Art. 1642. The contract of lease may be of things, or of work and service.

LEASE-is a consensual, bilateral, onerous, and commutative contract by which one person binds himself to grant temporarily the use of a thing or the rendering of some service to another who undertakes to pay some rent, compensation, or price. KINDS OF LEASE: 1. Things 2. Service 3. Work (piece of work) Art. 1643. In the lease of things, one of the parties binds himself to give to another the enjoyment or use of a thing for a price certain, and for a period which may be definite or indefinite. However, no lease for more than ninety-nine years shall be valid. LEASE OF A THING- is a consensual, bilateral, onerous, and commutative contract by which a person temporarily grants the use or enjoyment of certain property to another who undertakes to pay rent or a price certain therefor, said contract last for a period which is either definite or indefinite. CHARACTERISTICS/REQUISITES FOR LEASE OF THINGS: a. consensual b. principal contract c. nominate d. purpose is to allow enjoyment or use of a thing e. subject is within the commerce of man f. should not be subject to immoral e. onerous h. temporary i. definite or indefinite RENT- compensation either in money, provisions, chattels, or labor, received by the lessor from the lessee. LEASE SALES a. only use or enjoyment is transferred a. ownership is transferred b. transfer is temporary b. transfer is permanent c. lessor need not be the owner c. seller must be the owner at the time the property is d. the price of the object, distinguished from the rent, supposed to be delivered is usually not mentioned. d.usually, the selling price is mentioned LEASE a. lessor does not lose ownership. b. relationship is one of lessor and lessee c. not governed by the Usury Law. d. if what is leased is real property for more than 1 year, the statute of frauds must be complied with e. refers to real and personal property LEASE a.onerous contract (although the rent may later on be remitted) b.not essentially personal in character, hence right may be transmitted to heirs. c.consensual contract BASIS 1. As to EXTENT 2. As to NATURE of the right SIMPLE LOAN a. lender loses ownership b. relationship is one obligor and oblige c. governed by the Usury Law d. not governed by the Statute of Fraud e. refers only to personal property.

COMMODATUM a. this is essentially gratuitous; if there is a price or rent, the contract ceases to be a commodatum b. personal in character, thus death of either bailor or bailee ends the commodatum. c. real contract requires delivery for perfection. LEASE 1. Generally covers and uses as a rule only a particular or specific use. 2. Is a real right only if, as in the case of a lease over REAL PROPERTY, the lease is REGISTERED, or is for MORE THAN ONE YEAR, otherwise, it is only a personal right. 3. The lessor may or may not be the owner (as when there is a sublease) 4. May be created as a rule only by contract; and by way of exception by law. 5. The owner or lessor is more or less ACTIVE, and he MAKES THE lessee enjoy hace gozar-

USUFRUCT 1. Covers all fruits and uses a rule. 2. Is always a real right.

3. as to the CREATOR of the right 4. As to ORIGIN

5. As to CAUSE

6. As to REPAIRS 7. As to TAXES 8. As to other things

3. Can be created only by the owner, or by duly authorized agent, acting in behalf of the owner. 4. May be created by law, contract, last will or prescription. 5. The owner is more or less PASSIVE and he ALLOWS the usufructuary to enjoy the thing given in usufruct dejagozar6. The usufructuary has the duty to make the ordinary repairs. 7. The usufructuary pays for the annual charges and taxes on the fruits. 8. A usufructuary may lease the property itself to another.

6. The lessee generally has no duty to pay for repairs. 7. The lessee generally has no duty to pay for repairs. 8. The lessee cannot constitute a usufruct on the property leased.

