Philippine Jurisprudence and the Civil Code

In the Philippine legal system, a commercial lease is more than a mere business arrangement; it is a reciprocal contract that imposes specific statutory obligations on the lessor (landlord) to ensure the lessee (tenant) can utilize the premises for the intended business purpose. When a landlord interferes with a tenant’s operations, it may constitute a breach of the "warranty of peaceful possession," providing the tenant with legal grounds to terminate the lease.

The primary governing law is the Civil Code of the Philippines, specifically under the provisions on Lease (Articles 1642 to 1688).

1. The Statutory Obligation of the Landlord

Under Article 1654 of the Civil Code, every lessor is obliged by law—even if not explicitly stated in the contract—to:

Deliver the thing which is the object of the contract in such a condition as to render it fit for the use intended;
Make all necessary repairs to keep it suitable for the service to which it has been devoted;
Maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract.

Interference is essentially a violation of this third obligation. It occurs when the landlord’s actions (or omissions) disturb the tenant’s business operations or physical possession.

2. Legal Grounds for Termination

A tenant cannot terminate a lease for trivial annoyances. To legally rescind or terminate the contract under Article 1659, the interference must be substantial. Grounds include:

A. Physical Intrusion and Alteration

If the landlord enters the premises without consent or performs unauthorized "improvements" that hinder business flow, they violate the tenant's right to exclusivity. Article 1661 explicitly states: “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.”

B. Constructive Eviction

This occurs when the landlord does not physically kick the tenant out but makes the environment so uninhabitable or unusable that the tenant is forced to leave. Examples include:

Cutting off essential utilities (water, electricity) without legal cause.
Blocking access points or parking spaces vital for customers.
Failing to perform "necessary repairs" that result in a breakdown of business operations (e.g., a leaking roof that destroys inventory).

C. Failure to Maintain Peaceful Possession

If a third party claims legal rights to the property (e.g., a foreclosure or a superior title) and the landlord fails to defend the tenant against these claims, the tenant may terminate. Note that under Article 1664, the landlord is not liable for "mere acts of trespass" by third parties; the landlord is only liable if the third party acts based on a legal right.

3. Judicial vs. Extrajudicial Termination

The termination process in the Philippines generally follows these paths:

The Remedy of Rescission: Under Article 1659, if one party fails to comply with their obligations, the aggrieved party may ask the court for the rescission of the contract and indemnification for damages.
Contractual Provisos: Most commercial leases have a "Termination Clause." If the landlord’s interference falls under a prohibited act defined in the contract, the tenant may terminate following the notice period stipulated.
Suspension of Rent: Under Article 1658, a lessee may suspend the payment of rent if the lessor fails to make necessary repairs or maintain the lessee in peaceful and adequate enjoyment. This is often a precursor to termination.

4. Elements Required to Win a Claim

To successfully terminate a lease based on interference, the tenant must prove:

The Fact of Interference: Evidence that the landlord performed an act (or failed to act) that disturbed the business.
Substantiality: The disturbance was not "de minimis" (trivial) but significantly impaired the business use of the property.
Notice to the Lessor: The tenant must typically show they informed the landlord of the problem and provided a reasonable opportunity to rectify it (unless the interference was an intentional, malicious act).

5. Recoverable Damages

If the court finds the landlord’s interference was unjustified, the tenant may be entitled to:

Actual/Compensatory Damages: Lost profits (lucrum cessans) and actual expenses incurred due to the interruption.
Moral Damages: If the landlord acted fraudulently or in bad faith.
Exemplary Damages: To set an example for the public good if the interference was particularly oppressive.
Attorney's Fees: Especially if the tenant was forced to litigate to protect their rights.

Note on "Self-Help" Tenants are cautioned against simply abandoning the property without formal notice or legal action. Without a clear paper trail or a judicial decree of rescission, the landlord might counter-sue for "unlawful abandonment" or breach of contract.