PERSONS DISQUALIFIED TO BECOME LESSEES

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• A husband and a wife cannot lease to each other their separate properties.

• However, husband and a wife may lease property to each other provided separation of property was agreed upon in the marriage settlement and there has been a judicial separation of property.

• While foreigners in general cannot buy rural or urban lands, they may become lessees.

May everyone be lessee?

No.

The law says:

ART. 1646. The persons disqualified to buy referred to in Articles 1490 and 1491, are also disqualified to become lessees of the things mentioned therein.

Articles 1490 and 1491 provides:

“ARTICLE 1490. The husband and the wife cannot sell property to each other, except:

1. When a separation of property was agreed upon in the marriage settlements; or
2. When there has been a judicial separation of property under Article 191.

ARTICLE 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another:

1. The guardian, the property of the person or persons who may be under his guardianship;
2. Agents, the property whose administration or sale may have been intrusted to them, unless the consent of the principal has been given;
3. Executors and administrators, the property of the estate under administration;
4. Public officers and employees, the property of the State or of any subdivision thereof, or of any government-owned or controlled corporation, or institution, the administration of which has been intrusted to them; this provision shall apply to judges and government experts who, in any manner whatsoever, take part in the sale;
5. Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession;
6. Any others specially disqualified by law.”

A husband and a wife cannot lease to each other their separate properties except:

1. If a separation of property was agreed upon in the marriage settlement;
2. If there has been a judicial separation under Art. 135 of the Family Code. That is:

“Art. 135. Any of the following shall be considered sufficient cause for judicial separation of property:

1. That the spouse of the petitioner has been sentenced to a penalty which carries with it civil interdiction;
2. That the spouse of the petitioner has been judicially declared an absentee;
3. That loss of parental authority of the spouse of petitioner has been decreed by the court;
4. That the spouse of the petitioner has abandoned the latter or failed to comply with his or her obligations to the family as provided for in Article 101;
5. That the spouse granted the power of administration in the marriage settlements has abused that power; and
6. That at the time of the petition, the spouses have been separated in fact for at least one year and reconciliation is highly improbable.

In the cases provided for in Numbers (1), (2) and (3), the presentation of the final judgment against the guilty or absent spouse shall be enough basis for the grant of the decree of judicial separation of property.”

Reasons for the disqualification:

1. To prevent prejudice to creditors; 
2. To prevent the stronger spouse from influencing unduly the weaker spouse.

Persons referred to under Art. 1491 are disqualified because of fiduciary relationships.

While foreigners in general cannot buy rural or urban lands, they may become lessees thereof since the reason for the law — fiduciary relationship — does not exist in this case. (Smith, Bell and Co. v. Reg. of Deeds, 96 Phil. 53). Hence, foreigners may lease land from others.

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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