C. Rights and obligations of the lessee

1. RIGHTS OF THE LESSEE

Rights of the lessee:
1) To suspend rent payments;
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. (Article 1658, Ibid.)
2) To rescission and indemnification for damages;
If the lessor or the lessee should not comply with the obligations set forth in Articles 1654 [lessor’s obligations] and 1657 [lessee’s obligations], 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. (Article 1659, Ibid.)
3) To terminate lease of dwelling if it brings imminent and serious danger to life/health;
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. (Article 1660, Ibid.)
4) To terminate lease of dwelling if urgent repairs render it uninhabitable;
When the work [for urgent repairs] 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. (Paragraph 3, Article 1662, Ibid.)
5) To be protected against impairment;
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. (Article 1661, Ibid.)
6) To order urgent repairs at lessor’s cost;
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. (Paragraph 4, Article 1663, Ibid.)
7) To have a direct action against intruder;
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.(Article 1664, Ibid.)
There is a mere act of trespass when the third person claims no right whatever. (Paragraph 2, Article 1664, Ibid.)
8) To an implied new lease;
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. (Article 1670, Ibid.)
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. (Article 1671, Ibid.)
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. (Article 1672, Ibid.)
9) To reimbursement for ½ value of improvements;
10) To remove of improvements if lessor refuses reimbursement;
11) To remove ornamental expenses;
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.(Article 1678, Ibid.)
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. (Paragraph 2, Article 1678, Ibid.)
12) To make use of the periods established in Articles 1682 and 1687.
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. (Article 1675, Ibid.)

⦁⦁⦁⦁⦁

BAR EXAM QUESTION

(Question B.19, Civil Law, 2019 Bar Exam)

Mr. A entered into a lease contract covering one of his commercial buildings with XYZ Company, a partnership composed of X, Y, and Z, as lessee, for use as an office space. Upon failure to receive the rental payments when they fell due, Mr. A immediately sought payment of the same from X, Y, and Z, asserting that the individual partners are solidarily liable together with the partnership for its debts.

X, Y, and Z disagreed with Mr. A’s contention, arguing further that in any event, rentals should not be paid up until Mr. A makes the necessary arrangements for the repair of the defective electrical wirings in the office that caused power outages and hence, made it difficult, if not impossible, for them to conduct their usual business operations.

Rule on the parties’ respective arguments. (5%)

SUGGESTED ANSWER:

1) On the claims of Mr. A:

They are incorrect. Answer

Under the Civil Code, a partnership has a separate juridical personality from the partners. It is the partnership that is primarily answer for its liabilities. If the assets of the partnership are insufficient, it is only when the general partners may be held liable. Rule

In the case at bar, there is no showing that the assets of the partnership are insufficient to cover the liabilities for rental payment. The partners cannot be made liable until this requirement is complied. Apply

Thus, the claims of Mr. A is incorrect. Conclusion

2) On the claims of X, Y, and Z: 

They are correct. Answer

Under the Civil Code, 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. Rule

In the case at bar, the defective electrical wiring in the office that caused power outages fall under necessary repairs. This is made evident by the fact that it has become impossible for the partners to conduct their usual business operations.  They can suspend payment until necessary repairs are made by the lessor. Apply

Thus, the claims of X, Y, and Z are correct. Conclusion

⦁⦁⦁⦁⦁

2. OBLIGATIONS OF THE LESSEE

Obligations of the lessee:
1) To pay stipulated price of lease;
To pay the price of the lease according to the terms stipulated (Article 1657[1], Ibid.)
2) To use the thing leased as a diligent of a good father of a family;
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 (Article 1657[2], Ibid.)
3) To pay for expenses for deed of lease;
To pay expenses for the deed of lease (Article 1657[3], Ibid.)
4) To tolerate urgent repairs;
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.(Article 1662, Ibid.)
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.(Paragraph 2, Article 1662, Ibid.)
5) To inform proprietor of every usurpation or untoward act;
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. (Article 1663, Ibid.)
… the lessee shall be liable for the damages which, through his negligence, may be suffered by the proprietor. (Paragraph 3, Article 1663, Ibid.)
6) To advise owner of the need of all repairs, including necessary repairs;
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. (Paragraph 2, Article 1663, Ibid.)q
… the lessee shall be liable for the damages which, through his negligence, may be suffered by the proprietor. (Paragraph 3, Article 1663, Ibid.)q
7) To return the thing leased;
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. (Article 1665, Ibid.)
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. (Article 1666, Ibid.)
If the lease was made for a determinate time, it ceases upon the day fixed, without the need of a demand.(Article 1669, Ibid.)
8) To be responsible for deterioration or loss – with exceptions;
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.(Article 1667, Ibid.)
The lessee is liable for any deterioration caused by members of his household and by guests and visitors.(Article 1668, Ibid.)

Disclaimer: All information herein is for educational and general information only intended for those preparing for the bar exam. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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