Do You Stay in an Apartment: FYI Read This!

The number of families living in an apartment increases drastically today. In almost every corner, you will find signage of Apartment for Rent, House for Lease, or Borders Accepted. Hence, I found it very significant to explicate on laws governing Lease.

The discussion below will be focused on the following relevant questions:
1. Is it MANDATORY for a contract of rent or lease be recorded in the Registry of Property?
2. Who should make the repair in the house rented or leased, the lessor(the owner of the property) or the lessee( the person leasing the property)?
3. Is it legal for the lessee to admit borders or to sublease the apartment he is occupying?

Before proceeding, I would like to make it clear that the following discussion will be based on the premise that there has been no agreement between the parties as to who will pay the repair, or will borders be admitted by the lessee or not. Bear in mind that if there has been an agreement, it must be respected by both parties and general laws will not apply, provided still that the agreement is not contrary to law, public policy, or good morals.

As to the first point, it is not mandatory for a contract of lease or rent be recorded in the Registry of Property. The law does not strictly require the rent or lease to be registered. A mere verbal agreement between parties is enough to make a contract binding between them. It is nevertheless significant to have a registered agreement between parties, especially when the lease exceeds one year, to make the contract binding to third person. “Every lease of real estate may be recorded in the Registry of Property. Unless a lease is recorded, it shall not be binding upon third persons (CC Art. 1648).” It means that although the verbal contract of lease is valid between parties, it will not bind other people, who are not parties or did not take part in the contract, when the contract is not registered. Thus, if a third person purchased a land leased to a certain person, whose lease is not registered, the purchaser is not bound to respect the lease. He even has the right to eject the lessee from the apartment.

As to the second point, when there has been no agreement between parties as to who will shoulder the expenses for the repair in the apartment, the lessor or the owner of the house has the obligation for the necessary repairs and to make the apartment suitable for living. This will include repair of roof, doorknobs, pozo negro and many more that is broken by the ordinary wear and tear. “The lessor is obliged…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 there has been a stipulation to the contrary (CC 1654).” In this case, the lessor is obliged to make the necessary repair to preserve the apartment and to keep it suitable for dwelling. The lessee nevertheless may make the necessary repairs on the property and reimburse it later to the lessor.

As to the last point, accepting borders in an apartment is allowed because no ownership or administration is transferred to the border. The lessee does not sublease portions of the apartment to the borders but only agreed to provide them with meals and/or lodging for a price (Mallarte v CA, 178 SCRA 310). The lessee may even sublease the apartment he is renting, in whole or in part, to another provided that there has been no express prohibition in the contract of lease. The lessee does not need to ask permission or consent from the owner of the house, when he wants the property to be subleased by another. The agreement that the law prohibits, without the consent of the lessor, is Assignment of Lease. “The lessee cannot assign the lease without the consent of the lessor, unless there has been a stipulation to the contrary (CC 1649).” An assignment exists when the lessee made an absolute transfer of his leasehold rights in a contract, and he has disassociated himself from the original contract of lease.