Art. 1644. In the lease of work or service, one of the parties binds himself to execute a piece of work or to render to the other some service for a price certain, but the relation of principal and agent does not exist between them. LEASE OF SERVICES (location operatum) CONTRACT FOR A PIECE OF WORK (location operis) a. the important object here is the labor performed for a. the important object here s the work done (the the lessor. result of the labor) b. the result is generally not important, hence, the b. the result is generally important. Generally the price labourer is entitled to be paid even if there is is not payable until the work is completed, and said destruction of the work thru a fortuitous event. price cannot generally be lawfully demanded if the work is destroyed before it is finished and accepted. Art. 1645. Consumable goods cannot be the subject matter of a contract of lease, except when they are merely to be exhibited or when they are accessory to an industrial establishment. EXCEPTIONS: a. if they are merely to be exhibited as for display purposes b. if they are accessory to an industrial establishment RURAL LANDS are those where the lessee principally is interested in soil products. URBAN LANDS leased principally for purposes of residence FORM FOR THE CONTRACT OF LEASE OF THINGS Lease may be made ORALLY, but if the lease of real property is for more than 1 year, it must be in WRITING under the Statute of Fraud. Art. 1646. The persons disqualified to buy referred to in Articles 1490 and 1491, are also disqualified to become lessees of the things mentioned therein. PERSONS DISQUALIFIED TO BE LESSEES BECAUSE DISQUALIFIED TO BUY: a. Husband and a wife cannot lease to each other their separate properties except: 1. if a separation of property was agreed upon in the marriage settlement. 2. if there has been a judicial separation under Art. 135 of the FC. b. Persons referred to under Art.1491 are disqualified because of fiduciary relationships. Art. 1647. If a lease is to be recorded in the Registry of Property, the following persons cannot constitute the same without proper authority: the husband with respect to the wife's paraphernal real estate, the father or guardian as to the property of the minor or ward, and the manager without special power. PURPOSE IN RECORDING A LEASE: Notifying strangers to the transactions. PROPER AUTHORITY REQUIRED: a. the husband (with respect to the paraphernal real estate of the wife). b. the father or guardian (with respect to the property of the minor or the ward). c. the manager (administrator)(with respect to the property under his administration) Art. 1648. 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. EFFECTS IF THE LEASE FO REAL PROPERTY IS NOT REGISTERED a. the lease is not binding on innocent third persons such as a purchaser. b. naturally, such an innocent third person is allowed to terminate the lease in case he buys the property from the owner-lessor. c. when a third person already knows of the existence and duration of the lease, he is bound by such lease even if it has not been recorded. d. if the stranger knows of the existence of the lease, but has been led to believe that the lease would expire very soon, or before the new lease in favour of him begins, the stranger can still be considered innocent. Art. 1649. The lessee cannot assign the lease without the consent of the lessor, unless there is a stipulation to the contrary. Art. 1650. 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. SUBLEASE ASSIGNMENT a. the lessee retains an interests in the lease; he a. the lessee makes an absolute transfer of his retains an interest in the lease; he remains a party to interest as lessee; thus, he dissociates himself from the contract. the original contract of lease. b. the sublessee does not have any direct action b. the assignee has a direct action against the lessor. against the lessor. c. cannot be done unless the lessor consents c. can be done even without the permission of the lessor (unless there be an express prohibition) Art. 1651. Without prejudice to his obligation toward the sublessor, the sublessee 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 the lessee. Art. 1652. The sublessee is subsidiarily liable to the lessor for any rent due from the lessee. However, the sublessee shall not be responsible beyond the amount of rent due from him, in accordance with the terms of the sublease, at the time of the extrajudicial demand by the lessor. Payments of rent in advance by the sublessee shall be deemed not to have been made, so far as the lessor's claim is concerned, unless said payments were effected in virtue of the custom of the place. Art. 1653. The provisions governing warranty, contained in the Title on Sales, shall be applicable to the contract of lease. In the cases where the return of the price is required, reduction shall be made in proportion to the time during which the lessee enjoyed the thing. LESSOR WARRANTIES AGAINST: a. eviction b. hidden defects RIGHTS AND OBLIGATIONS OF THE LESSOR AND THE LESSEE Art. 1654. The lessor is obliged: (1) To deliver the thing which is the object of the contract in such a condition as to render it fit for the use intended; (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 there is a stipulation to the contrary; (3) To maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract. REPAIRS refers only to restoration caused by partial destruction, impairment, or deterioration due to wear and tear or fortuitous events.

