LEASE

Article 1643:
In the lease of things, one of the parties binds himself to give to another the enjoyment or use of a thing
for a price certain, and for a period which may be definite or indefinite. However, no lease shall be valid
for more than 90 years shall be valid.

Article 1644:
In the lease of work or service, one of the parties binds himself to execute a piece of work or to render
to the other some service for a price certain, but the relation of principal and agent does not exist
between them.

SUBLEASE

Article 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.

SUBLEASE VS ASSIGNMENT OF LEASE

In a sublease situation, the lessee continues to be liable to the lessor for the payment of rent. The sublessee
pay rent not to the lessor but to the lessee/sub-lessor.

On the other hand, in an assignment of rights, the assignee steps into the shoes of the lessee who is
thereupon freed from his obligations under the lease because from then on it is the assignee who is liable to
the lessor for rental payment.

In other words, in an assignment of rights, there is a change of lessor, which is not so in a sublease situation.
It is thus understandable why it is not necessary for the lessor to give his consent to a sublease, while in an
assignment of rights, it is a necessity for the lessor to require his prior consent. This is for the lessor’s own
protection.

IMPLIED NEW LEASE (TACITA RECONDUCCION)

- Lease which arises if at the ends if at the end of the lease contract the lessee should continue
enjoying the thing leased for 15 days with acquiescence of the lessor, unless a notice to the
contrary had previously been given by either party.

GROUNDS FOR JUDICIAL EJECTMENT (section 7, RA 9161)

SECTION 7, RA 9161 PROVISION:

Section 7. Grounds for Judicial Ejectment. – Ejectment shall be allowed on be the following
grounds;

(a) Assignment of lease or subleasing of residential units in whole or part, including the
acceptance of boarders or bedspacers, without the written consent of the owner/lessor.
(b) 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 rental agreed upon, the leased may either deposit by
way of consignation, the amount in court, or with the city or municipal treasurer, as the case
may be, 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 rental within ten (10) days of every current month.
Failure to deposit the rental for three (3) month shall constitute a ground for ejectment. If an
ejectment case is already pending, the court upon proper motion may order the lessee or any
person or persons claiming under him to immediately vacate the leased premises without
prejudice to the continuation of the ejectment proceedings. At any time, the lessor may, upon
the authority of the court, withdraw the rentals deposited.

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 treasure and to the bank where deposit
was made, shall be allowed to withdraw the deposits;

(c) 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 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 one year from the
time of repossession;

(d) 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 promises: Provided, however. That the new rental
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

(e) Expiration of the period of the lease contract

Grounds for judicial ejectment:

1. Assignment of lease or subleasing without written consent of the owner
2. Arrears in payment of rent for a total of 3 months
3. Legitimate need of the owner/lessor to repossess his or her property for his own use or for the
use of any immediate member of his family as a residential unit
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
5. Expiration of the lease contract

Unlawful detainer
- An action for unlawful detainer exists when a person unlawfully withholds possession of any land
or building against or from a lessor, vendor, vendee or other persons, after the expiration or
termination of the right to hold possession, by virtue of any contract, express or implied. This
 summary action should be filed with the municipal trial courts within one year after the
occurrence of the unlawful deprivation or withholding of possession.

- Beyond the one-year period, the real right of possession may be recovered through the filing of
an accion publiciana with the regional trial courts.

Demand letter
- Letter demanding the lessee to vacate the property upon any of the grounds of ejectment
- Demand or notice to vacate is not a jurisdictional requirement when the action is based on the
expiration of the lease.
- Lessor can only proceed against the lessee after demand (Section 2, rule 70, rules of court)
Demand must contain:
a. Demand to pay or comply with the conditions of the lease
-AND-
b. Demand to vacate

When to file:
1 year after such unlawful deprivation or withholding of possession (section 1, rule 70, rules of court)

Where to file:
Municipal Trial Court (section 1, rule 70, rules of court)

After the lapse of 1 year, can you still file for ejectment?
Yes, by accion reinvindicatoria to the RTC

