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Civil Law

LEASE It may be created by It may be created by law,

contract as a general contract, last will or
CONTRACT OF LEASE – a contract by which rule prescription
one person binds himself to grant temporarily, Lessee has not duty to Usufructuary has duty to
the use of a thing or the rendering of some make repairs make repairs
service to another who undertakes to pay Lessee has not duty to Usufructuary has duty to
some rent, compensation, or price. pay taxes pay taxes
Lessee cannot Usufructuary may
constitute a usufruct of constitute a sublease
the property leased
CHARACTERISTICS: (lease of things)
1. Consensual
2. Principal contract
3. Nominate
Generally, a lease of real property is a personal
4. Subject matter must be within the commerce of
5. Purpose should not be minimal
1. if it is for more that one year and to be
6. Onerous
enforceable it must be in writing
7. Period is temporary
2. if it is registered with Registry of Property,
8. Period may be definite or indefinite
regardless of its period
9. Lessor need not be the owner
RENT – the compensation either in money, NOT REGISTERED:
provisions, chattels or labor, received by the 1. the lease is not binding on third persons;
lessor from the lessee 2. such third person is allowed to terminate
the lease in case he buys the property
Requisites: from the owner-lessor;
1. must not be fictitious or nominal otherwise the 3. actual knowledge of existence and
contract is considered essentially gratuitous duration of lease, is equivalent to
2. must be capable of determination registration;
3. may be in the form of products, fruits, 4. stranger knows of the existence of the
construction; as long as it has value lease, but was led to believe that the
lease would expire soon or before the new
LEASE DISTINGUISHED FROM USUFRUCT lease in favor of him begins, the stranger
LEASE USUFRUCT can still be considered innocent.
Ownership on the part Ownership of the thing on
of the lessor is not the part of the grantor is KINDS OF LEASE
necessary to constitute necessary to constitute a
a contract of lease usufruct 1. Lease of things or properties whether
It is generally a It is always a real right immovable or movable property
personal right and is a ƒ one of the parties binds himself to give to
real right only by QuickTime™ and a another the enjoyment or use of a thing
exception TIFF (Uncompressed) decompressor ƒ for a price certain
are needed to see this picture.
It is limited to the use It includes all possible ƒ for a period which may be definite or indefinite
specified in the uses and enjoyment of ƒ but in no case will the period exceed 99 years.
contract the thing
Lessor places and Owner allows the
- only things which are within the commerce of
maintains the lessee in usufructuary to use and
man; lease of properties belonging to the
the peaceful enjoy the property
public domain cannot be proper subjects of
enjoyment of the thing
lease; such contracts are void.
Its term is generally for Its term may be for an
a definite period indefinite period

—Adviser: Dean Cynthia Roxas-Del Castillo; Heads: Joy Marie Ponsaran, Eleanor Mateo; Understudies: Joy Stephanie
Tajan, John Paul Lim—
Civil Law Summer Reviewer

PERSONS DISQUALIFIED TO BECOME NOTE: - Owner has the right t fix the rent
LESSEES: because the contract is consensual and
(a) husband and wife cannot lease to each other not imposed by law
their separate properties (exception: - Increasing the rent is NOT an absolute
separation of property) right of the lessor
(b) those disqualified due to fiduciary - If the rent is fixed for the first time, courts
relationship cannot interfere; but if it is a renewal, the
- guardian: ward courts can settle the disagreements
- agent: principal 2. Lease of work which refers to contract for
- executor & administrators a piece of work
- public officer: state property - one of the parties binds himself to produce a
- justices, judges: property under result out of his work or labor and the other
litigation party binds himself to pay a remuneration
- others disqualified by law therefor.


- may lease lands of public domain with an area FURNISHES WORK & MATERIAL:
of 500 has. and may acquire not more than 12 (a) duty to deliver
has. (b) duty to transfer ownership
(c) duty to warrant eviction and hidden
- at least 60% Filipino-owned, may lease lands of
public domain for a period of 25 years, renewable REMEDY OF EMPLOYER IN CASE OF
for not more than 25 years; the area not to DEFECTS:
exceed more than 1,000 has. [one thousand - ask contractor to remove the defect or
hectares] to execute another work; if contractor
fails or refuses, employer can ask
RULE ON LEASE OF THINGS WHEN LESSEE another at the contractor’s expense
IS AN ALIEN 3. Lease of service
(a) 99-year limit applies to aliens as long as it is -one party binds himself to render some
a lease of personal property service to the other party consisting his own
(b) aliens CANNOT lease public lands, and free activity of labor, and not its result and the
cannot acquire private lands other party binds himself to pay a
except through succession remuneration therefor.
(c) if lease of real property (private lands), 3 KINDS:
maximum of 25 years renewable for another a. household
25 years (P.D. 713) b. contract of labor
(d) under the Investor’s Lease Act of 1995, the c. common carriers
25-year period was
extended to 50 years renewable for another CONTRACT OF CONTRACT OF
25 years provided the following conditions PIECE OF WORK LEASE OF SERVICE
are met: (Locatio Operis) (Locatio Operarum)
i. lessee must make investments The object of contract The object of contract is
ii. lease is approved by DTI is the result of the the service itself and
iii. if terms are violated, DTI can work without not the result which it
terminate it considering the labor generates
NOTE: the ILA did not doQuickTime™away with and a P.D. 713, under that produced it
TIFF (Uncompressed) decompressor
ILA the consent of DTI are is required
needed while in P.D. 713 it
to see this picture. If the result promised Even if the result
is not. is not accomplished, intended is not attained,
the lessor or the services of the
FORM OF CONTRACT OF LEASE OF THINGS promissor is not lessor must still be paid
- may be made orally but if the lease of real entitled to
property is for more than one year, it must compensation
be in writing under the statue of frauds [still
valid but unenforceable]

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Civil Law Summer Reviewer

OBLIGATIONS OF THE LESSOR (Art. 1654) Subleasing is Assignment is not

1. to deliver the thing which is the object of the allowed unless there allowed unless the
contract in such condition as to render it fit for the is an express lessor gives his consent
use intended; prohibition
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 RESPONSIBILITIES OF A SUBLESSEE TO
there is a stipulation to the contrary; THE LESSOR:
3. to maintain the lessee in the peaceful and 1. for all acts which affect the use and
adequate enjoyment of the lease for the entire preservation of the thing leased
duration of the contract. 2. for any rent due to the lessor from the
lessee which the latter failed to pay
OBLIGATIONS OF THE LESSEE (Art. 1657) - the lessor must collect first form the
1. pay the price of the lease according to the terms lessee
- if the lessee is insolvent, the sublessee
2. use the thing leased as a diligent father of a
family devoting it to the use stipulated, and in the becomes liable (subsidiary liability)
absence of stipulation, to that which may be
inferred from the nature of the thing leased,
according to the custom of the place;
3. pay the expenses for the deed of lease.


1. when the period agreed upon or that which is
fixed for the duration of leases (see 1682, 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.
5. (1657, par. 2)

- a lessee may sublease the thing unless there is
an express prohibition to do so
- if the prohibition to sublease is not express but
only implied, the sublease will still be allowed
- remedy of lessor if lessee violates prohibition:
action for rescission of the lease and may seek
for damages
- duration of sublease cannot be longer than that
of the lease to which it is dependent


QuickTime™ and a
TIFF (Uncompressed) decompressor
are needed to see this picture.

Lessee remains a Lessee is disassociated

party in the contract from the original
contract of lease
Sublessee does not Assignee has a direct
have any direct action against the
action against the lessor, there being
lessor novation

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