Art. 1655. If the thing leased is totally destroyed by a fortuitous event, the lease is extinguished. If the destruction is partial, the lessee may choose between a proportional reduction of the rent and a rescission of the lease. Art. 1656. The lessor of a business or industrial establishment may continue engaging in the same business or industry to which the lessee devotes the thing leased, unless there is a stipulation to the contrary. Art. 1657. The lessee is obliged: (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 expenses for the deed of lease. Art. 1658. The lessee may suspend the payment of the rent in case the lessor fails to make the necessary repairs or to maintain the lessee in peaceful and adequate enjoyment of the property leased. Art. 1659. If the lessor or the lessee should not comply with the obligations set forth in Articles 1654 and 1657, the aggrieved party may ask for the rescission of the contract and indemnification for damages, or only the latter, allowing the contract to remain in force. Art. 1660. If a dwelling place or any other building intended for human habitation is in such a condition that its use brings imminent and serious danger to life or health, the lessee may terminate the lease at once by notifying the lessor, even if at the time the contract was perfected the former knew of the dangerous condition or waived the right to rescind the lease on account of this condition. Art. 1661. The lessor cannot alter the form of the thing leased in such a way as to impair the use to which the thing is devoted under the terms of the lease. Art. 1662. If during the lease it should become necessary to make some urgent repairs upon the thing leased, which cannot be deferred until the termination of the lease, the lessee is obliged to tolerate the work, although it may be very annoying to him, and although during the same, he may be deprived of a part of the premises. If the repairs last more than forty days the rent shall be reduced in proportion to the time - including the first forty days - and the part of the property of which the lessee has been deprived. When the work is of such a nature that the portion which the lessee and his family need for their dwelling becomes uninhabitable, he may rescind the contract if the main purpose of the lease is to provide a dwelling place for the lessee. Art. 1663. The lessee is obliged to bring to the knowledge of the proprietor, within the shortest possible time, every usurpation or untoward act which any third person may have committed or may be openly preparing to carry out upon the thing leased. EFFECT IF LESSEE FAILS TO COMPLY The lessee would be responsible for damages which the lessor would suffer, and which could have been avoided by lessees diligence. EFFECTS IF LESSOR FAILS TO MAKE URGENT REPAIRS 1. Lessee, in order to avoid imminent danger, may order the repairs at the lessors cost. 2. Lessee may sue for damages. 3. Lessee may suspend the payment of the rent. 4. Lessee may ask for recission, in case of substantial damage to him. He is also obliged to advise the owner, with the same urgency, of the need of all repairs included in No. 2 of Article 1654.In both cases the lessee shall be liable for the damages which, through his negligence, may be suffered by the proprietor. If the lessor fails to make urgent repairs, the lessee, in order to avoid an imminent danger, may order the repairs at the lessor's cost. TWO KINDS OF TRESPASS WITH RESPECT TO THE PROPERTY LEASED 1. Mere act of trespass (disturbance in fact perturbacion de mere hecho 2. Trespass in law (disturbance in law, perturbacion de derecho Art. 1664. The lessor is not obliged to answer for a mere act of trespass which a third person may cause on the use of the thing leased; but the lessee shall have a direct action against the intruder. There is a mere act of trespass when the third person claims no right whatever. Art. 1665. The lessee shall return the thing leased, upon the termination of the lease, as he received it, save what has been lost or impaired by the lapse of time, or by ordinary wear and tear, or from an inevitable cause. Art. 1666. In the absence of a statement concerning the condition of the thing at the time the lease was constituted, the law presumes that the lessee received it in good condition, unless there is proof to the contrary. Art. 1667. The lessee is responsible for the deterioration or loss of the thing leased, unless he proves that it took place without his fault. This burden of proof on the lessee does not apply when the destruction is due to earthquake, flood, storm or other natural calamity. Art. 1668. The lessee is liable for any deterioration caused by members of his household and by guests and visitors. Art. 1669. If the lease was made for a determinate time, it ceases upon the day fixed, without the need of a demand. Art. 1670. If at the end of the contract the lessee should continue enjoying the thing leased for fifteen 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 Articles 1682 and 1687. The other terms of the original contract shall be revived. IMPLIED NEW LEASE (TACITA RECONDUCCION) -which arises if at the end of the contract, the lessee should continue enjoying the thing leased for 15 DAYS with the acquiescence of the lessor unless of course a notice to the contrary had previously been given by EITHER PARTY. Art. 1671. 