1) The core idea: rent follows the right to possess and enjoy

In Philippine civil law, rent is a “civil fruit” of property. As a rule, civil fruits belong to whoever is legally entitled to enjoy/possess the property—most commonly the owner, but sometimes a usufructuary (someone who has the right to use and enjoy the property and collect its fruits), or another person specifically granted that right.

So when a leased property is transferred by donation, the key question becomes:

After the donation takes effect, who has the right to collect the civil fruits (rent)? Usually: the donee (new owner)—unless the donor reserved something.

2) When does the donation “take effect” for purposes of rent?

A. Donation inter vivos (between living persons)

For immovable property (land/building/condo unit), a valid donation generally requires:

A public instrument (notarized deed) identifying the property, and
Acceptance by the donee in the proper form (often in the same deed or a separate public instrument, with proper notice to the donor).

Once the donation is perfected and ownership is transferred, the donee becomes the new owner and is generally entitled to the rent from that point forward.

B. Donation mortis causa (in the nature of a will)

If the “donation” is really mortis causa (intended to take effect only upon death), then ownership does not transfer while the donor is alive. In that case:

The donor (or their authorized agent) continues to receive rent while alive; and
After death, rent typically goes to the estate (through the executor/administrator) until settlement distributes the property.

Practical takeaway: the date and nature of the instrument matters. A deed titled “donation” isn’t always decisive; the legal effect depends on its terms.

3) Default rule: after a valid donation, the donee receives the rent

If the donor donates the property without reservations:

Rents accruing after the transfer belong to the donee.
The donee effectively steps into the position of the lessor (landlord) with respect to the lease—subject to the lease’s terms and applicable law.

What about rent that accrued before the transfer?

Rents already earned/earned for prior periods generally belong to the donor (the lessor at that time).
Rents earned after transfer generally belong to the donee.

Because rent is a civil fruit that accrues with time, questions can arise when rent is paid monthly/quarterly/annually or in advance—see Section 6.

4) Common exceptions: when the donor still receives rent after donating

Even if ownership transfers, the right to collect rent can be separated from bare ownership. The most common ways:

A. Donation with reservation of usufruct

A donor may donate the bare ownership but reserve usufruct for themselves (often for life). If so:

The donor (as usufructuary) keeps the right to possess/enjoy the property and collect rents during the usufruct.
The donee owns the property, but the donee’s right to collect rent is postponed until the usufruct ends.

B. Donation with reservation of “right to the fruits” (or similar clause)

Sometimes the deed reserves to the donor the right to receive rentals for a period (e.g., “donated now, but donor keeps rentals for 2 years”). Depending on drafting, this may operate like a usufruct or a contractual allocation of fruits.

C. Donation subject to suspensive condition

If the donation is conditioned on a future event (e.g., “effective only upon graduation,” or “only if donee returns to the Philippines”), then:

Ownership (and the right to rent) may not transfer yet until the condition happens.

D. Co-ownership situations

If only a share is donated (e.g., 1/2 interest), then rent entitlement depends on:

Whether the property is leased as a whole, and
How co-owners manage fruits and expenses. Usually, fruits are shared proportionally unless a different arrangement exists.

5) The lease after donation: does the lease continue?

A. General principle: transfer of ownership does not automatically erase a lease

A lease is primarily a contractual relationship. When ownership changes hands, the new owner typically becomes the party entitled to enforce landlord rights for the period the lease remains binding.

But whether the donee must respect the lease can depend on factors such as:

The terms of the lease (duration, renewal, termination provisions),
Whether the lease is registered/annotated (important for enforceability against third persons in certain scenarios),
Whether the donee had actual knowledge of the lease, and
The nature of the property and applicable special laws (e.g., rules on residential rentals, if applicable).

In practice: most ordinary residential/commercial leases continue, and the usual change is simply who receives payment and who performs landlord obligations.

B. What does not change (unless the lease allows it)

A new owner generally cannot unilaterally change:

The rent amount,
The payment schedule,
The duration,
The security deposit terms,
Other material lease provisions, just because ownership changed—unless the lease contract or applicable law allows it.

6) Handling advance rent, post-dated checks, and security deposits

Ownership transfer by donation often creates messy real-world payment issues. Here’s how they’re typically handled.

A. Advance rent already paid to the donor

Scenarios:

Advance rent paid for a future period before transfer, and the lease continues after transfer.
- If the lessee paid the donor in good faith before knowing about the transfer, that payment is usually treated as valid as against the lessee (see Section 7).
- The donor and donee may need to account between themselves (e.g., donor turns over the unearned portion to donee), depending on their deed and internal arrangement.
Advance rent required by lease at inception (e.g., “one month advance”).
- If it corresponds to a specific future month, the new owner typically honors it as already paid; internal reimbursement is between donor and donee.

B. Security deposit

Security deposits are usually refundable at end of lease subject to deductions. When ownership changes:

The new owner commonly becomes responsible to return the deposit at lease end, because they are now the party in control of the leased premises and enforcement of deductions.
But practically, the donee should receive/collect the deposit from the donor during turnover. If they don’t, disputes can arise.

Lessee-protection practice: keep the lease, receipts, deposit proof, and demand written acknowledgment from the new owner that the deposit is recognized.

C. Post-dated checks (PDCs)

If the lessee issued PDCs payable to the donor:

Once the lessee is notified that the donee is the new payee/lessor (or that the donor reserved usufruct), the lessee should stop payment and reissue if appropriate, to avoid paying the wrong party.

