LEASE As ordinary contracts, a contract of lease has 3 elements

a. consent of the parties b. object certain c. cause of the

Article 1642
obligation.
Contract of lease an agreement whereby one person
ARTICLE 1643
binds himself to grant temporarily the enjoyment or use
of a thing or to render some work or service to another Lease of things
who undertakes to pay rent, compensation or price.
Essence of Lease transmission of the temporary
Lease is only a personal right. It is only a real right only enjoyment or use by the lessee of a thing for a certain
by exception in the case of lease of real estate which period in consideration of the undertaking to pay rent.
makes it binding upon third persons.
The object of the lease must be within the commerce of
 In the absence pf registration, the purchaser man. – if it belongs to the state, it cannot be the object
may terminate the lease—when there is a of a lease.
stipulation in the contract of sale or when the
Subject matter of a lease- movable or immovable.
purchaser knows of the existence of the lease.
 In lease of chattels—lessor loses complete
A lease contract is not essential personal in character in
control over the chattel leased although the
the sense that the rights and obligations are
lessee would be responsible to the lessor should
transmissible to the heirs.
he make a bad use.
The death of a party does not excuse non performance
Ownership of thing lessor need not to be the owner of
of a contract.
the thing leased as long as he can transmit its enjoyment
Kinds of lease according to subject matter or use to the lessee since ownership is not being
transferred.
1. Lease of things- real or personal involving
obligation on the part of the lessor to deliver the Ex. Usufructuary may personally enjoy the thing in
thing which is the object and correlative right of usufruct or he may lease it to another but the lease
the lessee to the peaceful and adequate contract shall terminate upon expiration.
enjoyment for a certain price.
Easement not applicable. Cannot be leased.
2. Lease of work- refers to a contract for a piece
of work involving an obligation on the part of *Even the lessee himself may lease the property to
the contractor (lessor) to execute a piece of another.
work for the employer (lessee) in consideration
for a certain price or compensation. Consideration of the lease thing must be price certain,
3. Lease of service-involving an obligation on the generally called rent or rental in money or its equivalent
part of the housekeeper, laborer or employee, or (products, fruits or other useful things)
common carrier to do or perform a service for Price certain—the price of the lease or rent has been
the head of a family or master, employer or determined by the parties or is atleast capable of
passenger or shipper of goods in consideration determination under the contract.
of a compensation.
Since a lease is essentially a consensual contract, in the
Characteristic and elements of the contract absence of law fixing a ceiling on rental—the LESSOR
Contract of lease is a has a right to fix the amount of the rent, upon expiration
of the contract, to demand an increase.
1. Consensual
2. Bilateral  Lessee may agree with the rent or not to consent
3. Onerous to the lease.
4. Commutative During the period fixed lessor cannot increase the
5. Nominate rental without the consent of the lessee. Neither can the
6. Principal. court fix a different rental.
In lease as in sale, there is an exchange of equivalent Period of lease
values.
- It may be definite or indefinite.
 The use by the lessee of the thing, work or - Period is temporary not perpetual.
service is considered the equivalent to the rent,
compensation or price paid to the lessor. a. when a period is definite or fixed
- longest is 99 years because it is an unsound economic An express agreement which gave the lessee the sole
policy to allow ownership and enjoyment to be option to renew the lease is frequent and subject to
separated for a very long time. statutory restrictions, valid and binding on the parties.
b. in case of period fixed is more than 99 years The right of renewal constitutes a part of the lessee’s
interest in the land and forms a substantial and integral
- lease should be considered as having expired after the
part of the agreement.
end of the said term.
The lessee has a right to elect whether to continue with
- when there is an implied new lease, the lease will be
the lease or not, once he exercise his optio to continue
for an indefinite time.
and the lessor accepts, both parties are bound by the new
c. if a term is fixed but it is indefinite but it can be lease agreement.
inferred that a period was intended
 Their rights and obligation become mutually
- the court can fix the duration. fixed and the lessee is entitled to retain
possession of the property for the duration of
- a contract established to be leased can only be for a the new lease and the lessor may hold him liable
determinate period for a lease, by its very nature must for the rent.
be temporary.  Lesee cannot escape liability even if he should
d. if no period is fixed subsequently decide to abandon the premise.

