juanita de la Cruz with residence and postal address
at 1234 Oak Lane, Standard Subdivision, Quezon City, hereinafter referred to as the "ASSIGNOR"

-and-

Pedro San Juan, Filipino Citizen, of legal age, married to Patricia San Juan with residence and postal address
at 123A Somerville Plaza Tower, 5678 Mahogany Avenue, Manila, hereinafter referred to as the "ASSIGNEE".

WITNESSETH that -

WHEREAS the ASSIGNOR is the buyer of a 2-bedroom unit, located at 18C, Grand Towers Condominium, 234 Taft
Avenue, Manila, with an area of SEVENTY EIGHT (78) SQUARE METERS more or less, covered by
Condominium Certificate Title No. 98765 of the register of Deeds of Manila, registered in the name of the Bank of the
Philippine Islands.;

WHEREAS, the ASSIGNOR has offered to assign all his rights, title and interest over the above unit, as referred in said
Contract to Sell and the ASSIGNEE hereby accepts the assignment in accordance with the terms herein set forth;

NOW, THEREFORE, for and in consideration of the foregoing premises and the sum of ONE MILLION PESOS
(1,000,000.00), PHILIPPINE CURRENCY, which the ASSIGNOR hereby acknowledged to have received from the ASSIGNEE,
the ASSIGNOR hereby assigns, transfers and conveys unto the ASSIGNEE, all his rights, title and interest to the
aforementioned property and and appurtenant interest in the Condominium project pursuant to this Agreement and the
ASSIGNEE by these presents hereby accepts the assignment and agrees to be bound by the terms and conditions of the
Contract to Sell and the rules and regulations, and restrictions pertaining to the said unit.

IN WITNESS WHEREOF, the parties have hereunto set their hands on the date and place first above written.

(Juan de la Cruz) (Pedro San Juan)

ASSIGNOR ASSIGNEE

Signed in the presence of:

__________________________ ___________________________

ACKNOWLEDGEMENT

Republic of the Philippines)

______________________) S.S
BEFORE ME, a notary for and in the City of Manila, personally appeared:

Name CTC Number Date/Place Issued

(Juan de la Cruz) 00000000 January 15, 20__ / Quezon City

(Pedro San Juan) 00000000 January 21, 20__ / Manila

known to me and to me known to be the same persons who executed the foregoing Deed of Assignment and transfer of
Rights and acknowledged to me that the same is their free and voluntary act and deed.

WITNESS MY HAND AND SEAL, on the date and place first above written.

Notary Public

Doc. No.______;

Page No. ______;

Book No.______;

Series of 20____.
The deed of assignment is the document used to transfer the contracting party's rights. The parties may also choose to
accomplish assignment via an assignment contract. In real estate, the deed of assignment often shows up in mortgage
transactions.

Deed of Assignment: Everything You Need to Know

A deed of assignment refers to a legal document that records the transfer of ownership of a real estate property from one
party to another.3 min read
A deed of assignment refers to a legal document that records the transfer of ownership of a real estate property from one
party to another. It states that a specific piece of property will belong to the assignee and no longer belong to the
assignor starting from a specified date. In order to be valid, a deed of assignment must contain certain types of
information and meet a number of requirements.

What Is an Assignment?

An assignment is similar to an outright transfer, but it is slightly different. It takes place when one of two parties who have
entered into a contract decides to transfer all of his or her rights and obligations to a third party and completely remove
himself or herself from the contract.

Also called the assignee, the third party effectively replaces the former contracting party and consequently assumes all of
his or her rights and obligations. Unless it is stated in the original contract, both parties to the initial contract are typically
required to express approval of an assignment before it can occur. When you sell a piece of property, you are making an
assignment of it to the buyer through the paperwork you sign at closing.

What Is a Deed of Assignment?

A deed of assignment refers to a legal document that facilitates the legal transfer of ownership of real estate property. It is
an important document that must be securely stored at all times, especially in the case of real estate.

In general, this document can be described as a document that is drafted and signed to promise or guarantee the transfer
of ownership of a real estate property on a specified date. In other words, it serves as the evidence of the transfer of
ownership of the property, with the stipulation that there is a certain timeframe in which actual ownership will begin.

The deed of assignment is the main document between the seller and buyer that proves ownership in favor of the seller.
The party who is transferring his or her rights to the property is known as the “assignor,” while the party who is receiving
the rights is called the “assignee.”

A deed of assignment is required in many different situations, the most common of which is the transfer of ownership of a
property. For example, a developer of a new house has to sign a deed of assignment with a buyer, stating that the house
will belong to him or her on a certain date. Nevertheless, the buyer may want to sell the house to someone else in the
future, which will also require the signing of a deed of assignment.

This document is necessary because it serves as a temporary title deed in the event that the actual title deed for the house
has not been issued. For every piece of property that will be sold before the issuance of a title deed, a deed of assignment
will be required.

Requirements for a Deed of Assignment

In order to be legally enforceable, an absolute sale deed must provide a clear description of the property being
transferred, such as its address or other information that distinguishes it from other properties. In addition, it must clearly
identify the buyer and seller and state the date when the transfer will become legally effective, the purchase price, and
other relevant information.