There are three kinds of actions for the recovery of possession of real property:
1. Accion interdictal
- or an ejectment proceeding which may be either that for forcible entry (detentacion) or unlawful
detainer (desahucio), which is a summary action for recovery of physical possession where the
dispossession has not lasted for more than one year, and should be brought in the proper inferior court

2. Accion publiciana
- the plenary action for the recovery of the real right of possession, which should be brought in
the proper Regional Trial Court when the dispossession has lasted for more than one year; and

3. Accion reinvindicatoria
- or accion de reivindicacion, which is an action for the recovery of ownership which must be
brought in the proper Regional Trial Court.

What if the defendant and plaintiff reside in the same barangay?

Barangay conciliation is needed.

Katarungang Pambarangay rules are meant to reduce court litigation and prevent the deterioration of the
quality of justice, which is caused by indiscriminate filing of cases in courts. Section 412(a) of RA 7160
requires parties to undergo a conciliation process before the Lupon chairman or the Pangkat as a
precondition to the filing of a complaint in court
Effect of violation of contract of lease:
Violation of any condition of lease would constitute a breach of the ease contract.
It is a ground for ejectment of the lessee

If the prohibition against sublease is violated, is it a ground for the rescission of the contract?
Yes. It is a ground for the rescission of the contract.
There is no need for an action of rescission before filing an unlawful detainer case.

Examples of violation of lease conditions:

1. Subleasing the property when there is a prohibition against it
2. When the property is leased for a specific purpose, and you use the property for another purpose
without permission from the lessor.
Lack of payment of the price stipulated:
- When the lessor fails to pay the price agreed upon in the contract of lease.
- Lessee is obliged to pay the price of the lease according to the terms stipulated. Failure to comply
with this principal duty entitles the lessor to ask for rescission of the lease or fulfilment with right
to damages in either case.
- Mere failure to pay rent does not render the possession of the lessee per se unlawful. It is the
failure to pay the rents after a demand therefore is made that entitles the lessor to bring an action
of unlawful detainer.
- If default in payment of rent is based on the fact that the rent sought to be collected is not that
agreed upon, an action for ejectment will not lie.

Is non-payment for a month a ground for ejectment?

No. According to section 7 of ra 9161, there must be non payment of rent for 3 months before the lessor
may commence an action for ejectment.

What if the parties agree that the lease may be renewed, can the lessor impose a higher rate even if
lessee does not want?

No, the lessor may not impose a higher rate if the lessee does not want. The renewal of a lease is at the
option of both parties. In the absence of stipulations as to the rental of the renewal of lease contract, the
old terms shall be followed in the renewed lease.

In implied new lease, the original terms of the contract which are revived are only those which are
germane to the lessee’s right of continued enjoyment of the property leased or related to such possession
such as:
a. Amount of rental
b. The date when it must be paid
c. Care of such property
d. Responsibility for repairs etc.
Section 9. Grounds for Judicial Ejectment. - Ejectment shall be allowed on the following grounds:

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

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;

Legitimate need of the owner/lessor to repossess his or her property for his or her own use of for the
use of an 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 one (1) year from the time of repossession;

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, further, 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

Expiration of the period of the lease contract

He is in mora accipiendi, the lessee may consign the payment to the court

Rent control act grounds for ejectment:

Section 9. Grounds for Judicial Ejectment. - Ejectment shall be allowed on the following grounds:

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

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;

Legitimate need of the owner/lessor to repossess his or her property for his or her own use of for the
use of an 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 one (1) year from the time of repossession;

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, further, 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

Expiration of the period of the lease contract

What is “as is where is”?

What is the law on improvements?

Lessee is entitled to reimbursement of one half of the value of the improvements introduced at that
time.

Requisites for reimbursement:

a. The lessee should introduce improvements in good faith

b. The improvements should be suitable to the use for which it is intended, without altering
the form and substance of the property leased
c. Improvements must be useful

Ornamental expenses: not entitled to reimbursement