- in cases for leases of urban land. The lessor is bound by the option he has conceded to the
lessee.
e. a verbal contract of lease
 The lessee likewise becomes bound only when
- for as long as the lessees are doing business and as long he exercises his option and the lessor cannot be
as they can pay the rents considered to be a lease from excused from performing his part of the
month to month. agreement.
f. lease of things during the lifetime of one of the “may be renewed for a like term at the option of the
parties is for in indefinite period lessee” refers to the period. It is silent as to what the
specific terms and condition of the renewed lease shall
- ending upon the death of either party
be.
g. continuance and fulfillment of a lease of a house
When contract failed to specify the terms and
cannot be made dependent solely upon the
conditions to be embodied in the renewed contract
uncontrolled choice of the lessee on won the lessee
would pay rentals, depriving the lessor of any say on  A stipulation to renew always relates to the
the matter. contract in which it is found and the rights
granted UNLESS it expressly provides for
 if the lessor elected to pay rentals—lessor would
variations in the ters of the contract to be
never be able to terminate the lease.
renewed.
if the lessor should desire to continue the lease, the  A general covenant to renew or extend a lease
lessee could thwart his purpose by the simple expedient which makes no provision as to the terms of a
of stopping the payment of rental. renewal or extension implies a renewal or
extension upon the same terms as provided in
Principle of mutuality of contracts the contract must the original lease.
bind both contracting parties, its validity or compliance  In the lease contract under consideration
cannot be left to the will of one of them. there is no provision to indicate that the renewal
Obligations arising from contracts have the force of law will be subject to new terms and condition that
between the contracting parties and there must be the parties may yet agree ipon.
mutuality between them. In case of uncertainty as to the meaning of a provision
The ultimate purpose is to render void a contract granting extension to a contract of lease—the tenant is
containing a condition which makes its fulfillment one favored not the landlord.
dependent solely upon the uncontrolled will of one of Reason: the landlord having the power of stipulating in
the contracting parties. his own favor has neglected to do so.
The lessor could easily defeat the lessee’s right of
renewal by simply imposing unreasonable and onerous
 conditions to prevent the parties from reaching an latter may use the certain kind ad quality shall be
agreement. time and return it the paid the contract is a loan
contract is called or mutuum.
The lease contract stipulates an indefinite period, the commodatum
lease continues for as long as the lessee is paying the Onerous contract Gratuitous
rent. although the rent may
subsequently be
Estoppel against lease condoned or remitted
- A lessee is estopped from asserting title to the thing Essentially personal in Purely personal in
lesed as against the lessor or to deny the lessor’s title character and the right character and
or to assert a better title not only to himself but also may be transmitted to the consequently the death of
heirs bailor or bailee
in some 3rd person including the state while he is in
extinguishes the contract.
possession of the lease until he surrenders possession
Consensual contract Real contract as it is
to the lessor. perfected only upon
delivery of the object.
- Estoppel applies even if the lessor has no title at the Both contract consist in the transmission of the
time the relation of the lessor and lessee was enjoyment or use of a thing to another.
created—it is immaterial whether the lessor has a
valid title.
 However, the rule may be relaxed if there is an LEASE MUTUUM
unjust enrichment in favor of the lessor at the Owner of the property Lender or creditor loses
expense of the lessee—in effect the lessee does not lose his ownership over the thing
ownership loaned which becomes
would be paying rental twice for the same use
the property of the
of property for the same period.
borrower or debtor
Lease Sale Relationship is one of Creditor or oblige and
Only the enjoyment or Ownership is transferred lessor and lessee debtor or obligor
use is transferred Subject matter may be Only money or any other
Transfer is temporary Permanent unless subject real and or personal fungible thing
to a resolutory ondition Governed by the statute Not governed by the
The lessor need not to be Seller must be the owner of fraud where the lease statute of fraud
the owner or authorized by the is real property for more
owner to transfer than 1 year
ownership of the thing Not governed by Usury Governed by Usury law.
sold at the time it is law
deliverd
Price of the subject Price of the thing is
LEASE USUFRUCT
matter is not mentioned usually fixed in the
Gives a right to enjoy the
being immaterial contract
property of another with
In case of doubt, the intention of the parties is an
the obligation of
important factor in determining the contract entered
preserving its form and
into.
substance unless the title
constituting it or the law
CONDITIONAL SALES OF GOODS otherwise provides
Real right only in cases Always a real right
- Lease of personalty with option to buy is an of the lease of real
installment sale and not a lease. property where the lease
- Transaction are leases only in name the so is registered
called rent must necessarily be regarded as Lessor may or may not The creator of the right
payment of the price in installment since the be the owner must be the owner or one
due payment of the agreed amount, by terms of duly authorized by him
the bargain, in the transfer of title to the lessee. Lessor has an active Owner has the passive
obligation to maintain duty to allow the
LEASE COMMODATUM the lessee in the usufructuary to enjoy or
One of the parties Money or other enjoyment or use of the use the same
delivers to another either consumable thing upon property
something not the condition that the
consumable so that the same amount of the same
 Lessee generally pays no Usufructuary pays the Article 1644
taxes annual charged and taxes
on the fruits LEASE OF WORK OR SERVICE
Lessee has no obligation The usufructuary is - The object is the execution of a piece of work
to pay for repairs obliged to make the
for an employer by an independent contractor
ordinaru repairs needed
by the thing given in LEASE OF SERVICE
usufruct
Lessee cannot constitute Usufructuary may lease - It is the performance of some service or an
a usufruct only property the thing in usufruct to employer by a househelper or laborer or
another common carrier.
May be created only by May be created by law
contract (last will and testament In both kind of lease, the employer or passenger or
or prescription) owner of the goods binds himself to pay some
Covers particular uses Covers all possible uses remuneration or compensation in favor of the
limited by the contract of the property independent contractor, employee or common carrier in
relation of principal and agent does not exist between
the parties.
Lease Deposit
Constituted from the LEASE OF WORK AGENCY
moment a person OR SERVICE
receives a thing Basis of employment Representation
belonging to another Lessor performs a Agent executes a
with the obligation of material act for the juridical act for and in
safely keeping it on and benefit of his employer behalf of his principal.
of returning the same. without representation of
Enjoyment or use of the The safekeeping of the the latter
thing leased is the thing delivered is the Work or service must be Presumed for a
essential purpose principal purpose for a price or compensation
Lessor cannot demand The depositor can compensation
the thing leased before demand the return of the Will of both parties is Will of one is sufficient
the expiration of the subject matter at will. necessary for the
contract extinguishment of the
Both movable and If it is extrajudicial only relationship
immovable property may movable (corporeal) Only 2 persons is 3 persons are involved—
be the object things may be the object involved—lessor & principal, agent & 3rd
Onerous Gratuitous lessee person with whom the
Consensual Real contract perfected agent has contracted
only upon delivery of the In lease of work—the The risk is borne by the
object risk of loss before principal since the gent
delivery is borne by the acts merely as his
independent contractor representative
LEASE OF EMPLOYMENT especially in the lease of
CHATTEL work for a fixed price
Relationship is that of One of employer and In the lease of work—the Agent is not UNLESS he
lessor and lessee employee independent contractor is expressly binds himself
Lessor has no control or Employer exercises personally liable for his or exceeds the limits of
supervision over the control and supervision contracts with 3rd person his authority.
lessee over his employee In the lease of service— The agent exercises
Lessee pays rent to the The employer pays the lessor ordinarily discretionary powers.
lessor for the enjoyment wages or salaries for the performs only ministerial
or use of the chattel service of the employee. duty

