Lease 2.

Recording of lease contract: The registration of the

lease contract in the registry of property is not
A. General Provision essential for the validity of the lease between parties
and their privies but it is needed to make the contract
Definition : A bilateral, onerous contract by which the owner effective regarding third person.
temporarily grants the use of his property or the rendering of
some service to another who undertakes to pay some rent, Effect if no recording : Every lease of real estate may be recorded
compensation or price. in the registry of property and unless a lease is recorded it shall
Kinds of Lease : not be binding upon third person.
1. Of things
2. Of service Right of the purchase of land if lease is not recorded:
3. Of work If a person purchased a piece of land which is under lease he has
Note: The lease of work must be termed as contract of peace of the right to terminate the same except when
work 1.There is a stipulation to the contract of sale
Lease of Things 2.When the purchaser knew of the existence of lease but if the
Definition: In lease of things one of the parties binds himself to sale is fictious and was only resorted to for the purpose of
give to another the enjoyment or use of the thing for a price extinguishing the lease the vendee cannot terminate the lease.
certain and for a period which may be definite or indefinite.
Commodatum SALE Lease Fictitious: At the time of the supposed demand the termination of
Gratitious: If there The seller has the The transfer which the lease the sale is not recorded in the registry of property.
is compensation obligation to one of the parties
the same is a lease transmit the obligates himself Requirement of special power
ownership of the to make is not of 1. Without a special power the lease cannot be
thing sold the ownership of constituted ( whether the lese is to be recorded or not
the thing but as long as it is within a period of more than 1 year
merely the there must be a special power of attorney)
enjoyment a. The husband with respect to the wife
thereof. paraphernal real estate
b. The father or guardian as to the property of
Object or Subject Matter the minor and the ward
1.Real c. The manager .
2.Personal i. Administrator of the conjugal
a. Consumable Goods IS NOT a subject matter property
Exception: ii. Administrator of the co owned
1.When they are merely to be exhibited property
2. When they are accessory to the industrial establishment iii. To an administrator of the
Parties entitled to a contract patrimonial property of the state
Rule : All those capacitated to enter into a contract can be lessor Effect : The court declared void the lease contract over real
and lessee property for a period of more than one year entered by the agent
of the lessor without special power of attorney. The law requires
Rule in case of foreigner that the agent must be equipped with SPA ( Distinguish this with
1. If a foreigner invest here in the Philippines: He is judicial administrator who is appointed by the court where NO
allowed to lease private land but the lease contract SPA is needed )
shall be fore a period not exceeding 50 years
renewable once for a period of not more than 25 Term of the lease: The law allows a perpetual lease, there must
years and the lease contract is only used for the always be a period but such period must be definite or indefinite.
purpose agreed upon. However there can be no lease which last until 99 years.
2. If a foreigner does not invest : He is allowed to
lease in the Philippines but for a maximum period The court has the proper to fix a longer term:
of only 25 years renewable for another 25 years. 1. Monthly rent : Over a year
2. Weekly rent: Over 6 months
Note: The lessor need not be the owner of the property it is a rule 3. Daily rent : Over a month.
that in a contract of lease the possession does not pass to the
lessee. It is however important that the lessor must have a right , B. Right and Obligation of lessor
or at least an authority as an agent otherwise the contract is
inexistent. Obligations of the lessor:

Formalities Required
1. General Rule: There is no required form of contract of
lease in order for the same to be valid
Enforcement :
1. For a lease over real property it must be in writing or
some note or memorandum signed by the party
charged if the agreement for the leasing last for a
period longer than one year.
a. To deliver the thing which is the object of the contract
in such a condition as to render it fit for the use
intended
b. 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 contrary
Duty to make Repairs :
 1. Necessary repairs in order to keep the thing suitable to the rescission of the contract and indemnification for damages
the use where it is devoted unless there is a or only the latter allowing the contract to remain in force.
stipulation. Rescission: Need not be one that requires for an independent
2. All repairs needed whether the damage be caused by action under the law, non payment of rent by the lessee the
nature, fortuitous event or lapse of time , but not lessor may unilaterally elect to rescind and thereby
those brought about by the fault of the lessee himself determine the right of the lease to continue in possession
or his privies. and the right to recover possession and this right to recover
3. Urgent repair become necessary may be enforced in an action for unlawful detainer.

