Tenant Rights When a Landlord Sells the Property: Right of First Refusal and Ejectment Rules (Philippines)

Here’s a clear, practical explainer on what happens to Philippine tenants when the landlord sells the property—focusing on (1) any “right of first refusal” (ROFR) and (2) ejectment/eviction rules. It’s written for both residential and commercial leases and leans on the Civil Code of the Philippines (lease and property rules), the Rules of Court (Rule 70 on ejectment), the Property Registration Decree, rent-control statutes and their periodic extensions, and urban-housing laws. (This is general information, not legal advice.)

The big picture

  • A sale of the property does not automatically kick out a lawful tenant. As a rule, the buyer steps into the seller-landlord’s shoes and becomes the new lessor, bound by the lease if the lease is legally effective against third parties (more on that below).
  • There is no automatic right of first refusal for tenants in ordinary private leases. You only get ROFR if (a) it’s in your lease/another written agreement, or (b) a special law/ordinance gives it for your specific situation (e.g., certain socialized housing or urban-land reform contexts).
  • Ejectment (summary eviction) is limited. The buyer/landlord must rely on recognized grounds (lease expiry, nonpayment, owner’s use, etc.), give proper notice, and follow the Rule 70 summary-procedure track in the MTC if you don’t vacate.

1) Does the lease survive the sale?

Default rule: “Buyer becomes your new landlord”

  • The lease continues after the sale; the buyer typically assumes the lessor’s rights and obligations (collecting rent, maintenance duties, honoring the term), unless the buyer qualifies as an innocent purchaser not bound by the lease (see next items).

When is a buyer bound by your lease?

  1. Lease is annotated/registered on the title (TCT/OCT) or in the registry:

    • If properly annotated, the lease is a real right vis-à-vis third persons. Any buyer is charged with notice and must respect it for its term.
  2. Buyer has actual or constructive notice:

    • Even if unannotated, a buyer who knows about the lease—or who should have known because the tenant is openly in possession—can be bound. Possession puts prudent buyers on notice to inquire.
  3. Contract says the lease binds successors/assigns:

    • Most well-drafted leases say the lessor’s obligations bind successors and assigns. That strengthens the tenant’s hand vis-à-vis a buyer who knew or should have known of the lease.

When might a buyer not be bound?

  • On registered land, an unannotated long-term lease may not bind a purchaser in good faith who had no actual/constructive notice. In practice, visible possession by a tenant often defeats “good faith.”
  • Foreclosure priority: A mortgage recorded before your lease generally has priority; if the property is later foreclosed, the foreclosure buyer can take free of junior encumbrances. If your lease predated and was annotated before the mortgage, you usually keep priority.

Practical steps (tenants)

  • Get the lease in writing, notarized, and—if the term is over a year—strongly consider annotation at the Registry of Deeds.
  • Stay visibly in possession (don’t let the unit look “vacant” during viewings) and keep proof of possession/rent payments.
  • Ask for an attornment notice after the sale (a simple letter naming the buyer as new lessor and where to pay rent).
  • Security deposit: Clarify transfer. The new lessor should receive it from the seller; if not, the old lessor can remain liable to return it at end of lease.

2) Right of First Refusal (ROFR)

What it is—and isn’t

  • ROFR gives the tenant the priority to buy if the owner decides to sell, on the same terms as a bona fide third-party offer (or on stipulated terms).

  • ROFR is not automatic in Philippine private leases. It must be:

    • Contractual: Written in the lease or a separate agreement; or
    • Statutory/Ordinance-based: Certain urban-land reform declarations and socialized housing programs (e.g., under the Urban Development and Housing Act, UDHA) or older Urban Land Reform zones have given occupants a statutory priority in some government dispositions. These are specific and fact-dependent.

