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lease reviewer 2011

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.

Sales and lease comments and cases by hector de leon, UP, Ateneo and San beda civil law reviewer | jen_biltz_albano/2011

lease reviewer 2011
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
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 than 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.

Sales and lease comments and cases by hector de leon, UP, Ateneo and San beda civil law reviewer | jen_biltz_albano/2011

Public officer: state property . [One thousand Hectares] Sales and lease comments and cases by hector de leon. judges: property under litigation . lease of properties belonging to the public domain cannot be proper subjects of lease. UP. such contracts are void.000 has. renewable for not more than 25 years. 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. 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 .lease reviewer 2011 KINDS OF LEASE 1. and may acquire not more than 12 has.may lease lands of public domain with an area of 500 has.Justices.Others disqualified by law LEASE BY FILIPINOS . WHAT CAN BE THE SUBJECT OF A LEASE .Guardian: ward .Agent: principal . Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . may lease lands of public domain for a period of 25 years. the area not to exceed more than 1.Executor & administrators .Only things which are within the commerce of man.at least 60% Filipino-owned. LEASE BY CORPORATIONS .

maximum of 25 years renewable for another 25 years (P.D. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . UP.D. the courts can settle the disagreements Sales and lease comments and cases by hector de leon.lease reviewer 2011 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. courts cannot interfere. and cannot acquire private lands except through succession (c) If lease of real property (private lands).Increasing the rent is NOT an absolute right of the lessor . 713.713) (d) Under the Investor’s Lease Act of 1995.may be made orally but if the lease of real property is for more than one year.Owner has the right t fix the rent because the contract is consensual and not imposed by law .If the rent is fixed for the first time. the 25-year period was extended to 50 years renewable for another 25 years provided the following conditions are met:  lessee must make investments  lease is approved by DTI  if terms are violated. but if it is a renewal. FORM OF CONTRACT OF LEASE OF THINGS . 713 it is not. it must be in writing under the statue of frauds [still valid but unenforceable] NOTE: . DTI can terminate it NOTE: the ILA did not do away with P. under ILA the consent of DTI is required while in P.D.

ask contractor to remove the defect or to execute another work. if contractor fails or refuses. contract of labor c.lease reviewer 2011 Lease of work which refers to contract for a piece of work . Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . 1643. common carriers Lease of things (1) Concept Art. In the lease of things.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. household b. UP. and not its result and the other party binds himself to pay a remuneration therefor. 3 KINDS: a. one of the parties binds himself to give to another the enjoyment or use of a thing Sales and lease comments and cases by hector de leon. DUTIES OF MATERIAL: CONTRACTOR WHO FURNISHES WORK & (a) duty to deliver (b) duty to transfer ownership (c) duty to warrant eviction and hidden defects REMEDY OF EMPLOYER IN CASE OF DEFECTS: . employer can ask another at the contractor’s expense Lease of service -one party binds himself to render some service to the other party consisting his own free activity of labor.

Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 .lease reviewer 2011 for a price certain. wine in a showcase of a store (b) Goods are accessory to an industrial establishment e. UP. and for a period which may be definite or indefinite. no lease for more than ninety nine years shall be valid. Wedding cakes for display in Goldilocks.. (2) Consumable things cannot be the subject matter of lease. (a) Essential purpose is to transmit the use and enjoyment of a thing (b) Consensual (c) Onerous (d) Price fixed in relation to period of use or enjoyment (e) Temporary Sales and lease comments and cases by hector de leon. However. g. e. coal in a factory (3) Special characteristics of lease of things.g. Except (a) Consumables only for display or advertising.

the price is not payable until the work is completed. hence the laborer is entitled to be paid even if there is destruction of the work through fortuitous event The result is generally important.lease reviewer 2011 LEASE OF SERVICE DISTINGUISHED FROM PIECE OF WORK LEASE OF SERVICE Contract for a PIECE OF WORK The important object is the The important object is the labor performed by the lessor work done The result is generally not important. generally. UP. there can In case of breach. and said price cannot be lawfully demanded if the work is destroyed before it is finished and accepted LEASE OF THINGS DISTINGUISHED FROM SERVICES: LEASE OF THINGS LEASE OF SERVICES Object of the contract is a Object is some work thing Lessor has to deliver the Lessor has to perform some thing leased work or service In case of breach. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . no action be an action can be taken Sales and lease comments and cases by hector de leon.