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. Art. 1672. In case of an implied new lease, the obligations contracted by a third person for the security of the principal contract shall cease with respect to the new lease. Art. 1673. The lessor may judicially eject the lessee for any of the following causes: (1) When the period agreed upon, or that which is fixed for the duration of leases under Articles 1682 and 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; or if he does not observe the requirement in No. 2 of Article 1657, as regards the use thereof. The ejectment of tenants of agricultural lands is governed by special laws. Art. 1674. In ejectment cases where an appeal is taken the remedy granted in Article 539, second paragraph, shall also apply, if the higher court is satisfied that the lessee's appeal is frivolous or dilatory, or that the lessor's appeal is prima facie meritorious. The period of ten days referred to in said article shall be counted from the time the appeal is perfected. Art. 1675. Except in cases stated in Article 1673, the lessee shall have a right to make use of the periods established in Articles 1682 and 1687. Art. 1676. The purchaser of a piece of land which is under a lease that is not recorded in the Registry of Property may terminate the lease, save when there is a stipulation to the contrary in the contract of sale, or when the purchaser knows of the existence of the lease. If the buyer makes use of this right, the lessee may demand that he be allowed to gather the fruits of the harvest which corresponds to the current agricultural year and that the vendor indemnify him for damages suffered. If the sale is fictitious, for the purpose of extinguishing the lease, the supposed vendee cannot make use of the right granted in the first paragraph of this article. The sale is presumed to be fictitious if at the time the supposed vendee demands the termination of the lease, the sale is not recorded in the Registry of Property. (1571a) Art. 1677. The purchaser in a sale with the right of redemption cannot make use of the power to eject the lessee until the end of the period for the redemption. (WHEN BUYER A RETRO CAN EJECT) Art. 1678. If the lessee makes, in good faith, useful improvements which are suitable to the use for which the lease is intended, without altering the form or substance of the property leased, the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time. Should the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby. He shall not, however, cause any more impairment upon the property leased than is necessary. With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remove the ornamental objects, provided no damage is caused to the principal thing, and the lessor does not choose to retain them by paying their value at the time the lease is extinguished. Art. 1679. If nothing has been stipulated concerning the place and the time for the payment of the lease, the provisions or Article 1251 shall be observed as regards the place; and with respect to the time, the custom of the place shall be followed. Special Provisions for Leases of Rural Lands Art. 1680. The lessee shall have no right to a reduction of the rent on account of the sterility of the land leased, or by reason of the loss of fruits due to ordinary fortuitous events; but he shall have such right in case of the loss of more than one-half of the fruits through extraordinary and unforeseen fortuitous events, save always when there is a specific stipulation to the contrary. Extraordinary fortuitous events are understood to be: fire, war, pestilence, unusual flood, locusts, earthquake, or others which are uncommon, and which the contracting parties could not have reasonably foreseen. Art. 1681. Neither does the lessee have any right to a reduction of the rent if the fruits are lost after they have been separated from their stalk, root or trunk. Art. 1682. The lease of a piece of rural land, when its duration has not been fixed, is understood to have been for all the time necessary for the gathering of the fruits which the whole estate leased may yield in one year, or which it may yield once, although two or more years have to elapse for the purpose. Art. 1683. The outgoing lessee shall allow the incoming lessee or the lessor the use of the premises and other means necessary for the preparatory labor for the following year; and, reciprocally, the incoming lessee or the lessor is under obligation to permit the outgoing lessee to do whatever may be necessary for the gathering or harvesting and utilization of the fruits, all in accordance with the custom of the place. Art. 1684. Land tenancy on shares shall be governed by special laws, the stipulations of the parties, the provisions on partnership and by the customs of the place. TENANT is a person who, himself, and with the aid available from within his immediate farm household, cultivates the land belonging to, or possessed by another, with the latters consent for the purpose of production, sharing the produce with the landholder under the share tenancy system, or paying to the landlord a price certain or ascertainable in produce, or in money or both, under the leasehold tenancy system. Art. 1685. The tenant on shares cannot be ejected except in cases specified by law. Special Provisions of the Lease of Urban Lands Art. 1686. In default of a special stipulation, the custom of the place shall be observed with regard to the kind of repairs on urban property for which the lessor shall be liable. In case of doubt it is understood that the repairs are chargeable against him. Art. 1687. If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month. Art. 1688. When the lessor of a house, or part thereof, used as a dwelling for a family, or when the lessor of a store, or industrial establishment, also leases the furniture, the lease of the latter shall be deemed to be for the duration of the lease of the premises.