October 12, 2018

OFFICE OF THE SANGGUNIANG BAYAN

Municipality of
Camarines Norte

Thru: XXXXXXX
Municipal Vice-Mayor/Presiding Officer

Subject: Query on the propriety of leasing

out to private persons real
properties within the municipal
building compound for
commercial use.
________________________________________________________________________________

Gentlemen:

We write in response to your letters of May 3, 2018 and September

18, 2018 in connection with your concerns respecting your LGU as follows:

1. Devoting a portion of the municipal hall site for commercial

purposes (commercial stalls);
2. Entering into contract of lease with private individuals over the
commercial stalls; and
3. Measures to undertake if the foregoing concerns are legally infirmed.

Based on your representations, it is our legal opinion that a portion

of your municipal hall site may be legally dedicated for commercial
purpose and be leased to private individuals, provided that the same is
undertaken with approval and authority from the sangguniang bayan, and
that your LGU’s requirement for a government center as contemplated
under the Local Government Code is not compromised.

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 The real properties of an LGU are classified into properties of public
dominion and patrimonial. In the first class, no appropriation for private
use can be made as the same is beyond the commerce of man. However,
the properties under the second class are appropriable like all other real
properties belonging to private individuals.

The basic principle laid down by Article 424 of the Civil Code
provides that properties of public dominion devoted to public use and
made available to the public in general are outside the commerce of man
and cannot be leased by the local government unit to private individuals.

The said provision of law details these properties of public dominion

as consisting of the provincial roads, city streets, the squares, fountains,
public waters, promenades, and public works for public service paid for by
the LGUs. Also, it provides that all other property possessed by these LGUs
is patrimonial.

Based on the foregoing, the municipal hall site of your LGU, except
portions thereof pertaining to squares, fountains, promenade or parks, is a
patrimonial property. Consequently, the same may be leased to private
individuals for commercial purposes.

To give emphasis, leasing out portions of your municipal hall site

and entering into contract in pursuance thereof may only be made with the
approval and authority of the sangguniang bayan. Further, proprietary
activity should not compromise compliance with your LGU’s requirement
for a government center.

As a legal consequence, any portion of your municipal hall site that

is being, or hereafter, leased to private individuals should, along with other
fees and charges, be assessed for the corresponding realty property tax to
be charged against the private individuals renting the same.

This opinion is solely for the benefit of the person/body to whom the
letter is addressed, and thus, must not be relied upon by any other person

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or used for any other purposes. Likewise, this opinion shall not be publicly
posted or quoted or referred to in any public document or filed with any
government agency or other person or entity other than with the
addressee of this letter.

We hope that the foregoing discussion sufficiently addressed your

concerns. Please feel free to coordinate with the undersigned should you
have further concerns.

xxxxx
OIC, Provincial Legal Office
xxxxxx

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