Service as driver under the boundary system By contract of agency person binds himself to render
employer and employee not lessor and lessee. some service or to do something in representation or on
behalf of another with the consent or authority of the
latter.
Agency is a preparatory contract.
 Lease of work or Partnership 3. When no rate or amount is fixed in the contract
service although no exact amount may have been expressly
There is no principle of Every partner is an agent determined by the parties as the consideration for the
representation of partnership for the contract of hiring—the contract is nevertheless valid
purpose of its business. if the amount can be ascertained in the light of the
Lessor performs material The partner enters into customs and usages of the place or by findings of fact
act for the benefit of the commercial or business on the basis of evidence submitted in case of
employer transaction for the
disagreement.
realization of profits
Only 2 persons are A juridical personality
 A price certain exists when the same can be
involved separate and distinct
from that of each of the ascertained according to the customs and use of
partner is formed. the place.
Work or service is The partners perform
dependent upon the ends acts conducive to their  When no place has been fixed in acontract of
or purpose of the lessee. own business purposes hire or services—the court in case of
The work or service must The partners share in the disagreement shall determine a reasonable and
be for a price or profit or losses equitable compensation according to usages
compensation and customs of the place and the evidence in the
The will of both parties is The will of any partner is case with or without the testimony of experts.
necessary for the sufficient
extinguishment of the  With respect to the value of the services
relationship rendered on different occasions—the most
The independent Generally not important of which was the first—as it does not
contractor is personally
appear that any salary was fixed upon the court
liable for his contract
with 3rd persons to determine upon the evidence presented.
In lease of service—the Every partner has an Article 1645
lessor, ordinarily agent of the partnership
performs only ministerial exercises discretionary Lease of consumable goods
duties powers.
Fungibles things which are consumed by use cannot be
the subject matter of lease.
Compensation in lease of work or service
Consumable goods may be the object of lease when they
1. Where there is an agreement the lessee must be are merely to be exhibited or when they are accessory
compelled to pay the agreed price unless it is found to an industrial establishment
iniquitous or unreasonable
 Court may fix a reasonable and just The essence of a lease of things the enjoyment or use of
remuneration. the property with the obligation on the part of the lessee
 Where the compensation is renounced or to return the same upon the expiration of the lease.
waived after the service has been rendered— Ownership is not transferred to the lessee—things
there is a lease of service although it becomes which by their nature cannot be used without being
gratuitous. consumed cannot be the subject matter of lease.