UP.lease reviewer 2011 LEASE OF SERVICES DISTINGUISHED FROM AGENCY LEASE OF SERVICES AGENCY It is based on employment It is based on representation The lessor of services does Agent represents his principal not represent his employer and enters into juridical acts nor does he execute juridical acts Principal contract Preparatory contract LEASE DISTINGUISHED FROM SALE: LEASE SALE Only the enjoyment or use is Ownership is transferred transferred Transfer is temporary Transfer is permanent The lessor need not be the Seller must be the owner or owner at least authorized by the owner at the time it is delivered Price of the matter is not Price of the thing is usually usually mentioned. being fixed in the contract immaterial Sales and lease comments and cases by hector de leon. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 .

lease reviewer 2011 **In case of doubt. the intention of the parties is an important factor in determining the contract entered into. UP. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . LEASE DISTINGUISHED FROM COMMODATUM: LEASE COMMODATUM Consist of cession of the use Consist of cession of the use of a thing to another of a thing to another It is onerous Essentially gratuitous LEASE DISTINGUISHED FROM USUFRUCT LEASE USUFRUCT Ownership is not necessary Ownership is necessary It is generally a personal It is always a real right right and is a real right only by exception It is limited to the use it includes all possible uses specified in the contract and enjoyment of the thing Sales and lease comments and cases by hector de leon.

last will or prescription Usufructuary has duty to make repairs Usufructuary has duty to pay taxes Usufructuary may constitute a sublease Sales and lease comments and cases by hector de leon. contract. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . UP.lease reviewer 2011 Lessor places and maintains Owner allows the the lessee in the peaceful usufructuary to use and enjoyment of the thing enjoy the property Its term is generally for a definite period Its term may be for an indefinite period It may be created by contract as a general rule Lessee has no duty to make repairs Lessee has no duty to pay taxes Lessee cannot constitute a usufruct of the property leased It may be created by law.

or in some other useful things. some other prestation .1933) ** PRICE IN LEASE: ts. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . Sales and lease comments and cases by hector de leon. UP. But is regarded as having the character more of a partnership rather than a lease.lease reviewer 2011 LEASE DISTINGUISHED FROM MUTUUM LEASE MUTUUM Owner does not lose his Loses ownership of the thing ownership loaned which becomes the property of the borrower or debtor Lessor lessee relationship Real or personal property Governed by frauds Not governed statute Creditor/ debtor or obligee /obligor relationship Only money or any other fungible things of Not governed Governed by usury law **Simple loan may be gratuitous or with a stipulation (art.when the price consists of a certain percentage of the fruits obtained from the thing.

and the thing leased is rural land.lease reviewer 2011 Amount of Rent the parties are not able to fix the price. 1682.  If the thing is neither rural nor urban land.there must always be a period.1682 shall apply. it is considered as on for life. UP. ending upon the death of the party who would have terminated the contract. PERIOD OF LEASE:  When the lease is for such time as the lessor or lessee may please. is understood to have been for all the time necessary for the gathering of the fruits which the whole estate leased may yield in one year.  CANNOT be perpetual. when its duration has not been fixed. 1687 governs. if it is urban land art. art. or which it Sales and lease comments and cases by hector de leon. If the lessee has entered upon the possession and enjoyment of the thing. he will be liable for the damages for the occupation of the thing. The lease of a piece of rural land. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . the provisions of the two articles should be applied by analogy. or the basis for its determination. which may be definite or indefinite  If the period is indefinite. the contract is ABSOLUTELY VOID. RURAL LAND Art.

and from day to day. URBAN LAND Art. UP.1491) Lease of Real Estate Every lease of real estate may be recorded in the Registry of Property to be binding upon 3rd persons. it is understood to be from year to year.lease reviewer 2011 may yield once. if it is monthly. if the rent agreed upon is annual. from month to month. 1490. Rent Monthly Weekly Daily Courts can fix a longer term lessee occupied premises for more than a year lessee has been in possession for over six months lessee has stayed in the place for over one month CAPACITY OF LESSEE Those who are disqualified to buy certain things cannot lease such things. Sales and lease comments and cases by hector de leon. from week to week. although two or more years have to elapse for the purpose. (ART. 1687.1646. if the rent is to be paid daily. If the period for the lease has not been fixed. if the rent is weekly. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 .