In today's real estate transactions, contracting parties usually use an ancillary real estate sale contract in an attempt to
cram all the required information into a deed. Nonetheless, the information found in the contract must be referenced by
the deed.
Information to Include in a Deed of Assignment

 Names of parties to the agreement

 Addresses of the parties and how they are binding on the parties' successors, friends, and other people who
represent them in any capacity
 History of the property being transferred, from the time it was first acquired to the time it is about to be sold
 Agreed price of the property
 Size and description of the property
 Promises or covenants the parties will undertake to execute the deed
 Signatures of the parties
 Section for the Governors Consent or Commissioner of Oaths to sign and verify the agreement

If you need help understanding, drafting, or signing a deed of assignment, you can post your legal need on UpCounsel's
marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law
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CONTRACT OF LEASE WITH OPTION TO BUY (WITH RIGHT TO PURCHASE)

The lessor in a contract of lease who is the owner of the leased property may grant the lessee an option to buy the
property leased under certain conditions. For the option to be valid and exercisable by the lessee it must be supported by
a consideration separate and distinct from the rent as it is treated as a continuing offer to sell the property by the lessor.

This contract is often use by real estate developers as a marketing strategy by offering installment buyers a “Lease-to-
Own” option where the title over the property remains with the developer and the monthly rental treated as installment
payment and applied to the selling price at a future time. However, while the contract is essentially one of lease the BIR
may nonetheless treat it as an installment sale and applicable taxes shall be imposed on the lessor.

RENT TO OWN CONTRACT

This Contract of Lease with Option to Purchase (Rent-to-Own Contract) made and executed this ____of __________
20___ Manila, Philippines by and between.

__________________________________, Filipino, of legal age, single/married to, with post address at

________________________, hereinafter referred to as the LESSOR/SELLER.

-AND –

__________________________________, Filipino, of legal age, single/married to, with postal address

__________________________, hereinafter referred to as the LESSEE/BUYER.

WITNESSETH:

THAT, for and in consideration of the payment of rent and the faithful compliance by the LESSEE/BUYER of all the
stipulations and covenants hereinafter contained, the LESSOR/SELLER has agreed to lease unto the LESSE /BUYER the
premises located at _______________________________, City of Manila under the following terms and conditions.

1. PURPOSE: That the premises hereby leased shall be used exclusively by the LESSE/BUYER for residential purposes
only and shall not be diverted to other uses. It is hereby expressly agreed upon that if at any time the premises are
used for other purposes, the LESSOR/SELLER shall have the right to rescind this contract without prejudice to its
other rights under the law.

2. TERM: The term of this non–renewable lease is for ______________ months from _____________________ to
________________ inclusive.

3. RENTAL RATE: The monthly rate for the leased premises shall be in PESOS: ______________________ [_______________],
Philippine currency. All rental payments shall be made payable to ______________________.

4. DEPOSIT: That the LESSEE/BUYER shall deposit with the LESSOR/SELLER upon signing of this contract and prior to
move in an amount equal to ten percent (10%) of the selling price or the sum of PESOS:
_____________________________________________________, Philippine currency.

5. RENTAL PAYMENT: The LESSE/BUYER shall issue, likewise, upon signing of this contract and prior to move in,
Thirty (30) post-dated checks to cover monthly rental for the months of _________________ to __________________, each
check dated on the _____ day of each month.
6. DEFAULT IN PAYMENT: In case of default by the LESSEE/BUYER in the payment of the rent, such as when the
checks are dishonored, the LESSOR/SELLER, at its option may terminate this contract and eject the LESSEE/BUYER
as hereinafter provided. However, the LESSE/BUYER is given seven (7) days grace period within which to settle the
account from date rental payment is due. Granting an extension to the aforesaid grace period may not be deemed
as a waiver of LESSOR/SELLER right to terminate this contract and eject the LESSE/BUYER but in the event the
LESSOR/SELLER so opts to grant a written request for extension, a penalty equivalent to three (3%) percent per
month of the rental due, with a fraction of a month considered as one month shall be charged and assessed for
delayed payments.

7. SUB–LEASE: The LESSEE/BUYER shall not directly or indirectly sublet, allow or permit the leased premises to be
occupied in whole or in part by any person, form or corporation; neither shall the LESSEE/BUYER assign its rights
hereunder to any other person or entity and no right of interest thereto or therein shall be conferred on or vested
in anyone by the LESSEE/BUYER without LESSOR/SELLER’s written approval.

8. LESSE’S VISITORS, etc…: In case of damage to leased premises attributable to the LESSEE/BUYER, agents and/or
visitors, repair of the same shall be for the account of the LESSEE/BUYER without prejudice to LESSOR/SELLER’s
availment of any other right under the law.

9. POWER, WATER CONSUMPTION & ASSOCIATION DUES: Power, water and association dues shall be for the
account of the LESSEE/BUYER.

10. OTHER PUBLIC UTILITIES: The LESSEE/BUYER shall pay for its telephone, cable and electrical services and other
public services and utilities.