2. Where the agreement may be implied. LEASE OF RURAL AND URBAN LANDS
 One who performs work or service in favor of
Article 1646
another who impliedly consents and who
benefits thereby is entitled to compensation by Rural Land relating to or constituting tenement in
virtue of an innominate contract or of case of land adopted and used for agricultural or pastoral
service tacitly contracted in which case the purposes.
courts will fix the reasonable worth of services
rendered. - principally used for the purpose of obtaining
products from the soil as opposed to urban
 No one should be enriched by the work of lands, which are principally for the purpose of
another unless the service are expressly stated residence
to be gratuitous. Persons disqualified to become lessees
 - persons disqualified to buy in accordance with therefore, an act of strict ownership; hence, a
Articles 1490 and 1491 are likewise special power of attorney is necessary.
disqualified to lease the thing therein
mentioned.  If the lease is not to be recorded, the lease
entered into by said persons is valid even
- Article 1490 refers to the relative incapacity of without a special power
husband and wife to sell property to each other.
special power of attorney is necessary “to lease any real
property to another person for more than one year.’’
- Article 1491, to the incapacity of the persons
enumerated therein who, by the special  This requirement is imposed whether or not the
relations they have with the property under their lease will be recorded.
charge or peculiar control, are prohibited from
purchasing said property.  In the absence of a special power, a lease for
than one (1) year executed by the persons
mentioned in Article 1647 is valid only for one
LEASE OF REAL PROPERTY BY ALIENS
(1) year but void as to the excess.
Foreigners are prohibited by the Constitution, except
only in cases of hereditary succession, to acquire lands
Article 1648
in the Philippines.
Effect of registration of lease of real estate
 Nevertheless, they can lease real or immovable
property in the Philippines. 1. As against third persons A lease contract is valid
and binding between the parties, their privies, and
The lessee has the same rights as the owner; but between
their heirs unless it be an oral lease for a longer
the one and the other, there exists an important,
period than one (1) year in which case it cannot be
substantial difference as regards ownership.
enforced by action for non-compliance with the
The lessor does not have the possession of the thing but statute of frauds
he preserves the title, the ownership.
o To affect or bind third persons, a lease of real
The lessee enjoys the use of the immovable, nothing, property should be registered in the Registry of
more; he does not exercise any proprietary right. Property.
a lessee does not obtain more than the possession or use
of the land the ownership is preserved in the lessor. o Unless so recorded, an innocent purchaser for
value is not bound to respect the existing lease
Since the residence of aliens in the Philippines is and he may terminate the same.
temporary, they may be granted temporary rights such
as a lease contract o A contract of lease of land must be in a public
the maximum period allowable for the duration of leases instrument so that it may be recorded.
of private lands to aliens or alien-owned entities not
qualified to acquire private lands under the Constitution o Article 1648 “is intended to protect the lessee,
is 25 years, renewable for another period of 25 years who cannot be ousted by the buyer if the lease
upon mutual agreement of both lessor and lessee. is recorded.