7) Lessee’s payment duty: who is the proper person to pay?

Under the law on obligations, payment should be made to the creditor (the person entitled to receive it) or an authorized representative.

A. Before notice: payment to the old lessor may protect the lessee

If the lessee pays the donor before receiving reliable notice of the transfer, and does so in good faith, the lessee is often protected against being forced to pay twice—because the lessee paid the person who appeared entitled at the time.

B. After notice: the lessee must pay the person now entitled

Once the lessee receives credible notice that:

ownership has transferred to the donee (and no reservation of usufruct exists), or
a usufruct/right to rentals exists in favor of someone else,

then the lessee should pay the person entitled going forward. Continuing to pay the donor after such notice can expose the lessee to:

double liability (donee can still demand payment), and/or
lease breach claims (non-payment to rightful lessor).

C. What counts as “credible notice”?

Best practice is for the new party demanding rent (donee or usufructuary) to provide:

A written notice to the lessee,
Proof of authority/right (e.g., deed, proof of acceptance, and ideally updated title/annotation or other reliable documentation),
Clear payment instructions (bank details, payee name).

The lessee is not required to be naïve. If two people claim rent, the lessee can demand proof and take protective steps (next section).

8) If both donor and donee demand rent: what should the lessee do?

This is the most important “lessee rights” scenario.

A. The lessee has a right to protect against double payment

When there is a genuine dispute or uncertainty as to who is entitled to receive rent, the lessee can:

Request written proof from both sides, and
If the dispute remains, consider consignation (depositing payment in court) to avoid default.

Consignation is a legally recognized way to pay when:

the creditor refuses payment, or
there are competing claims, or
the creditor is unknown or incapacitated, and the debtor wants to be released from liability.

Practical note: consignation has technical requirements; it’s often done with legal assistance, but conceptually it is the lessee’s “safe harbor” against paying the wrong party.

B. Interim practical steps (even before consignation)

Put all communications in writing.
Ask for a written agreement between donor and donee (or their counsel) directing who should receive rent.
Avoid cash payments; pay via traceable methods.
Preserve proof of all payments and notices.

9) Lessee’s substantive rights that remain enforceable after donation

Regardless of who becomes entitled to rent, the lessee generally retains key rights under the lease and civil law principles, such as:

A. Right to peaceful/undisturbed possession

The lessee is entitled to enjoy the premises for the lease term, subject to the lease and law. A new owner cannot simply harass or lock out the tenant because ownership changed.

B. Right to enforcement of the lease terms

If the lease provides for:

fixed term,
renewal options,
notice periods,
maintenance obligations,
restrictions on entry, the lessee can enforce those against the party who steps into the lessor position (subject to enforceability against transferees, registration/notice issues, and specific facts).

C. Right to receipts and proper accounting

The lessee can demand rent receipts and acknowledgment of deposits/advance payments.

D. Right to due process in eviction

Even if eviction is lawful, it must follow proper legal procedures; self-help eviction is risky and often unlawful.

10) The new owner’s rights and duties (donee as new lessor)

If the donee becomes entitled to collect rent, they usually also assume the lessor-side obligations, such as:

honoring the lease (if binding),
maintaining habitability/fitness where required by contract and law,
respecting privacy/entry rules,
returning the security deposit at end subject to lawful deductions,
giving required notices for termination/non-renewal.

11) Special drafting clauses to look for in the donation deed and lease

Because the answer can shift dramatically based on documents, these clauses matter most:

In the Deed of Donation

Reservation of usufruct
Reservation of rentals/fruits
Conditions (suspensive/resolutory)
Effective date clauses
Allocation of prepaid rent and deposits
Authority to manage/lease

In the Lease Contract

Clauses on transfer/assignment of ownership
Clauses requiring tenant attornment to a new owner
Registration/annotation obligations (if any)
Payment method and payee change procedure
Termination rights triggered by sale/transfer (if any)

12) Practical checklist (Philippine setting)

For Donee (new owner)

Give written notice to tenant.
Provide proof of right to collect rent.
Clarify treatment of advance rent and security deposit.
Coordinate with donor to avoid conflicting demands.

For Donor

If you reserved usufruct or rentals, notify the tenant clearly with proof.
If you did not reserve rentals, stop collecting after transfer (to avoid liability to donee and confusion for tenant).

For Lessee (tenant)

Ask for written proof before changing payee.
Pay only once; avoid cash; keep records.
If competing claims persist, consider consignation or obtain a written joint directive.

13) Bottom line rules (easy summary)

If the donation validly transfers ownership and there is no reservation, the donee should receive rent going forward.
If the donor reserved usufruct or the right to rentals, the donor (as usufructuary/beneficiary) receives rent during that period.
The lessee is generally protected for payments made in good faith to the apparent lessor before reliable notice.
After reliable notice, the lessee should pay the person legally entitled—or protect themselves through written verification and, if needed, consignation.
The lease usually continues; the main change is the identity of the party entitled to enforce landlord rights and collect rent, subject to enforceability rules and the specific documents.

This article is for general legal information in the Philippine context and is not legal advice. For document-specific conclusions (especially on enforceability against a transferee, reservations in the donation, and remedies like consignation), consult a Philippine lawyer who can review the deed of donation, the lease, and the title/annotations.