ROFR vs. Option to Buy

  • An option fixes the price/terms up front and can be specifically enforced if supported by consideration.
  • A ROFR ripens only when the owner decides to sell (or receives a bona fide offer). Court remedies for a breached ROFR have varied by facts: sometimes damages, in other cases rescission/annulment of a sale to a buyer who had notice of the ROFR.

Hallmarks of an enforceable ROFR clause

  • Clear trigger (e.g., owner decides to sell; receipt of bona fide offer).
  • Definite exercise period (e.g., 15–30 days from written notice).
  • Price/terms mirror the third-party offer (or a pricing mechanism everyone can compute).
  • Written notice requirement and how to exercise (registered mail/email + payment tender/earnest money).
  • Binding on successors/assigns and annotation on title to bind buyers.

If your ROFR was ignored

  • Act fast once you learn of the sale.
  • Gather evidence of the clause, the sale, and the new buyer’s knowledge.
  • Remedies can include damages and, in some fact patterns, setting aside the sale to a buyer with notice so you can buy on the same terms.

3) Ejectment after a sale (and in general)

Grounds commonly invoked (residential & commercial)

  • Expiration of the lease term (including month-to-month/tacita reconducción renewals).
  • Nonpayment or other material breach of the lease.
  • Owner’s bona fide need to use the property (for personal or immediate family use) or to demolish/convertsubject to rent-control rules, if applicable.
  • Illegal use or unauthorized subleasing when prohibited by lease.

Important: Philippine rent-control laws (e.g., RA 9653 and successive extensions via regulation) change over time and apply only within set monthly rent ceilings. Where applicable, they tighten ejectment rules (for example, typically requiring advance written notice—often three months—for owner’s use/demolition and disallowing eviction solely for sale unless the buyer will personally occupy). Always check the current thresholds and notice periods that apply to your unit.

The summary procedure (Rule 70, unlawful detainer/forcible entry)

  • Venue: Metropolitan/Municipal Trial Court where the property is.
  • When to file: Within one year from the last demand to vacate (unlawful detainer) or dispossession (forcible entry).
  • Pre-condition: Barangay conciliation (Katarungang Pambarangay) if parties reside in the same city/municipality and no exception applies.
  • What the court decides: Only material/physical possession (possession de facto), not ultimate ownership (though ownership questions can be touched upon to resolve possession).
  • Reliefs: Writ of possession, unpaid rents/damages, attorney’s fees. Appeal is available, but judgment can be executed unless stayed by supersedeas requirements.

Notice & demand

  • Always give formal written demand to pay and/or vacate. Your cause of action accrues when the tenant fails to comply within the demand period (often stated in the lease; if silent, use a reasonable period—30 days is common; longer if rent-control rules require it).
  • Keep proof of service (registered mail/ courier/ personal service with acknowledgment).

4) Special situations

Month-to-month (tacita reconducción)

  • If the written term ends but the tenant stays with the landlord’s consent (accepting rent), a new implied lease arises—commonly month-to-month when rent is monthly.
  • Either side may end it with reasonable written notice (again, watch for rent-control notice rules).

Security deposits and advance rents

  • On sale, the deposit and any advance rent should transfer to the buyer.
  • If the seller keeps the deposit, tenants may demand return from the seller at end of lease; buyers should require a deposit assignment at closing.

Commercial leases

  • No rent control. Parties’ contract largely governs. But registration/annotation and possession-as-notice principles still determine whether a buyer must honor the lease.

Government/urban-housing contexts

  • In declared urban-land reform zones or socialized housing programs (e.g., UDHA), occupants may have priority/ROFR or relocation rights when government disposes or clears land. These schemes are narrow and fact-specific; documentation of eligibility is key.

Agricultural tenancies (different law)

  • If you are a farmer-tenant, you’re under the agrarian-reform regime (CARL). Security of tenure is much stronger, and sale generally does not allow ejectment except on limited statutory grounds, under DAR jurisdiction.

