What is a contract of lease?

there is a stipulation in the contract of sale (binds

purchaser) // when the purchaser knows of the
Contract of lease is an agreement whereby one person existence of the lease.
(lessor) binds himself to grant temporarily the
enjoyment/use of a thing // to render some work/ Actual knowledge is equivalent to registration.
service to another (lessee) who undertakes to pay rent,
compensation or price therefor (NCC 1642). Does lease create personal/real rights? If it exceeds
one year?
Who are the parties to a contract of lease?
GR: Lease is only a personal right
Lessor and Lessee
E: in the case of lease of real estate recorded in the
Distinguish lease v. usufruct Registry of Property which makes it binding upon 3rd
persons, like a purchaser.
LEASE USUFRUCT
A real right only in case Always a real right Who is a lessor? Anotina-transfer? Pwedenghindi
of the lease of real owner? May forever ba?
property where the lease
is registered Lessor is the person who binds himself to grant
Lessor may/may not be Creator of the right must temporary right of enjoyment and use of a thing // to
the owner be the owner/one duly render some work/service
authorized by him
Lessor has the active Passive duty to allow the Consumable goods
obligation to maintain the usufructuary to enjoy/ Cannot be the subject matter of a contract of lease
lessee in the enjoyment use the property except when they are merely to be exhibited // when
or use of the property
they are accessory to an industrial establishment (NCC
Lessee generally pays no Usufructuary pays the
1645).
taxes annual charges and
taxes on fruits Who are disqualified?
Lessee generally has no Usufructuary is obliged to
obligation to pay for make the ordinary NCC 1490. The husband and the wife cannot sell
repairs repairs needed by the property to each other, except:
thing given in usufruct
Lessee cannot constitute Usufructuary may lease (1). When a separation of property was agreed upon
a usufruct on the the thing in usufruct to in the marriage settlements; or
property another
(2). When there has been a judicial separation of
GR: may be created only Created by law, contract,
property under Article [134 FC].
by contract last will and testament,
or prescription NCC 1491. The following persons cannot acquire by
GR: covers particular GR: covers all possible purchase, even at a public or judicial auction, either in
uses limited by the uses of the property person or through the mediation of another:
contract
(1). The guardian, the property of the person or
persons who may be under his guardianship;
Can there be lease over movable? Immovable?
(2). Agents, the property whose administration or
YES. Lease of things covers real and personal property.
sale may have been entrusted to them, unless the
The NCC does not have special provisions for the lease
consent of the principal have been given;
of movables.
(3). Executors and administrators, the property of
Provisions of the NCC on leases of lands are also
the estate under administration;
applicable to leases of personal property except those
provisions which by their nature and intent, can only be (4). Public officers and employees, the property of
applied where the object of the lease is immovable (De the State or of any subdivision thereof, or of any
Leon, 2011). government owned or controlled corporation, or
institution, the administration of which has been
Does lease contract have to be in writing?
entrusted to them; this provision shall apply to judges
NO. However, oral contracts of lease will not bind 3rd and government experts who, in any manner
persons in cases of lease of real estate except when whatsoever take part in the sale;
(5). Justices, judges, prosecuting attorneys, clerks
of superior and inferior courts, and other officers and
employees connected with the administration of justice,
the property and rights in litigation or levied upon an
execution before the court within whose jurisdiction or
territory they exercise their respective functions;
this prohibition includes the act of acquiring by
assignment and shall apply to lawyers, with respect to
the property and rights which may be the object of any
litigation in which they may take part by virtue of their
profession;
(6). Any others specially disqualified by law.
Can the husband enter into the contract of lease over
the ACP w/o the consent of the wife?
NO.
For contract of lease to be valid, is it required to be
registered? What is the purpose of registration? Can
you bind w/o registration?
NO. Registration is made for the purpose of binding 3rd
persons only.
YES. When there is a stipulation in the contract of sale
(purchaser bound) [NCC 1676].
Actual knowledge is equivalent to registration (NCC
1648).
As a GR, can a lessee assign his rights? What about
sublease?
Lessee cannot assign the lease without the consent of
the lessor, unless there is a stipulation to the contrary
(NCC 1649).
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 (NCC 1650).
Sublease; if sub-lessee causes damage; to whom is
sub-lessee liable (lessor/lessee)?
Without prejudice to his obligation toward the sub-
lessor, the sub-lessee is bound to the lessor for all acts
which refer to the use and preservation of the thing
leased in the manner stipulated between the lessor and
lessee (NCC 1651).
1651 is an exception to NCC 1311.
Advances made by sub-lessee; lessee does not pay
lessor; can sub-lessee claim na di
nasiyapwedesingilindahil nag-advance nasiya?
NO. Payments of rent in advance by the sub-lessee shall
be deemed not to have been made, in so far as the
lessor’s claim is concerned, unless said payments were
effected in virtue of the custom of the place (NCC
1652[2]).
Rules on warranty?
Same as rules on warranty in contract of sale (NCC
1653[1]).
Who has the obligation to pay for necessary expenses
for the use and preservation of the thing?
Lessor. He is obliged to make on the thing during the
lease all the necessary repairs in order to keep it
suitable for the use for which it has been devoted,
unless there is a stipulation to the contrary (NCC
1654[2]).