2. As between the parties Lease is a mere

personal right
Article 1647
If a lease is to be recorded in the Registry of Property, o where the instrument registered is invalid or
the persons mentioned in Article 1647 cannot constitute legally defective, registration will not render it
the same without proper authority to constitute the valid or cure its defect
same.
o Lease partakes of the nature of a real right when
Article 1647 does not specify the term of the lease. it is recorded on the title of the lessor
 Every lease of real estate may be recorded, and (regardless of duration)
if recorded, creates a real right binding upon
third persons. – the registration of the lease is,
 - only in the sense that it is binding even as What is contemplated by Article 1649 is a transfer
against third persons without actual notice of whereby the original lessee is released from his
the transaction. obligations under the contract
 there must be transfer of the contract itself, not
Leases of personal property Article 1648 only merely of the rights of the lessee.
applies to lease of real estate—leases of personal or
Where the assignee of the lessee did not assume the
movable property cannot be registered.
liabilities and obligations of the lessee under an express
 an assignment of a credit, right, or action shall stipulation that the assignment “does not carry with it
affect third persons if the assignment appear in any of the liabilities and obligations’’ of the lessee-
a public instrument. assignor

Effect of actual notice of unregistered lease by a  the assignee cannot be held liable for the rentals
purchaser unpaid by the lessee-assignor
a. the lessor’s consent is not required and
- As a rule, where the contract of lease entered b. he has no right of action against the assignee
into by the lessee with the former owner was
not recorded, said contract cannot bind a
purchaser of the property.
Article 1650
Where a purchaser of land at the time of the purchase
Sublease by lessee of things leased
has full knowledge of the fact that the land has been
leased to a third person and is informed of the terms of o a lessee may sublease the property in the
such lease absence of express prohibition.
 he is bound to respect said lease, although it is
o A violation of the prohibition entitles the lessor
not entered upon the certificate of title. The
to rescission of the contract and indemnification
lease, in effect, became a part of the contract of
for damages or only the latter allowing the
sale
contract to remain in force.
Article 1649
o The contract of lease must expressly stipulate
Assignment of lease by lessee the prohibition on subletting.
In an assignment of lease, the personality of the lessee
(assignor/debtor) disappears. o In sublease, the lessee remains a party to the
contract.
The lessee makes an absolute transfer of his lease,
involving not only his rights but also obligations as such There are two leases and two distinct juridical relations:
lessee—dissociates himself from the original contract of 1. between the lessor and the lessee, and
lease 2. between the sublessor (lessee) and the
o There arises the new juridical relation between sublessee, although intimately related to each
the lessor and the assignee who is converted other.
into a new lessee. The sublessee generally does not have any direct action
against the lessor to require compliance with his or
o There is, in effect, a novation by substituting the lessee’s obligations, or vice versa—the sublessor is the
person of the debtor and novation cannot take one directly liable to the sublessee whose damages are
place without the consent of the creditor. included in whatever damages the former may recover
Hence, the lessee cannot assign the lease from the lessor
without the consent of the lessor (creditor),
unless there is a stipulation granting him that In case of judgment of eviction against the lessee affects
right. the sublessee even if the latter is not sued in the
ejectment case.
o The objective of the prohibition is to protect the
 because the sublessee can invoke no right
lessor or owner of the leased properly.
superior to that of the sublessor from which his
own right is derived, and the moment the
o An assignment of lease without the consent of
sublessor is duly ousted from the premises, the
the lessor is a ground for rescission of the lease.
sublessee has no leg to stand on.
Article 1651 - Under the second paragraph of Article 1652
payments of rent in advance by the sublessee shall
Direct liability of sublessor to lessor
be deemed not to have been made, so far as the
- The sublessee is not a party to the contract lessor’s claim is concerned, unless said payments
between the lessor and the lessee; hence, under were effected in virtue of the custom of the place.
the general rule in contracts—the sublessee can
only be held liable directly to the sublessor. - The sublessee continues to be subsidiarily liable to
Article 1651 provides an exception to the rule. the lessor for any rent unpaid by the lessee

