This article was originally published on June 1, 2022 and has been updated to reflect recent legal developments.
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
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. (Article 1650 of the Civil Code of the Philippines)
May a lessee sublease the property?
If a lessee entered into a 5-year contract of lease with the lessor and by some event he cannot continue with the lease, may he sublease the property he rented?
Yes, provided there is no express prohibition in the contract of lease.
Under Article 1650 of the Civil Code of the Philippines, the law provides:
“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.”
Hence, a lessee can sublease the property as long as the contract does not clearly forbid it. Even if he subleases, he remains responsible to the lessor.
Nature of a Sublease
In Analita P. Inocencio v. Hospicio De San Jose, G.R. No. 201787, September 25, 2013, the Supreme Court explained in a sublease, the lessee becomes in turn a lessor to a sublessee. The sublessee then becomes liable to pay rentals to the original lessee. However, the juridical relation between the lessor and lessee is not dissolved. The parties continue to be bound by the original lease contract. Thus, in a sublease arrangement, there are at least three parties and two distinct juridical relations.
Legal Relations Between Lessor and Sublessee
Under the Civil Code of the Philippines:
“Article 1651. Without prejudice to his obligation toward the sublessor, the sublessee is bound to the lessor for all acts which refer to the use and preservation of the thing leased in the manner stipulated between the lessor and the lessee.”
Thus, the sublessee must still use and take care of the property properly, following the terms agreed upon in the original lease.
Moreover, Article 1652 states that the sublessee is subsidiarily liable to the lessor for any rent due from the lessee. However, the sublessee shall not be responsible beyond the amount of rent due from him, in accordance with the terms of the sublease, at the time of the extrajudicial demand by the lessor.
Payments of rent in advance by the sublessee shall be deemed not to have been made, so far as the lessor’s claim is concerned, unless said payments were effected in virtue of the custom of the place.
Therefore, the sublessee may be required to pay unpaid rent, but only within the limits of what he owes under the sublease. Advance payments to the lessee may not protect him against claims of the lessor
Effect of Eviction
In Intramuros Administration v. Offshore Construction Development Co., G.R. No. 196795, March 7, 2018, the Court held that a sublessee cannot invoke a superior right over that of the sublessor. A judgment of eviction against respondent will affect its sublessees since the latter’s right of possession depends entirely on that of the former. A complaint for interpleader by sublessees cannot bar the recovery by the rightful possessor of physical possession of the leased premises.
Similarly, in Guevara Realty, Inc., v. The Honorable Court of Appeals, G.R. No. L-57469, April 15, 1988, the Court ruled a judgment of eviction against a lessee affects his sub-lessee, even if the latter are not sued in the ejectment case.This is so, because a sublessee can invoke no right superior to that of his sublessor, and the moment the latter is duly ousted from the premises, the former has no leg to stand on. The sublessees’ right, if any, is to demand reparation for damages from his sublessor, should the latter be at fault. The sublessees can only assert such right of possession as could have been granted them by their sublessor, their right of possession depending entirely upon that of the latter.
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