1649. although it is not recorded upon the certificate of title. without prejudice to his responsibility for the performance of the contract toward the lessor. would not require the lessor’s consent. The lessee cannot assign the lease without the consent of the lessor. unless there is a stipulation to the contrary. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . in whole or in part. When in the contract of lease of things there is no express prohibition. unless there is an express stipulation to the contrary.lease reviewer 2011 Purchase of Leased Land here a purchaser of land at the time of the purchase has FULL KNOWLEDGE of the fact that the land has been leased to a third person. ASSIGNMENT OF LEASE Art. he is BOUND to respect said lease.  However. 1650. the lessee may sublet the thing leased. SUBLEASE Art. UP. and not of the contract itself. Sales and lease comments and cases by hector de leon. a mere transfer of rights of the lessee.

lease reviewer 2011 ASSIGNMENT OF LEASE VS. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . the original lease contract subsists and is binding on the lessee Succession by particular Juxtaposition of 2 leases title to one contract of lease Lessee remains a party in Lessee is disassociated from the contract the original contract of lease Sublessee does not have any Assignee has a direct action direct action against the against the lessor. the original lessee is released Sublease Merely another contract of lease. UP. in Sales and lease comments and cases by hector de leon. the lessee may sublet the thing leased. where the original lessee becomes in turn a lessor Even when the lessor consents to the sub-lease. (2) When in the contract of lease. and when the lessor gives his consent. SUBLEASE: Assignment of lease There is a transfer to a third person of the rights and obligations arising from the lease contract A sale of the lessee’s rights. or damages only. there is no express prohibition. there lessor being novation Subleasing is allowed unless Assignment is not allowed there is an express unless the lessor gives his prohibition consent (1) Remedy when property is subleased despite prohibition: rescission and damages.

the lessor must collect first form the lessee .lease reviewer 2011 whole or in part. for any rent due to the lessor from the lessee which the latter failed to pay . the sublessee becomes liable (subsidiary liability) LEASE DISTINGUISHED FROM DEPOSIT: LEASE Enjoyment or use of thing leased is the essential purpose The lessor cannot demand the thing leased before the expiration of the contract DEPOSIT the safekeeping of the thing delivered is the principal purpose The depositor can demand the return of the subject matter at will Sales and lease comments and cases by hector de leon. the sublease will still be allowed .if the lessee is insolvent.if the prohibition to sublease is not express but only implied.a lessee may sublease the thing unless there is an express prohibition to do so . without prejudice to his responsibility for the performance of the contract toward the lessor. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 .remedy of lessor if lessee violates prohibition: action for rescission of the lease and may seek for damages . UP. for all acts which affect the use and preservation of the thing leased 2.duration of sublease cannot be longer than that of the lease to which it is dependent RESPONSIBILITIES OF A SUBLESSEE TO THE LESSOR: 1. (a) House Rental Law (RA 877) — there is a presumption that there would be no sublease unless the lessor allows it (b) obligation of sublessee to lessor SUBLEASE .

lease reviewer 2011 Both movable and Only movable may be the immovable may be the object object Onerous Gratuitous Consensual Real contract perfected upon the delivery of the object thereof LEASE OF CHATTELS DISTINGUISHED FROM EMPLOYMENT: LEASE OF CHATTELS Lessor and lessee relationship Loses control or management of the chattel No control or supervision over the lessee Lessee pays rent to the lessor for the enjoyment or use of the chattel EMPLOYMENT Employee employer relationship Retains control or management over his chattel Exercises control and supervision over his employee Employer pays wage or salary for the services of the employee LEASE OF WORK/SERVICE DISTINGUISHED FROM PARTNERSHIP: LEASE OF WORK No principle of representation PARTNERSHIP Every partner is an agent of the partnership for the purpose of its business Lessor performs a material act Partners enter into commercial for the benefit of the employer or business transactions for the realization of profits Only 2 persons are involved Juridical personality separate and distinct from that of each of the partner is formed Work/service is dependent upon Partners perform acts conducive the ends or purpose of the lessee to their own business purposes Sales and lease comments and cases by hector de leon. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . UP.