Trespasser; hurt lessee; breach of obligation to
maintain peaceful and adequate enjoyment?
NO. The lessor’s obligation to maintain the lessee
arises when acts termed “legal trespass” disturb,
dispute, or place difficulties in the lessee’s peaceful
and adequate enjoyment of the leased premises that in
some manner cast doubt upon the right of the lessor to
execute the lease.
Warranty of the lessor is that the lessee shall not be
disturbed in his legal (not physical) possession.
Can lessee refuse/prevent lessor from entering the
premises?
YES. Nalimutanko lol basta for the duration of the
contract, the lessee has the right of possession and use
over the object of the contract, which includes the right
to exclude others from such use, including the lessor.
Lease over house; struck by lightning; only kitchen and
bathroom remain; rule?
If the destruction is partial, the lessee may choose
between a proportional reduction of the rent and the
rescission of the lease (NCC 1655[2nd sentence]).
**not really sure anotamangsagotdito. Di
komasyadonarinigyungsagotni classmate. Pero
parangsinabiataniyana since di napwedenggamitinsa
use to which the thing has been devoted (as dwelling),
considered extinguished nayung lease.
Can lessee bring action for forcible entry against
lessor?
YES. Basta may right pa rinsi lessee
Unlawful detainer; compromise agreement; breach
again thereafter; unlawful detainer again; can lessee
invoke res judicata?
NO. Different case namanyun.
Degree of care?
Lessee is obliged to use the thing as a 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 nature of the thing leased, according to the
custom of the place (NCC 1657[2]).
Can lessee suspend payment of rentals?
YES. In case the lessor fails to make the necessary
repairs or to maintain the lessee in peaceful and
adequate enjoyment of the property leased.
Termination of lease; damages?
Should any party not comply with the obligations set
forth in NCC 1654 and 1657, the aggrieved party may
ask for the rescission of the contract and
indemnification for damages // only the latter, allowing
the contract to remain if force (NCC 1659).
Right of first refusal? What is the consideration?
The consideration is the contract of lease itself. If right
of first refusal is constituted after the perfection of the
contract of lease, it is merely an offer and the parties
are not bound.
If the contract of lease contains a right of first refusal,
lessor is bound to make offer to lessee first.
Deterioration of the thing
The lessee is responsible for the deterioration/loss of
the thing leased, unless he proves that it took place
without his fault. This burden of proof does not apply
when the destruction is due to earthquake, flood,
storm, or other natural calamity (NCC 1667).
Implied lease?
If at the end of the contract the lessee should continue
enjoying the thing leased for 15 days with the
acquiescence of the lessor, and unless a notice to the
contrary by either party has previously been given, it is
understood that there is an implied new lease, not for
the period of the original contract, but for the time
established in NCC 1682 and 1687. The other terms of
the original contract shall be revived (NCC 1670).
Possessor in bad faith
If the lessee continues enjoying the thing after the
expiration of the contract, over the lessor’s objection,
the former shall be subject to the responsibilities of a
possessor in bad faith (NCC 1671).
NCC 449 (loses what he built, planted or sown without
indemnity);
NCC 450 (owner of land may demand the demolition of
the work/planting/sowing // may compel the
builder/planter to pay the price for the land, and sower
to pay rent);
NCC 451 (landowner entitled to damages);
NCC 452 (builder/planter/sower in bad faith entitled to
reimbursement for necessary expenses of preservation)
NCC 526 (when in bad faith)
NCC 546 (no right of retention pending reimbursement)
NCC 549 (possessor in bad faith shall reimburse the
fruits received and those which the legit possessor
could have received; he may remove improvements for
pure luxury provided the thing suffers no injury and the
lawful possessor does not prefer to retain them by
paying the value they may have at the time he enters
into possession)
Remedy: unlawful detainer
When is last day to give notice to prevent implied
lease?
15th day.
What are the terms that will be carried over? First
refusal?
Only those which are germane to the lessee’s right of
continued enjoyment of the property leased or related
to such possession (i.e. amount of rental, date when to
pay, care of the property, responsibility for repairs, etc.)
NO. No such presumption may be indulged in with
respect to special agreements (e.g. right of first refusal)
which by their nature are foreign to the right of
occupation or enjoyment inherent in a contract of lease
(Dizon v. Magsaysay [1974]).
How to terminate implied new lease?
Giving the notice required under NCC 1670 after the
expiration of the period provided under NCC 1682 and
1687.
E.g. kapag monthly basis; after 1mo, mag-eexpireyung
implied new lease, so beforemataposyung 15-day
period, bigayna ng notice.
Implied lease of rural lands?
??
Useful improvements and ornamental expenses (NCC
1678)
After the termination of the lease, the lessee is entitled
to ½ of the value of the useful improvements at that
time provided he made them in good faith, suitable to
the use for which the lease was intended, and without
altering the form or substance of the property leased.
Should the lessor refuse to reimburse, lessee may
remove the same even though the principal thing may
suffer damage thereby (necessary damage only).
In re: ornamental expenses, the lessee is not entitled to
reimbursements, but he may remove them provided no
damage is caused and the lessor does not choose to
retain them by paying their value at the time the lease
is extinguished.
Why can’t we apply builder in good faith to
lessor/lessee?
Lessee can never be in good faith because he is aware
that he has no claim to the property he leased.

COVERAGE OF EXAM: WHOLE SYLLABUS (EMPHASIS ON

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