11. REPAIR AND MAINTENANCE: The LESSOR/SELLER shall deliver the leased as is where is. The LESSEE/BUYER hereby
expressly acknowledges that the leased as is where is. The LESSE/BUYER hereby agrees and binds itself to
undertake at its exclusive expense all minor and major repairs as may be required to maintain the leased premises
in good state of repair, any provisions of law, present or future, or any stipulation in this agreement to the
contrary notwithstanding.

12. IMPROVEMENTS, ALTERATIONS AND RENOVATIONS: The LESSEE/BUYER shall not make any improvements,
alternations and renovations in the leased premises without prior written consent of both the Association and the
LESSOR/SELLER. It is understood that all permanent improvements shall be owned by the LESSOR/SELLER and
may not be removed without the express and written consent of the LESSOR/SELLER.

13. INJURY OR DAMAGE: The LESSEE/BUYER hereby assumes full responsibility for any damage which may be caused
to the person or property of third person/s while remaining either casually or on business in any part of the
premises leased. LESSEE/BUYER further binds itself to hold the LESSOR/SELLER harmless and free from
any claim for such injury or damage. Provided, however, that the LESSOR/SELLER shall make necessary actions to
correct said deficiencies to ensure that premises are in good and tenantable condition.

14. DISTURBANCE OF POSSESSION: Disturbance or discontinuance of possession of the LESSEE/BUYER due to “force
majeure” shall confer nor right of any kind to the LESSEE/BUYER as against the LESSOR/SELLER, by reason of
inconvenience, annoyance or injury to business arising out of the necessity of repairing any portion of the leased
premises.

15. GOVERNMENT REGULATIONS: The LESSEE/BUYER, shall, at its own expense and risks, comply with all the laws,
ordinances, regulations and orders of any agency of the government, national or local, affection or pertaining to
the leased premises and to any effects or articles which said LESSEE/BUYER may have in its possession therein.

16. ABANDONMENT OF PREMISES: Should the LESSEE/BUYER abandon the leased premises for a period of THIRTY
(30) DAYS or vacate the premises before expiration of this Contract of Lease without notifying the LESSOR/SELLER
 and check payment for the current month is dishonored, the LESSOR/SELLER’S may immediately re-enter the
leased premises and this lease shall thereon be automatically terminated.

17. BREACH OF CONDITIONS: In case of breach by the LESSEE/BUYER of any of the conditions and covenants of this
lease as herein stipulated, the LESSOR/SELLER at its option, may forthwith terminate and cancel this lease and the
LESSEE/BUYER shall be liable for any and all damages as a result of such default and termination. Forfeiture of
whatever rental desists and advances shall apply in case the LESSEE/BUYER violates any of the provisions in the
contract. Forfeiture shall likewise apply should the LESSEE/BUYER fails to exercise his option to purchase after the
expiration of this contract.

18. NON-WAIVER OF LESSOR’S RIGHT: Failure of the LESSOR/SELLER to enforce strict performance by the
LESSEE/BUYER of any of the terms, conditions and covenants of this agreement shall not be construed as waiver of
any right or remedy that the LESSOR/SELLER’S may have, nor shall it be deemed as a waiver of any subsequent
breach of the terms, conditions, and covenants contained therein. No waiver by the LESSOR/SELLER of its rights
hereunder shall be deemed to have been made unless expressed in writing and signed by the LESSOR/SELLER.

19. EXPIRATION OR CANCELLATION OF LEASE: At the expiration of the term of this lease or cancellation thereof, as
herein provided, the LESSEE/BUYER will promptly deliver to the LESSOR/SELLER the leased premises with all
corresponding keys and in as good and tenantable condition as the same is now, ordinary wear and tear excepted,
devoid of all occupants, movable furniture, articles and effects of any kind. Non-compliance with the terms of this
clause by the LESSEE/BUYER will give the LESSOR/SELLER the right, at latter’s option, to refuse to accept the
delivery of the premises and to compel the LESSEE/BUYER to pay therefrom at the same rate as herein provided
plus an additional sum equal to Twenty Five (25%) percent thereof as penalty until the LESSEE/BUYER shall have
complied with terms hereof. The same penalty shall, likewise, be imposed in case the LESSEE/BUYER shall refuse to
leave the leased premises after the expiration of this Contract of Lease or the termination for any reason
whatsoever.

20. OPTION TO PURCHASE: For good & valuable consideration, the receipt whereof is hereby acknowledge from the
LESSEE/BUYER. The LESSOR/SELLER hereby extends an option to the LESSEE/BUYER to purchase for the amount
of PESOS: ___________________________________________ [P __________________] of Lease on the 18th month or the period
from 1st to _____ of __________, _______. The LESSEE/BUYER, at his/her/its exclusive option, conditioned on faithful
compliance with all payments and undertakings contained herein, may convey his/her/its decision to avail of
option to purchase in writing to the LESSOR/SELLER who thereafter shall credit all rental payments up to the
__________ (___) month and the initial deposit stated above to down payment.