Mortgage, foreclosure, and tax sales

  • Priority rules control: earlier-recorded encumbrances beat later ones. A prior mortgage can wipe out a later lease upon foreclosure; a prior, annotated lease can survive a later mortgage/foreclosure.

5) Practical checklists

For tenants

  • Before a sale

    • Put your lease in writing, notarize, and annotate if term > 1 year or if you want third-party protection.
    • Keep copies of the lease, receipts, and proof of possession.
    • If you bargained for ROFR, make it specific (trigger, period, price mechanism) and annotate if possible.
  • After you hear of a sale

    • Ask for attornment and where to pay.
    • Reassert your lease term and any ROFR in writing.
    • For deposits, confirm transfer or put the seller on written notice to return at end of lease.
  • If you get a notice to vacate

    • Check ground (expiry? owner’s use? breach?) and notice period (especially under rent control, if applicable).
    • Reply in writing; if the ground is invalid, say so; if the lease has time left, cite it.
    • If sued, appear and bring your documents; non-appearance can lead to judgment.

For landlords/buyers

  • Before you sell/buy

    • Diligence: inspect for actual occupiers, review the lease files, and check the title annotations.
    • If you need the unit vacant, plan well in advance, respecting lease terms and notice rules.
    • Get the deposit assignment in the deed of sale and reconcile prorated rent.
  • If you must evict

    • Serve proper written demand citing the ground and correct notice period (rent-control rules if applicable).
    • Barangay conciliation where required.
    • File Rule 70 within one year from accrual.
    • Keep communications civil and documented—courts look for good faith.

6) Sample ROFR clause (tenant-friendly but balanced)

Right of First Refusal. If Lessor decides to sell the Leased Premises during the Term, Lessor shall deliver to Lessee written notice of such decision together with the material terms of sale or a copy of any bona fide third-party offer received by Lessor. Lessee shall have 30 calendar days from receipt to exercise this right by written notice matching said terms and tendering earnest money equal to 5% of the purchase price. Failure to exercise within the period constitutes a waiver for that proposed sale only. This right binds Lessor’s successors and assigns and may be annotated on the title at Lessee’s expense. Any sale in violation of this clause shall be voidable at Lessee’s option, without prejudice to damages.

(Adjust timelines/earnest money to your market.)


7) Frequently asked questions

Does a landlord have to tell the tenant before selling? There’s no universal “pre-sale” notice duty in private leases. But if the buyer wants to take over rent collection or needs possession on a future date, written notice is standard—and mandatory in certain rent-control scenarios (e.g., owner’s personal use/demolition typically require advance notice, often three months, where rent control applies).

Can a buyer evict just because they bought the property? No. Sale alone isn’t a ground. The buyer must rely on lease expiry or another lawful ground, observe notice, and file Rule 70 if needed.

We’re on month-to-month—how much notice is “reasonable”? Many leases specify 30 days; courts accept “reasonable” notice. If rent-control applies, follow its longer statutory notice (commonly three months for owner’s use/demolition).

Our lease runs three more years but wasn’t annotated. Are we safe? If you’re openly in possession, the buyer is usually deemed on notice and can be bound. But annotation is still the best shield—especially if possession is ambiguous (e.g., mixed use, shared access).

Is the Maceda Law relevant? No. The Maceda Law protects buyers of real property on installment, not tenants.


8) Key takeaways

  • No automatic ROFR in private leases; you must contract for it or rely on a specific statute/ordinance that covers your situation.
  • Leases generally survive a sale and bind buyers who have notice (registration or possession).
  • Evictions are regulated: follow contract terms, rent-control notice (if applicable), and Rule 70 timelines.

One last thing

Rent-control thresholds and local housing rules change periodically (e.g., which monthly rents are covered, exact notice lengths). Since you asked me not to search, I’ve kept this guide jurisdiction-accurate but time-neutral. If you want, I can tailor this to your unit (rent amount, city, dates in your lease) and slot in the current notice periods and coverage in a follow-up.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.