c. To maintain the lessee in the peaceful and adequate 2.Rights of the lessee: : The lessee may ask for the rescission
enjoyment of the lease for the entire duration of the of the contract and indemnification of damages or only the
contract . latter allowing the contract to remain in force. The lessee can
also refuse to pay the rent in case the lessor fails to make the
1. TRESSPASS in Law The kind of trespass contemplated is necessary repairs.
legal trespass this pertain to a warranty by the lessor
that the lessee is not to be disturb in his legal and Not Ex : If the property is a dwelling place or any other building
physical possession of the property. intended for human habitation and the same is in a condition
The lessee is obliged to bring to the knowledge of the lessor any that its use brings imminent danger to life, health and the
usurpation or unlawful act which any third person may have lessee may terminate the lease at once by notifying the
committed or may be openly preparing to carry out. If he fails to lessor even if at the time of the perfection the lessor knew of
do so he s liable for damage. the dangerous condition and waived the right to rescind the
Trespass in law trespass in Fact lease on account of such.
1. Third person 1. There is a mere
claiming a right to act of trespass
premises when a third Right to sub-lease and the Assignment of a lease contract
person claims no
right or  Feel ko lalabas to !! Note
whatsoever a. Rule IN Subleasing : The lesee may sublet the thing
2. The recourse is 2. The recourse is leased in whole or in party unless expressly prohibited
with the lessor with the leseee in the lease contract.

1.The lessee remains to be liable to the lessor for the performance

C. Right and Obligation of the lessee
Obligation of the Lessee:
1. To pay the price of the lease according to the term
stipulated
2. To use the thing leased as 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
thing leased.
3. To pay the expenses for the deed of lease.
Responsibility in case of deterioration or loss of the thing :
1. The presumption is that the lessee is responsible for
the deterioration or loss of the thing leased unless he
proves that it took place without his fault.
Burden of Proof need not be had :
1. The destruction is due to earthquake, flood storm or
other natural calamity
*Fire is NOT a natural calamity, hence the lesee has a proof that
the fire did not take place without his fault.
Effect of loss due to fortuitous event :
1. If totally extinguished : The lease is extinguished
2. If partial : The lessee may choose between a portional
reduction in the rent and rescission of the sale.
Right of the partis in case of breach of contract
1.Right of the lessor ( NAGPAPAUPA) : The lessor may ask for
of the contract. The sub-leasee is subsidiarily liable to the lessor
for any rent due form the lessee but he is not liable beyond the
amount of rent due from him. Therefore, the advance by the sub-
lesee shall be deemed not to have been made so far as the lessor
claim is concerned unless the payment was made by virtue of the
custom of the place.
Q: What happens if the sublease misue the contract? Who is
liable?
A: The lessor may directly bring the action against the sublease
even though he is not a prty to the contract, but this right is not
given to the sub lease. In a sub lease, he cannot sue the lessor
directly the suing of the lessor must be done by the lessee. ( note
the difference when the lessor sues the sub lease allowed, but the
sub lease cannot sue the lessor it is only the lessee who can sue
the lessor
b. Rule in Assignment of lease contract : The lessee
cannot assig the lease contract without the consent of
the lessor unless there is a stipulation to the contrary. (
Consent of the lessor ) . The assignment of the lease
by the lessee involves a transfer of the rights and
obligation pertaining to the contract and the consent
of the lessor is necessary.
Here, there is a novation by the substitution of the person of one
of the partis the lessee. The personality of the lessee who
dissociates from the lease disappears.
Subleasing Assignment
The lessee remains a party to 1.This is prohibited without
the lease contract and such the consent of the lessor :
 he remains to be liable to the
lessor .
This is a novation of the
contract where the
personality of the lessee
disappears hence the consent
of the lessor is necessary.

Grounds for Ejectment

1. General Rule : The lessor may judicially eject the lessee

for any of the grounds
a. When the period agreed upon that which is
fixed for the duration of the lease expired
b. Lack of payment of the price stipulated
c. Violation of any of the condition agreed
upon by the contract
d. When the lessee devotes the property to
another purpose that which it is intended.

Improvement introduced by the lessee

1. Not entitled to reimbursement : The lessee has no right

of retention and reimbursement which belongs to the
builder in good faith.

Rule in Case of useful improvement

1. Lessor has the primary right while the lessee right is

subsidiary

The lessor has two option:

1. Paying one half of the value of the improvement which

the lessee made in good faith which are suitable for
use for which the lease is intended

*The lessor has the primary right to reimburse : 50% of the value
of improvement at the end of the lease. If the lessor refuses to
make the reimbursement the subsidiary right of lessee to remove
the improvement even if the principal thing suffers.

2. The lessee can remove the improvement if the refusal

to reimburse.

If there is a refusal to pay 50% of the value of the improvement

the lessee has the right to remove the improvement even though
the principal thing suffers damage but without causing any more
impairment on the property leased than is necessary.

Rule in case of Ornamental improvement

1. The lessee is not entitled to any reimbursement but he

may remove the ornamental objects provided no
damage is caused to the principal thing and the lessor
does not choose to retain them y paying their value at
the time lease is extinguished.