21. BALANCE AFTER THIS LEASE AGREEMENT: If LESSEE/BUYER complied with all terms and conditions stated above,
inclusive of payment of realty taxes, power, water and association dues, the outstanding balance of the
LESSEE/BUYER shall be 70% of the Total Selling Price amount equivalent to PESOS:
_____________________________________ [P_____________], Philippine currency. The LESSEE/BUYER hereby agrees to
execute the Deed of Absolute Sale upon payment in full of the TOTAL PURCHASE PRICE. Failure of the
LESSEE/BUYER to exercise his/its right to purchase within the period of 30 months from the execution of this
contract shall mean forfeiture and abandonment of his right to purchase. In such case, all payment made during
the term of this lease are considered rentals.

22. TRANSFER EXPENSES: Documentary stamp tax, capital gain tax, registration fees, transfer tax, and other necessary
expenses connected with the execution and registration of the sale shall be for the account of and paid by the
LESSEE/BUYER.

23. TAXES, UTILITIES AND OTHER ASSOCIATION IMPOSITIONS: For the duration of this lease, LESSEE/BUYER shall pay
the Realty Taxes. However, should the LESSEE/BUYER not exercise the option to purchase, LESSOR/SELLER shall
reimburse the LESSEE/BUYER of all the taxes, exclusive of penalties for delayed payments, if any, it had paid as well
as the start-up fund of the Homeowners Association.
 24. JUDICIAL RELIEF AND PENALTY: Should any one of the parties herein be compelled to seek judicial relief against
the other, the losing parties shall pay an amount equivalent to One Hundred Percent (100%) of the amount
claimed in the compliant as attorney’s fees which shall in no case be less than P 100,000.00 pesos in addition to
other cost and damages which the said party may be entitled to under the law, to recover from the other party.
Provisions of penal character in this Contract of Lease shall be considered as cumulative to the relief granted by
this section.

25. RIGHTS AND INTERESTS: The rights and interests of the LESSOR/SELLER subject under this instrument shall be
fully assignable by the LESSOR/SELLER subject only to previous written notice thereof to the LESSEE/BUYER.

26. FORFEITURE OF DEPOSIT: Forfeiture of whatever rental deposit and advances shall apply to any of the following:

a. When the LESSEE/BUYER is in default in payment for three (3) months. In such a case, the LESSOR/SELLER shall
have the right to prohibit entry of the LESSEE/BUYER, visitors, guests and his employees in the premises and the right
to padlock the leased premises until indebted is satisfied;

b. When LESSEE/BUYER pre-terminates lease with or without cause;

c. When LESSEE/BUYER violates any of the provisions of this contract; and

d. When the LESSEE/BUYER fails to exercise his/her option to purchase.

27. PENAL PROVISION: The parties agree that all covenant and agreements herein contained shall be deemed
conditions as well as covenants that if default or breach be made of any such covenants and conditions, then this
lease may be terminated and cancelled and the party in breach shall be liable for any and all damages, actual and
consequential, resulting from such breach or termination; provided however, that no default shall be declared
under this lease unless the party in default has given written notice to cure such default within thirty (30) days. In
the event of violation of this contract, other than the non-payment of rentals, the party in breach must
immediately take remedial steps to cure the breach not later than thirty (30) days.

28. RIGHT OF ENTRY: LESSOR/SELLER or its authorized agent/s shall, after giving due notice to the LESSEE/BUYER,
have the right to enter the premises in the presence of the LESSEE/BUYER or its representative at any reasonable
hour to examine the same or to make repairs therein or for the operation of regular maintenance of the building
or for any other lawful purpose which it may deem necessary.

This RENT TO OWN CONTRACT (CONTRACT OF LEASE WITH OPTION TO PURCHASE) shall be valid and binding,
between the parties, their successors-in-interest and assigns. No amendment of the terms of the instrument shall be
effective unless in writing and signed by the parties therein.

IN WITNESS WHEROF, parties herein have affixed their signatures on the date and place first above written.

__________________________ _______________________

[Name] [Name]

LESSOR/SELLER LESSEE/BUYER

SIGNED IN THE PRESENCE OF:

 __________________________ _______________________

ACKNOWLEDGEMENT

Republic of the Philippines)

_________________________) S.S

BEFORE ME, a Notary Public, this _____ day of ____________, 20___ personally appeared the following to
witness:

NAME CTC No. DATE ISSUED PLACE ISSUED

-------------------------- --------------- ---------------- -------------------

-------------------------- --------------- ---------------- -------------------

Known to me to be the same persons who have executed the foregoing, instrument and acknowledged to me that the
same is of their own free will and voluntary act and deed as well as of the corporation herein represented.

This instrument consisting of ______ (__) pages, including the page on which this acknowledgement is written, has been
signed on the left margin of each page and every page thereof by the parties and their instrumental witnesses and sealed
with my notarial seal.

IN WITNESS WHEREOF, I have hereunto set my hand, the day, year and place above written.

Doc. No. ______:

Page No. ______:

Book No. ______:

Series No 20___.
Philippine Legal Forms: Lease Contract

In real estate, lease contract is considered as the most important legal form because it legally binds two or more parties
often referred to as the landlord and tenant. The lease contract contains rental agreement, which specifies the tenant's
right to live and the landlord's right to retain ownership. The contract protects both parties. For instance, if a tenant
decides to move, a letter of cancellation must be provided to the landlord one month in advance to give ample time to
find new occupants.