and he shall be liable for the damages which by his neglect may be suffered by the owner. the lessee is obliged to tolerate the work.It is the duty of the lessee to give NOTICE of the need of repairs to the lessor. 4. .lease reviewer 2011 OBLIGATIONS OF THE LESSOR (Art. the rent shall be reduced in proportion to the time-including the 40 daysSales and lease comments and cases by hector de leon. Effect of Urgent Repairs  During the lease it should become necessary to make some urgent repairs upon the thing leased. 3. 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. the filling of a vacant lot is not a repair nor the constructions of a house. 2. UP. which cannot be deferred until the termination of the lease. to maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract. unless there is a stipulation to the contrary. hence. Not to alter the form o REPAIRS – implies the putting back of something in the condition in which it was originally o IMPROVEMENT – is the adding of something new thereto. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . .  If the repair lasts for more than 40 days.lessor is NOT bound to make repairs caused by the lessee himself. to deliver the thing which is the object of the contract in such condition as to render it fit for the use intended. 1654) 1.

 When the work is of such a nature that the portion which the lessee and his family need for their dwelling becomes uninhabitable. to avoid imminent danger.A third person claims legal right to enjoy the premises . Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . may order the repairs at the lessor’s expense.lease reviewer 2011 and the part of the property of which the lessee has been deprived. the lessor fails to make urgent repairs.  If after having been notified. Dangerous Conditions:  The lessee may terminate the lease at once by notifying the lessor. even if at the time the contract was perfected the former knew of the dangerous condition or waived the right to rescind the lease on account of the condition. TRESPASS IN LEASE o Trespass in fact (perturbacion de mere hecho) . The lessor cannot alter the form of the thing leased in such a way as to impair the use to which the thing is devoted under the terms of the lease.Lessor will not be held liable o Trespass in law (perturbacion de derecho) .Lessor will be held liable Sales and lease comments and cases by hector de leon. Alteration Art.Physical enjoyment is reduced . UP. he may rescind the contract if the main purpose of the lease is to provide a dwelling for the lessee. 1661. the lessee.

Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . 3. Increase and Decrease of Rent net of the assessed violation of the property Failure to Pay for Rent ction. and with respect to the time. 2. the custom of the place shall be followed. Place and Time ayment of rent shall be made at the domicile of the lessee. according to the custom of the place. 1657) 1. pay the expenses for the deed of lease. UP. and in the absence of stipulation. pay the price of the lease according to the terms stipulated.lease reviewer 2011 OBLIGATIONS OF THE LESSEE (Art. use the thing leased as a diligent father of a family devoting it to the use stipulated. Pay Rent ises only when the contract has been actually carried into effect by the delivery of the thing leased to the lessee for the purpose stipulated in the contract. Sales and lease comments and cases by hector de leon. to that which may be inferred from the nature of the thing leased. recover the unpaid rent. plus accrued legal interest thereon at the rate of 6% per year.

1662-1667) o Right of lessee to suspend payment of rentals Art. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . o Right to ask for rescission Liability for Breach of Duties o If the lessor or lessee should not comply with the obligation set forth in ART 1654 and 1657. in the absence of stipulation. Pay Expenses for the Deed of Lease (Art. the aggrieved party may ask for: (1) rescission of the contract. (3) only damages. according to the custom of the place. 1658. allowing the contract to remain in force o The lessor cannot be held responsible for damages from defects unknown to both parties. o The lessee is liable for any deterioration caused by members of his household and by his guest and visitors. unless he proves that it took place without his fault.lease reviewer 2011 Use the Thing Leased as a Diligent Father o Standard: diligent father of a family. (2) indemnification for damages. UP. o The lessee is responsible for the deterioration of the thing leased. The lessee may suspend the payment of the rent in case the lessor fails to make the necessary repairs or to maintain the lessee in peaceful and adequate enjoyment of the property leased. Sales and lease comments and cases by hector de leon. to that which may be inferred from the nature of the thing leased.