- The lessor may bring an action directly against  The rule is a precaution to avoid collusion
the sublessee if he does not use and preserve the between the lessee and lessee.
thing leased in accordance with the agreement
Article 1653
between the lessor and the lessee or with the
nature of the property Warranty of the lessor
- Applies to lease the warranties in sales.
Article 1652
- In case of eviction of the lessee, and the return of the
Subsidiary liability of sublessee to lessor
rents paid is required
1. Remedy to collect rents from the sublessee  a reduction shall be made taking into account
- sublessee has assumed no direct obligation to the period during, which the lessee enjoyed the
answer for the rents due from the lessee to the thing.
lessor, the law grants the lessor the right to demand
payment from the sublessee the rents which the - The lessee has also the right to ask for the
sublessor failed to pay the lessor proportionate reduction of the rents agreed upon
where the area or number of the object of the lease is
- to prevent a situation where the lessee collects rents less than that stated in the contract.
from the sublessee but does not pay his rents to the
Lessor’s warranty distinct from his liability for
lessor.
damages
- does not annul the contractual relations between Warranty is the obligation to repair or correct any
the lessee and sublessee but simply helps the owner fault or defect existing when the lessee took over the
of the property to collect the rentals on the same property leased, but when the law declares that the
lessor must warrant the thing leased
 The demand to pay rents made by the lessor on
 it is not to be understood that he must also
the sublessee does not exempt the latter from
indemnify the lessee.
his obligation to pay the sublessor the rents
which said sublessee failed to pay the lessor.
 Liability for the warranty is not equivalent to
liability in damages, as the latter is an
2. Amount of rent recoverable
obligation distinct from the former.
- The liability of the sublessee is limited to the
amount of rent due from him to the sublessor under RIGHTS AND OBLIGATIONS OF THE LESSOR
the terms of the sublease at the time of the AND LESSEE
extrajudicial demand by the lessor.
Article 1654
- Future rents cannot be recovered Obligation of the lessor
- Liability of the sublessee is subsidiary, he is liable
to the lessor only for rents the lessee failed to pay (1) To deliver the thing which is the object of the
the lessor. contract in such a conditions as to render it fit for the
use intended;
3. Liability for rents paid in advance
(2) To make on the same during the lease all the
- impose upon the sublessee certain obligations which
necessary repairs in order to keep it suitable for the use
imply the grant of a direct action in favor of the
to which it has been devoted, unless there is a stipulation
lessor against the former.
to the contrary;
(3) To maintain the lessee in the peaceful and adequate REPAIR putting back of something in the condition
enjoyment of the lease for the entire duration of the in which it was originally, while an “improvement’’ is
contract. the adding of something new—The filling of a vacant
lot is not a repair nor the construction of a house.
Delivery of the property- The thing leased must be
delivered in order that the lessee may enjoy or use the Ex. When the lessor agrees to keep a building under
same. Delivery, may, of course, be actual or lease in a proper condition but fails to do so, and the
constructive. lessee vacates the building before the expiration of the
lease, the lessor cannot recover damages nor rent for the
- At the time of delivery, the thing must be in a
unexpired term
condition fit for the use intended.
- while the lessor is not liable for damages due to
- The contract, however, may validly provide that the
a fortuitous event or force majeure, he must
thing, when delivered, shall be in the same condition
make the repairs after he has been advised by
in which it might be at the time of the perfection of
the lessee of the necessity thereof within the
the contract.
shortest time possible.
- The parties may stipulate regarding the fitness of
Keeping lessee in peaceful and adequate enjoyment
the thing and the particular use to which it will be
devoted by the lessee. - the lessor must answer for legal trespass
Ex. When a lessee rents a building which turns out,
- The lessor who fails in the performance of his
however, to be occupied by another person, and the
obligations shall be subject to indemnity for the
former cannot obtain possession, his (the lessee’s) cause
losses and damages caused thereby. The true
of action is against the lessor for breach of contract in
measure of damages for the breach of such a
that the latter violated the obligation of delivering to
contract is what the plaintiff has lost by the
him the peaceful possession of the leased premises. The
breach.
lessee has no cause of action against the possessor
because he has no relation, contractual or ex delicto,
- The warranty of the lessor is that the lessee shall
with the latter
not be disturbed in his legal, not physical
A lessee who fails to take possession of the leased possession.
premises on account of the presence of third persons
unwilling to vacate the premises because of some  Hence, the lessor is not liable for physical
previous act or transaction of the lessor, should institute trespass, but is liable when his non-
the action against the lessor based upon the latter’s payment of the real estate tax results in
failure to comply his obligation to deliver the same. the eviction of the lessee