LEASE CONTRACT

KNOW ALL MEN BY THESE PRESENTS:

This CONTRACT OF LEASE is made and executed at the City of _____, this day of _______________, 20__, by and between:

(NAME OF LESSOR), of legal age, single/married to (Name of spouse if any), Filipino, and with residence and postal
address at (Address), hereinafter referred to as the LESSOR.

-AND-

(NAME OF LESSEE), Filipino and with residence and postal address at (Address), hereinafter referred to as the LESSEE.

WITNESSETH; That

WHEREAS, the LESSOR is the owner of THE LEASED PREMISES, a residential property situated at (Address of property to
be leased);

WHEREAS, the LESSOR agrees to lease-out the property to the LESSEE and the LESSEE is willing to lease the same;

NOW THEREFORE, for and in consideration of the foregoing premises, the LESSOR leases unto the LESSEE and the LESSEE
hereby accepts from the LESSOR the LEASED premises, subject to the following:

TERMS AND CONDITIONS

1. PURPOSES: That premises hereby leased shall be used exclusively by the LESSEE for residential purposes only and shall
not be diverted to other uses. It is hereby expressly agreed that if at any time the premises are used for other purposes,
the LESSOR shall have the right to rescind this contract without prejudice to its other rights under the law.

2. TERM: This term of lease is for ONE (1) YEAR. from (Date) to (Date) inclusive. Upon its expiration, this lease may be
renewed under such terms and conditions as my be mutually agreed upon by both parties, written notice of intention to
renew the lease shall be served to the LESSOR not later than seven (7) days prior to the expiry date of the period herein
agreed upon.

3. RENTAL RATE: The monthly rental rate for the leased premises shall be in PESOS: AMOUNT IN WORDS (P 00,000.00),
Philippine Currency. All rental payments shall be payable to the LESSOR.

4. DEPOSIT: That the LESSEE shall deposit to the LESSOR upon signing of this contract and prior to move-in an amount
equivalent to the rent for THREE (3) MONTHS or the sum of PESOS: AMOUNT IN WORDS (P 00,000.00), Philippine
Currency. wherein the two (2) months deposit shall be applied as rent for the 11th and 12th months and the remaining
one (1) month deposit shall answer partially for damages and any other obligations, for utilities such as Water, Electricity,
CATV, Telephone, Association Dues or resulting from violation(s) of any of the provision of this contract.
5. DEFAULT PAYMENT: In case of default by the LESSEE in the payment of the rent, such as when the checks are
dishonored, the LESSOR at its option may terminate this contract and eject the LESSEE. The LESSOR has the right to
padlock the premises when the LESSEE is in default of payment for One (1) month and may forfeit whatever rental deposit
or advances have been given by the LESSEE.

6. SUB-LEASE: The LESSEE shall not directly or indirectly sublet, allow or permit the leased premises to be occupied in
whole or in part by any person, form or corporation, neither shall the LESSEE assign its rights hereunder to any other
person or entity and no right of interest thereto or therein shall be conferred on or vested in anyone by the LESSEE
without the LESSOR'S written approval.

7. PUBLIC UTILITIES: The LESSEE shall pay for its telephone, electric, cable TV, water, Internet, association dues and other
public services and utilities during the duration of the lease.

8. FORCE MAJEURE: If whole or any part of the leased premises shall be destroyed or damaged by fire, flood, lightning,
typhoon, earthquake, storm, riot or any other unforeseen disabling cause of acts of God, as to render the leased premises
during the term substantially unfit for use and occupation of the LESSEE, then this lease contract may be terminated
without compensation by the LESSOR or by the LESSEE by notice in writing to the other.

9. LESSOR'S RIGHT OF ENTRY: The LESSOR or its authorized agent shall after giving due notice to the LESSEE shall have
the right to enter the premises in the presence of the LESSEE or its representative at any reasonable hour to examine the
same or make repairs therein or for the operation and maintenance of the building or to exhibit the leased premises to
prospective LESSEE, or for any other lawful purposes which it may deem necessary.

10. EXPIRATION OF LEASE: At the expiration of the term of this lease or cancellation thereof, as herein provided, the
LESSEE will promptly deliver to the LESSOR the leased premises with all corresponding keys and in as good and tenable
condition as the same is now, ordinary wear and tear expected devoid of all occupants, movable furniture, articles and
effects of any kind. Non-compliance with the terms of this clause by the LESSEE will give the LESSOR the right, at the
latter's option, to refuse to accept the delivery of the premises and compel the LESSEE to pay rent therefrom at the same
rate plus Twenty Five (25) % thereof as penalty until the LESSEE shall have complied with the terms hereof. The same
penalty shall be imposed in case the LESSEE fails to leave the premises after the expiration of this Contract of Lease or
termination for any reason whatsoever.

11. JUDICIAL RELIEF: Should any one of the parties herein be compelled to seek judicial relief against the other, the losing
party shall pay an amount of One Hundred (100) % of the amount clamed in the complaint as attorney's fees which shall
in no case be less than P50,000.00 pesos in addition to other cost and damages which the said party may be entitled to
under the law.

