In the Philippine real estate market, it is not uncommon for a person other than the registered owner—such as a relative, an attorney-in-fact, or a sublessor—to offer a property for lease. While the Civil Code of the Philippines and the Rent Control Act provide robust protections for lessees, leasing from a non-owner introduces unique legal layers regarding the validity of the contract and the tenant's security of tenure.
1. The Legal Basis: Can a Non-Owner Lease a Property?
Under Philippine law, a lessor does not necessarily have to be the owner of the property to create a valid lease agreement. Article 1643 of the Civil Code defines a lease as a contract where one party 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.
The primary requirement is that the lessor must have the legal right to possess the property and the capacity to transfer that possession to the tenant. This can occur in several scenarios:
- Authorized Representatives: An agent acting under a Special Power of Attorney (SPA).
- Usufructuaries: Individuals who have the right to enjoy the fruits of a property owned by another.
- Sublessors: Existing tenants who have been granted the right to sublease by the owner.
2. Key Scenarios and Tenant Protections
A. Leasing through an Attorney-in-Fact
When dealing with a representative (e.g., the owner is abroad), the validity of the lease hinges on the Special Power of Attorney (SPA).
- Tenant Right: The tenant has the right to demand a copy of the SPA. If the agent signs the lease without specific authority to "lease the property for more than one year," the contract may be unenforceable under Article 1878 of the Civil Code.
- Protection: As long as the agent acted within their authority, the owner is bound by the contract and cannot arbitrarily evict the tenant.
B. Subleasing Arrangements
A sublessor is a non-owner who is themselves a tenant.
- The Default Rule: Under Article 1650, if the main lease contract does not expressly prohibit subleasing, the tenant may sublet the whole or part of the thing leased.
- Tenant Right: The sublessee (the person renting from the non-owner) has the right to remain as long as the main lease is valid.
- The Risk: If the main lease is terminated (e.g., the primary tenant fails to pay the owner), the sublease is generally terminated as well, as the sublessee's right is "parasitic" to the main tenant's right.
C. The "Apparent Owner" (The Principle of Estoppel)
If a tenant enters into a lease in good faith with someone who appears to have the authority to lease (but actually doesn't), the law provides some protection through Estoppel.
- Article 1431: If the true owner allowed the non-owner to appear as the person in charge, the owner may be "estopped" from denying the validity of the lease to the detriment of the innocent tenant.
3. Rights Under the Rent Control Act (R.A. 9653)
If the property is residential and falls under the rent brackets covered by the Rent Control Act of 2009, the tenant enjoys specific protections regardless of whether the lessor is the owner:
- No Arbitrary Eviction: The lessor cannot evict the tenant simply because they want to sell the property or because they have a personal disagreement.
- Grounds for Eviction: Eviction is only valid for specific reasons, such as non-payment of rent (3 months), legitimate need of the owner/lessor to repossess for their own use, or the need for necessary repairs.
- Limit on Deposits: The lessor can only demand a maximum of one (1) month advance rent and two (2) months security deposit.
4. Risks and Remedies: What Happens if the Contract is Disputed?
The "Third Party" Claim
If a tenant is leasing from a non-owner and the real owner appears and demands the tenant vacate, the tenant is in a precarious position.
- Warranty Against Eviction: Under Article 1654, the lessor is duty-bound to maintain the lessee in the peaceful and adequate enjoyment of the lease. If the tenant is evicted because the non-owner had no right to lease the property, the tenant can sue the non-owner for damages and a refund of payments.
- Payment in Good Faith: If the tenant pays rent in good faith to the person who possessed the property, they may be protected from having to pay the same rent twice to the real owner, though this often requires judicial intervention.
5. Due Diligence Checklist for Tenants
To safeguard rights when leasing from a non-owner, the following steps are legally prudent:
- Verify the Title: Ask for a photocopy of the Transfer Certificate of Title (TCT) to identify the registered owner.
- Verify Authority: If the lessor is not the person on the TCT, demand a notarized Special Power of Attorney (SPA) or a Secretary’s Certificate (if leasing from a corporation).
- Check the Main Lease: In subleasing, ask to see the original lease contract to ensure there is no "Prohibition to Sublease" clause.
- Register the Lease: For long-term protection, a lease contract of more than one year should be notarized and, ideally, annotated on the property's title at the Registry of Deeds to bind third parties (including future buyers).
| Type of Lessor | Required Document | Legal Risk |
|---|---|---|
| Owner | TCT / CCT | Low |
| Attorney-in-Fact | Notarized SPA | Medium (Verify scope) |
| Sublessor | Original Lease Contract | High (Dependent on main lease) |
| Co-owner | Consent of other co-owners | Medium (Article 493) |
Summary of Tenant Rights
A tenant leasing from a non-owner has the right to peaceful possession, maintenance of the unit, and protection against illegal rent increases. However, the strength of these rights against the actual property owner depends entirely on the legal link (the "chain of authority") between the owner and the person who signed the lease.