In a case where the agreement of the parties is for the

Making of necessary repairs- to keep the thing leased lease of an entire area and “the term of the lease shall be
suitable for the use to which it has been devoted unless considered as extended for a period equal to that during
there is a stipulation to the contrary. which the lessee was not in possession of the leased
- In default of a special stipulation, the custom of the premises
place shall be observed as to the kind of repairs.  the failure of the lessee to use a portion of the
leased premises was held equivalent to a
- If the lessor fails in the performance of this duty dispossession from the entire area in question,
a. he lessee may suspend the payment of rent for there was incomplete performance by the
(Art. 1658.) or lessor of its principal prestation, thereby calling
b. avail himself of the other remedies provided for the application of the contractual provision
in the law. on extension of term.

- The lessor is not liable for repairs for damages or Article 1655
deterioration caused by the lessee himself.
Effect of destruction of the thing leased by fortuitous
event
- (a) The lessee may agree to do the repairs and
relieve the lessor of the duty, as where the lessee is Destruction total- the lease is extinguished, because of
to pay only a very moderate if not nominal, rent the absence of the object of the contract.
Destruction partial- the lessee is given the option to - The court cannot determine the rent and compel the
choose between a proportionate reduction of the rent lessor to conform thereto and allow the lessee to
and rescission of the lease. enjoy the premises on the basis of the rents fixed
by it.
 Once the choice of the lessee has been
- The lessor has not only the right to terminate the
communicated to the lessor, the former cannot
lease upon the expiration of the term but also to
change it.
increase the rent in case of renewal
 If reduction of rent is chosen, the same shall be
- The lessee has to option to accept the new rate or
retroactive to the date the partial destruction
vacate the premises; otherwise, he will be
occurred
considered a possessor in bad faith of the property
In case of rescission
The fact that the vendor-lessee has a right to repurchase
general rule it will not be granted for slight or the lots sold by him under a pacto de retro sale and
trivial causes. leased to him by the vendee, is no excuse for failure to
pay rentals. The sale and the lease are independent of
The partial destruction should be important or each other.
substantial as to defeat the purpose of the lessee in
entering into the contract of lease. The disagreement between a lessor and a lessee as to the
amount of rent to be paid cannot be decided in an action
of consignation.
Article 1656 B. Proper use of the thing leased— The lessee must
Right of lessor to continue same business or exercise the diligence of a good father of a family.
industry engaged in by lessee.
- He must devote the thing to the use stipulated
- permits the lessor of a business or industrial - if none was stipulated, to that which may be
establishment to continue engaging in the same inferred from the nature of the thing leased
business or industry to which the lessee has according to the custom of the place.
devoted the thing leased.
C. Payment of expenses for deed of lease- In lease, the
A lease is no warranty by the lessor to the lessee
law imposes the obligation to pay expenses for the
that the latter’s business would be successful.
deed of lease on the lessee. By agreement, the
Even if the lessee should suffer losses, he would
obligation may be assumed by the lessor.
still be bound to fulfill the terms of the lease.
In sale, the expenses for the execution and registration
- Neither does a lease create a right in favor of
of the deed of sale shall be borne by the vendor, unless
the lessee to be free from competition offered
there is a stipulation to the contrary
by the lessor or other persons

Article 1657
Obligations of the lessee
(1) To pay the price of the lease according to the terms
stipulated;
(2) To use the thing leased 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;
(3) To pay the expenses for the deed of lease.
A. Payment of agreed price of lease— The obligation of
the lessee to pay the rent agreed upon arises only
when the thing leased has been delivered to the
lessee for the purposes stipulated in the contract.

- Only the lessor has the right to fix the rents