12. This CONTRACT OF LEASE shall be valid and binding between the parties, their successors-in-interest and assigns.

IN WITNESS WHEREOF, parties herein affixed their signatures on the date and place above written.

(Name of Lessor) (Name of Lessee)

LESSOR LESSEE

Signed in the presence of:

____________________________ ______________________________
ACKNOWLEDGEMENT

Republic of the Philippines)

_________________________) S.S

BEFORE ME, personally appeared:

Name CTC Number Date/Place Issued

(Name of Lessor) 10000000 February 24, 20__ / Cavite City

(Name of Lessee) 10000000 January 07, 20__ / Makati

Known to me and to me known to be the same persons who executed the foregoing instrument and acknowledged to me
that the same is their free and voluntary act and deed.

This instrument consisting of ____ page/s, including the page on which this acknowledgement is written, has been signed
on each and every page thereof by the concerned parties and their witnesses, and and sealed with my notarial seal.

WITNESS MY HAND AND SEAL, on the date and place first above written.

Notary Public

Doc. No.______;

Page No. ______;

Book No.______;

Series of 20___.
Lease
March 6, 2016law on lease

What is lease?

Lease is a consensual, bilateral, onerous and commutative contract by virtue of which one person binds himself to grant
temporarily the use of the thing or to render some service to another who undertakes to pay some rent.

Art. 1842. The right to an account of his interest shall accrue to any partner, or his legal representative as against the winding
up partners or the surviving partners or the person or partnership continuing the business, at the date of dissolution, in the
absence of any agreement to the contrary. (n)

What are the properties which may be leased?

1. Lease of Public Domain which must be those alienable lands (agricultural lands) of 1,000 hectares maybe leased by private
corporation for 25 years and 12 hectares by Filipino citizens

2. Private Lands and/or improvements thereof.

What is the recording of lease of personal property?

As a general rule, the lease of real property is personal right. However if the lease partakes of the nature of real right if the
lease real property is more than one (1) year or is registered regardless of duration.

Who are the persons disqualified to be lessees?

A husband and a wife cannot lease to each other their separate properties except if separation of property was agreed upon
or if there has been judicial separation of property.
This is to prevent prejudice to creditors and to prevent the stronger spouse from influencing unduly the weaker spouse.
Also, those mentioned in this article of the New Civil Code are disqualified:

Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through
the mediation of another:
(1) The guardian, the property of the person or persons who may be under his guardianship;

(2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal
has been given;

(3) Executors and administrators, the property of the estate under administration;

(4) Public officers and employees, the property of the State or of any subdivision thereof, or of any government-owned or
controlled corporation, or institution, the administration of which has been entrusted to them; this provision shall apply to
judges and government experts who, in any manner whatsoever, take part in the sale;

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected
with the administration of justice, the property and rights in litigation or levied upon an execution before the court within
whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by
assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in
which they may take part by virtue of their profession.
(6) Any others specially disqualified by law. (1459a)

*Persons referred to in Article 1491 of the New Civil Code are disqualified because of fiduciary relationships

References:

The New Civil Code

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Obligations of Lessor and Lessee

March 6, 2016law on lease

What are the obligations of the lessor?

Obligations of the lessor is expressly enumerated in this article of the New Civil Code:

Art. 1654. The lessor is obliged:

(1) To deliver the thing which is the object of the contract in such a 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.
(1554a)

*The lessor is also obliged not to alter the form in such a way as to impair the use to which the thing is devoted

What are the obligations of the Lessee?

Obligations of the lessee is expressly enumerated in this article of the New Civil Code:

Art. 1657. The lessee is obliged:

(1) To pay the price of the lease according to the terms stipulated;

(2) To 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) To pay expenses for the deed of lease. (1555)

*The lessee is obliged to pay rent, to use the thing leased as a diligent father of a family, devoting it to the use stipulated,
to pay expenses for the deed of lease, to notify the lessor of usurpation or untoward acts, to notify the lessor of need for
repairs, to return the property leased upon.

What are the rules in case of urgent repairs?

The lessee is obliged to tolerate the work although it may be very annoying to him and although during the same time he
may be deprived of a part of the premises, if repairs last for not more than 40 days. If the period is 40 days or more, lessee
can ask for reduction of the rent in proportion to the time including the 1st 40 days and the part of the property of which
he is deprived

What are the effects if lessor fails to make urgent repairs?

The lessee may:

1. Order repair at the lessor’s cost
2. Sue for damages
3. Suspend the payment of the rent
4. Ask for rescission, in case of substantial damage to him

What are the kinds of trespass in lease?

Art. 1664. The lessor is not obliged to answer for a mere act of trespass which a third person may cause on the use of the
thing leased; but the lessee shall have a direct action against the intruder.
There is a mere act of trespass when the third person claims no right whatever. (1560a)

1. Trespass in fact is when the physical enjoyment is reduced. There is a mere physical disturbance on the property leased
such as an intrusion of an intruder without any legal claim to justify his entry into the property. The lessor will not be held
liable. The duty to maintain the lessee in the peaceful enjoyment of the lease is a warranty that the lessee shallnot be
disturbed in hislegal, and notphysical, possession

2. Trespass in lawis whena third person claims legal right to enjoy the premisesand the lessor will be held liable.

References:

The New Civil Code

Jurado, D. (1999). Civil Law Reviewer. Quezon City: Rex Printing Company, Inc.