(3) recover the unpaid rents (4) eject the tenant from the land o The execution of the deed shall be equivalent to delivery but this is a rebuttable presumption. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . the aggrieved party is entitled to such damages but may not upon rescission of the contract recover the damages that are appropriate only where the performance is demanded. the lessor has still the right to hold the lessee responsible until the termination of the lease. o If the thing leased has never been placed in possession of the lessee. (2) the lessor has a right to rescind the contract. Sales and lease comments and cases by hector de leon. he has the remedy of rescission. Enforcement of Lease o Where the lessor resumes possession of his leased property for its protection after the lessee has abandoned the same. and the latter has not paid the proper rents. by reason of his inability to pay to: (1) return the leased property. Rescission of the Contract Where the plaintiff alleges and submits proof that the defendant is in possession of a parcel of land as lessee.lease reviewer 2011 Alternative Remedies o Performance of the contract and rescission o In either case. UP. he may be compelled.

when the period agreed upon or that which is fixed for the duration of leases (see 1682. (2) by the total loss of the thing. (3) by the resolution of the right of the lessor. (5) by rescission due to non-performance of the obligation of one of the parties. such as when the lessor is usufruct is terminated. lack of payment of the price stipulated. it is understood that there is an implied new lease. 2. 1687) has expired. the duration of the tenancy is governed by article 1682 and 1687. Period o If at the end of the contract the lessee should continue enjoying the thing leased for fifteen days with the acquiescence of the lessor. (4) by the will of the purchaser or transferee of the things. GROUNDS FOR EJECTMENT 1. UP. not for the period of the original contract but for the time established in art. and unless a notice to the contrary by either party has previously given. Sales and lease comments and cases by hector de leon. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . 1682(rural) and 1687(urban) o When the parties have made no agreement and the tenant remains in possession with the acquiescence of the lessor for 15 days after the expiration of the term.lease reviewer 2011 Termination of Lease (1) by the expiration of the period.

devoting it to the use stipulated. 1547. Sales and lease comments and cases by hector de leon. 4.  Art. when the lessee devotes the thing leased to any use or service not stipulated which causes the deterioration thereof. when lessor acted with fraud and in bad faith by concealing the defect and not revealing it to the lessee. and in the absence of stipulation. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 .  But this liability for warranty of the thing leased does not amount to an obligation to indemnify the tenant for damages. UP. 2)-to use the thing leased as a diligent father of a family. is not applicable to successive renewals. according to the custom of the place. 1567. which is only to be allowed. to that which may be inferred from the nature of the thing leased.  The lessor is liable for the warranty of the thing leased against any hidden defects it may have. violation of any of the conditions agreed upon in the contract. 1561. Tacit Renewal o The fifteen-day period which brings about a tacit renewal of the lease. 1568. Warranty of Lessor:  IN the cases where the return of the price is required. 1566.lease reviewer 2011 3. REDUCTION shall be made in proportion to the time during which the lessee enjoyed the thing. 1569  Liability for the warranty is not equivalent to liability in damages. 1555. (1657. 5. par. even when UNKNOWN to said lessor.

has expired. (4) When the lessee devotes the thing leased to any use or service not stipulated which causes the deterioration thereof. o The landlord has the right to increase the rent after the expiration of the stipulated period. or if he does not observe due diligence in its use. o When the lease contract does not have a definite period.lease reviewer 2011 Judicial Ejectment o The lessor may judicially eject the lessee for any of the following causes: (1) When the period agreed upon. (2) Lack of payment of the price stipulated. UP. whether the termination coincides with the rent day or not. PROPERTY Sales and lease comments and cases by hector de leon. (3) Violation of any of the conditions agreed upon in the contract. And if no period is stipulated. the lease will terminate upon the expiration of 30 days from the receipt of notice. or that which is fixed for the duration of leases under Art 1682 (rural) and 1687(urban). notice by the lessor of an increase in rent is equivalent to notice of termination of the original agreement. Ateneo and San beda civil law reviewer | jen_biltz_albano/2011 . but is terminable upon 30 days’ notice. in a lease of urban property.