In the Philippine jurisdiction, the relationship between a lessor (landlord) and a lessee (tenant) is governed primarily by the Civil Code of the Philippines and, for certain residential units, the Rent Control Act of 2009 (Republic Act No. 9653). One of the most common points of contention in these agreements is unauthorized sub-leasing.
Sub-leasing occurs when a lessee enters into a separate lease agreement with a third party (the sub-lessee) for all or part of the leased premises. While this is often a practical solution for tenants seeking to offset costs, doing so without legal or contractual authority constitutes a serious breach.
1. The General Rule under the Civil Code
The foundational law on sub-leasing is found in Article 1650 of the Civil Code, which states:
"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."
Key Takeaway:
- Permissive by Default: Unlike other jurisdictions, Philippine law generally allows sub-leasing unless the contract explicitly forbids it.
- Residual Responsibility: Even if sub-leasing is allowed, the original lessee remains primarily liable to the lessor for the payment of rent and the preservation of the property.
2. The Exception: Residential Units under Rent Control
For residential units covered by the Rent Control Act of 2009 (R.A. 9653)—specifically those within certain rent caps in highly urbanized cities—the rule is reversed.
Under Section 8(a) of R.A. 9653, "assignment of lease or subleasing of the whole or any portion of the residential unit, including the acceptance of boarders or bedspacers, without the written consent of the owner/lessor" is a valid ground for judicial ejectment.
| Context | General Rule (Civil Code) | Rent Control Act (R.A. 9653) |
|---|---|---|
| Sub-leasing Authority | Allowed unless expressly prohibited. | Prohibited unless written consent is given. |
| Consent Requirement | Silent/Not required if not in contract. | Mandatory written consent. |
3. Legal Consequences of Unauthorized Sub-leasing
When a lessee sub-leases a property in violation of an express prohibition in the contract or in violation of the Rent Control Act, the lessor has several legal remedies:
A. Rescission of the Contract
Under Article 1659 of the Civil Code, if the lessor or the lessee should not comply with their 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.
B. Judicial Ejectment (Unlawful Detainer)
The most common remedy is an action for Unlawful Detainer under Rule 70 of the Rules of Court. The lessor must first serve a "Demand to Vacate" based on the breach of the lease terms. If the lessee refuses to leave, the lessor may file a formal complaint in the Metropolitan or Municipal Trial Court.
C. Liability for Damages
The lessor may claim:
- Actual Damages: Loss of potential higher rent or physical damage caused by the sub-lessee.
- Liquidated Damages: If the contract specifies a penalty for breach of the "no sub-leasing" clause.
4. Relationship Between Parties
The law creates a specific hierarchy of liability to protect the lessor:
- Lessor vs. Sub-lessee (Rent): Under Article 1652, the sub-lessee is subsidiarily liable to the lessor for any rent due from the lessee. The lessor can collect directly from the sub-lessee up to the amount the sub-lessee owes the lessee.
- Lessor vs. Sub-lessee (Use of Property): The sub-lessee is bound to observe the terms regarding the use and preservation of the property as stipulated in the original lease (Article 1651).
- Invalidity of Sub-lease: If the primary lease is terminated or rescinded due to the lessee's breach (unauthorized sub-leasing), the sub-lease—which is merely a "daughter" contract—is also extinguished. The sub-lessee cannot claim a right to stay once the main lease is voided.
5. Common Defenses and Proof
For a lessor to successfully claim a breach, they must generally prove:
- The Prohibitory Clause: The existence of a clear "No Sub-leasing" provision in the written contract.
- The Act of Sub-leasing: Evidence that a third party is occupying the premises in exchange for rent. This is often proven through testimonies, social media advertisements, or receipts issued by the lessee to the sub-lessee.
Note on "Boarders": In residential settings, lessees often argue that the third party is a "guest" or a "relative." However, Philippine courts look at the financial arrangement. If there is a regular exchange of money for the use of the space, it is legally considered a sub-lease or a boarding arrangement, both of which require consent under the Rent Control Act.
Summary of Legal Grounds
A lessor has the ground to terminate a lease and evict a tenant for sub-leasing when:
- The written lease contract contains an express prohibition against it.
- The property is a residential unit under the Rent Control Act, and no written consent was obtained.
- The lessee assigns the lease entirely to a third party without permission (which is distinct from sub-leasing but governed by similar restrictive principles under Article 1649).