Robles V. LizarragaHnos. G.R. No. L-16736, December 22, 1921

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Duration of Lease
March 6, 2016law on lease

What is the duration of lease?

Lease made for a determinate time or fixed period be for the said period and it ends on the day fixed without need of a
demand. But if there is no fixed period for rural lands it shall be for all time necessary for the gathering of fruits which the
whole estate may yield in 1 year, or which it may yield once. It is exemplified in this article of the New Civil Code:

Art. 1680. The lessee shall have no right to a reduction of the rent on account of the sterility of the land leased, or by reason
of the loss of fruits due to ordinary fortuitous events; but he shall have such right in case of the loss of more than one-half
of the fruits through extraordinary and unforeseen fortuitous events, save always when there is a specific stipulation to the
contrary.
Extraordinary fortuitous events are understood to be: fire, war, pestilence, unusual flood, locusts, earthquake, or others which
are uncommon, and which the contracting parties could not have reasonably foreseen. (1575)

As for urban lands the following rules shall apply, and below is the supporting article of the law:

a) If rent is paid daily: lease is from day to day

b) If rent is paid weekly: lease is from week to week
c) If rent is paid monthly: lease is from month to month
d) If rent is paid yearly: lease is from year to year

Art. 1687. If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is
annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to
be paid daily. However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a
longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may
likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the
courts may also fix a longer period after the lessee has stayed in the place for over one month. (1581a)

What is implied new lease?

Implied lease is which when at the end of the contract the lessee continues enjoying the thing leased for 15 days with the
acquiescence of the lessor, unless a notice to the contrary had previously been given by either party. It is required that the
term of the original contract has expired, the lessor has not given the lessee a notice to vacate and the lessee continued
enjoying the thing leased for at least 15 days with acquiescence of the lessor.

When is there no implied new lease?

The is no implied lease when before or after the expiration of the term, there is a notice to vacate given by either party and
when there is no definite fixed period in the original lease contract as in the case of successive renewals. Its effect includes
that the period of the new lease is not that stated in the original contract but the time in Article 1682 and 1687 and other
terms of the original contract are revived.
Note that the terms that are revived are only those which are germane to the enjoyment of possession, but not those with
respect to special agreements which are by nature foreign to the right of occupancy or enjoyment inherent in a contract of
lease – such as an option to purchase the leased premises as discussed by the court in the case of Dizon V.Magsaysay (GR
No. 23399, May 31,1974).

What is perpetual lease?

Perpetual lease is a lease contract providing that the lessee can stay in the premises for as long as he wants and for as long
as he can pay the rentals and its increases. However, this is not permissible, it is a purely potestative condition because it
leaves the effectivity and enjoyment of leasehold rights to the sole and exclusive will of the lessee.

Note that In Jespajo Realty V. CA, 27 Sept. 2002, the SC upheld a lease contract, which provides that “the lease contract shall
continue for an indefinite period provided that the lessee is up-to-date in the payment of his monthly rentals” for the
contract is one with a period subject to a resolutory condition.

References:
Divino V. Fabie de Marcos, G.R. No. L-13924,January 3, 1962

DizonV..Magsaysay ,GR No. 23399, May 31,1974

Jespajo Realty V. Court of Appeals,G.R. No. 113626, September 27, 2002

Jurado, D. (1999). Civil Law Reviewer. Quezon City: Rex Printing Company, Inc.

The New Civil Code

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Lease v Sublease
March 6, 2016law on lease

What is the difference between assignment of lease and sublease?

As a general rule, the lessee cannot assign the lease without consent of the lessor except if there is stipulation to the contrary.
This is because the aassignment of this nature constitutes a novation by substituting the person of the debtor so the creditor-
lessor must consent.

What is sublease?

Sublease is a separate and distinct contract of lease wherein the original lessee becomes a sublessor to a sublessee. It is
allowed unless expressly prohibited and the sublessee is subsidiarily liable for any rent due. This is expressed in this article:

Art. 1651. Without prejudice to his obligation toward the sublessor, the sublessee is bound to the lessor for all acts which
refer to the use and preservation of the thing leased in the manner stipulated between the lessor and the lessee. (1551)

What are the rights of Lessee to Sublease?

Unlike in assignment, a lessee may generally sublease the property in the absence of express prohibition. This is supported
by the following articles:

Art. 1649. The lessee cannot assign the lease without the consent of the lessor, unless there is a stipulation to the contrary.
(n)

Art. 1650. When in the contract of lease of things there is no express prohibition, the lessee may sublet the thing leased, in
whole
or in part, without prejudice to his responsibility for the performance of the contract toward the lessor. (1550)

What are the rights of lessor if sublease is expressly prohibited but entered into by Lessee?

a. Rescission and damages;

b. Damages only (Contract will be allowed to remain in force)
c. Ejectment

What are the instances when sublessee is liable to the lessor?

