Lease

What is lease?

Lease is a consensual, bilateral, onerous and commutative contract by virtue of which one person binds himself to grant temporarily the use of the thing or to render some service to another who undertakes to pay some rent.

Art. 1842. The right to an account of his interest shall accrue to any partner, or his legal representative as against the winding up partners or the surviving partners or the person or partnership continuing the business, at the date of dissolution, in the absence of any agreement to the contrary. (n)

What are the properties which may be leased?

1. Lease of Public Domain which must be those alienable lands (agricultural lands) of 1,000 hectares maybe leased by private corporation for 25 years and 12 hectares by Filipino citizens

2. Private Lands and/or improvements thereof.

What is the recording of lease of personal property?

As a general rule, the lease of real property is personal right. However if the lease partakes of the nature of real right if the lease real property is more than one (1) year or is registered regardless of duration.

Who are the persons disqualified to be lessees?

A husband and a wife cannot lease to each other their separate properties except if separation of property was agreed upon or if there has been judicial separation of property.
This is to prevent prejudice to creditors and to prevent the stronger spouse from influencing unduly the weaker spouse. Also, those mentioned in this article of the New Civil Code are disqualified:

Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another:
(1) The guardian, the property of the person or persons who may be under his guardianship;

(2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given;

(3) Executors and administrators, the property of the estate under administration;

(4) Public officers and employees, the property of the State or of any subdivision thereof, or of any government-owned or controlled corporation, or institution, the administration of which has been entrusted to them; this provision shall apply to judges and government experts who, in any manner 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. (1459a)

*Persons referred to in Article 1491 of the New Civil Code are disqualified because of fiduciary relationships

References:

The New Civil Code

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