Published 26 July 2019, The Daily Tribune

I have previously discussed the rights of a lessee in relation to leased property that has been sold to a third party while the lease is subsisting. Since then, there appears to be a significant interest on the issue of lease among our readers, the same being common if not indispensable in most  commercial and even private, residential transactions. Hence, I have devoted another article on the topic of lease, this time focusing on the surrender of leased premises and the rights of the lessor in recovering the same.

In a contract of lease, the lessor binds himself to give the enjoyment or use of a thing to the lessee for a price certain, and for a period which may be definite or indefinite. Under the Civil Code, the lessor is obliged to deliver the thing in such condition as to render it fit for the use intended. Upon termination of the lease, the lessee shall return the thing just 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.

In case of a dispute whereby a lessee is asked to vacate the leased premises, and the lessee executes a document entitled “Formal Surrender of the Leased Premises,” is there an actual surrender of the leased premises?

The Supreme Court answered this in the negative in the case of Remington Industrial Sales Corp. v. Chinese Young Men’s Christian Assn. of the Phil. Islands, etc., G.R. No. 171858, January 22, 2007.  In that case, there was a lease contract over the ground and  second floors of a building. Due to disagreement on the rental, the lessee filed a petition for consignation for the court to accept its rental payments, but later on made a “Formal Surrender of the Leased Premises” over the ground floor. It however retained the key of the door or passage way to the second floor as it was using the same.

The Supreme Court found that the lessor could already take legal and actual possession of the premises. Despite the collateral use of the passageway to the second floor, the area in dispute was already effectively surrendered and vacated by the lessee. The filing of the Formal Surrender at the MeTC-Manila constituted the lessee’s constructive delivery of the said premises. Thereafter, it actually emptied and vacated the premises. Therefore, legal and actual possession is restored to the lessor.

On the other hand, where surrender of leased premises is refused by a lessee upon termination of the lease, what is the remedy of the lessor?

In Viray and De Asis vs. Intermediate Appellate Court, G.R. No. 81015, July 4, 1991, the lease had been licitly terminated but the lessee failed to surrender possession of the leased apartment to the lessor. They did not show up during the repossession undertaken by the lessor, announced in advance through the posting of another notice on the door of the apartment. The repossession was pursuant to a provision in their lease agreement empowering the lessor to repossess the apartment extrajudicially.

The lessees (tenants) brought a forcible entry suit against the lessor (the landlord) on the theory that the stipulation in the lease contract authorizing repossession by the lessor without court action was void as contrary to public policy.

The Supreme Court upheld as valid such provision in the lease agreement because the same is in the nature of a resolutory condition. Upon the exercise by the lessor of his right to take possession of the leased property, the contract is deemed terminated, and that such a contractual provision is not illegal, there being nothing in the law prescribing such kind of agreement.

Where a similar provision exists in a lease agreement, the landlord may enter and take possession of the premises. The right of the owner to recover possession of the leased premises prevents the lessee from filing a case of ejectment against the lessor. Otherwise, the absurd result would follow that a tenant ousted under the circumstances would be restored to possession, but only to be subjected to ejectment proceedings by the landlord to recover possession of the property.

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