This is when all acts which refer to the use and preservation of the thing leased in the manner stipulated between the lessor
and the lessee. Also, the sublessee is subsidiarily liable to the lessor for any rent due from the lessee. The sublessee shall not
be responsible beyond the amount of rent due from him. This is better explained in this article:
Art. 1652. The sublessee is subsidiarily liable to the lessor for any rent due from the lessee. However, the sublessee shall not
be responsible beyond the amount of rent due from him, in accordance with the terms of the sublease, at the time of the
extrajudicial demand by the lessor.
Payments of rent in advance by the sublessee shall be deemed not to have been.

References:

The New Civil Code

Jurado, D. (1999). Civil Law Reviewer. Quezon City: Rex Printing Company, Inc.

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Purchase of Real Property

March 6, 2016law on lease

What are the rules in the purchase of the leased property?

This article of the New Civil Code may be followed in the purchase of a leased property:

Art. 1676. The purchaser of a piece of land which is under a lease that is not recorded in the Registry of Property may
terminate the lease, save when there is a stipulation to the contrary in the contract of sale, or when the purchaser knows of
the existence of the lease.

If the buyer makes use of this right, the lessee may demand that he be allowed to gather the fruits of the harvest which
corresponds to the current agricultural year and that the vendor indemnify him for damages suffered.
If the sale is fictitious, for the purpose of extinguishing the lease, the supposed vendee cannot make use of the right granted
in the first paragraph of this article. The sale is presumed to be fictitious if at the time the supposed vendee demands the
termination of the lease, the sale is not recorded in the Registry of Property. (1571a)

*As a general rule, the purchaser of thing leased can terminate the lease except if the lease is recorded in Registry of Property,
there is stipulation in the contract of sale that purchaser shall respect the lease, the purchaser knows the existence of the
lease, the sale is fictitious or the sale is made with right of repurchase.

References:

F.S. DivinaGracia Agro Commercial V. Court of Appeals, G.R. No. L-47350, April 21, 1981

Jurado, D. (1999). Civil Law Reviewer. Quezon City: Rex Printing Company, Inc.

The New Civil Code

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Judicial Ejectment
March 6, 2016law on lease

What are the grounds for judicial ejectment?

The grounds for judicial ejectment is expressly laid down in this article of the New Civil Code:

Art. 1673. The lessor may judicially eject the lessee for any of the following causes:

(1) When the period agreed upon, or that which is fixed for the duration of leases under Articles 1682 and 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; or
if he does not observe the requirement in No. 2 of Article 1657, as regards the use thereof.

*The demand of payment must be coupled with demand to vacate the premises. Otherwise, the Unlawful Detainer case will
not prosper. The ejectment of tenants of agricultural lands is governed by special laws. A notice or demand to vacate does
not have to expressly use the word ―vacate‖ as it suffices that the demand letter puts the lessee or occupant on notice that
if he does not pay the rentals or comply with the terms of the lease contract, it should move out of the leased premises

The rules set down by Republic Act (RA) 9653 or the Rent Control Act of 2009 may also be followed in the lease of rented
condominium unit:

“SEC. 9. Grounds for Judicial Ejectment. – Ejectment shall be allowed on the following grounds:

1. Assignment of lease or subleasing of residential units in whole or in part, including the acceptance of boarders or
bedspacers, without the written consent of the owner/lessor;

2. Arrears in payment of rent for a total of three (3) months: Provided, That in the 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, or with the
city or municipal treasurer, as the case may be, or barangay chairman, or in a bank in the name of and with notice to the
lessor, within one (1) month after the refusal of the lessor to accept payment.

The lessee shall thereafter deposit the rent within ten (10) days of every current month. Failure to deposit the rent for three
(3) months shall constitute a ground for ejectment.
The lessor, upon authority of the court in case of consignation or upon joint affidavit by him and the lessee to be submitted
to the city or municipal treasurer or barangay chairman and to the bank where deposit was made, shall be allowed to
withdraw the deposits;

3. Legitimate need of the owner/lessor to repossess his or her property for his or her own use or for the use of any immediate
member of his or her family as a residential unit: Provided, however, That the lease for a definite period has expired: Provided,
further, that the lessor has given the lessee the formal notice three (3) months in advance of the lessor’s intention to
repossess the property and: Provided, finally, that the owner/lessor is prohibited from leasing the residential unit or allowing
its use by a third party for a period of at least (1) year from the time of repossession;

4. Need of the lessor to make necessary repairs of the leased premises which is the subject of an existing order of
condemnation by appropriate authorities concerned in order to make the said premises safe and habitable: Provided, That
after said repair, the lessee ejected shall have the first preference to lease the same premises: Provided, however, That the
new rent shall be reasonably commensurate with the expenses incurred for the repair of the said residential unit and:
Provided, finally, That if 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
5. Expiration of the period of the lease contract.”

References:
The New Civil Code

Jurado, D. (1999). Civil Law Reviewer. Quezon City: Rex Printing Company, Inc.

Maximo Roxas, et al. VS. IAC, CelestinoPernes ,et al. GR. No. 74279, January 20, 1988

Republic Act (RA) 9653 “An Act Establishing Reforms in the Regulation of Rent of Certain Residential Units, Providing the
Mechanisms Therefor and for Other Purposes”, July 14, 2009