Tuesday, June 24, 2014

Rent control law does not cover commercial space

Dear PAO,
I am leasing a commercial space for P5,000 a month. My tenant who is a barbershop owner is insisting that I cannot evict him as yet because he is paying rent. He claims that under the Rent Control Law, the lessor cannot eject the lessee unless he fails to pay rent for at least three months. Our contract of lease has already expired. Can I force my lessor to leave because I am having a difficult time dealing with him? Besides, I don’t want to extend our contract anymore.    
Dear Ruben,
The contract of lease you entered into with your tenant is not covered by the Rent Control Law. Republic Act (R.A.) 9653 or the Rent Control Act of 2009, covers only residential units. Section 5 thereof provides:
“Section 5. Coverage of this Act. – All residential units in the National Capital Region and other highly urbanized cities, the total monthly rent for each of which ranges from One peso (P1.00) to Ten thousand pesos (P10,000.00) and all residential units in all other areas, the total monthly rent for each of which ranges from One peso (P1.00) to Five thousand pesos (P5,000.00) as of the effectivity date of this Act shall be covered, without prejudice to existing contracts.”
Clearly, the commercial space you are leasing to your tenant is not covered by the abovementioned law. It is the provisions of the New Civil Code of the Philippines that govern it. The code provides that a lessor may eject a lessee under the following circumstances:
“Art. 1673. The lessor may judicially eject the lessee for any of the following causes:
(1) When the period agreed upon, or that which is fixed for the duration of leases under Articles 1682 and 1687, has expired;
(2) Lack of payment of the price stipulated;
(3) Violation of any of the conditions agreed upon in the contract;
(4) When the lessee devotes the thing leased to any use or service not stipulated which causes the deterioration thereof; or if he does not observe the requirement in No. 2 of Article 1657, as regards the use thereof.
Since according to you the contract of lease has expired, you may compel your lessee to vacate the commercial space you are leasing to him. However, if you let him stay for fifteen days more after the expiration of the contract, an implied new lease is created (Article 1670, New Civil Code of the Philippines).
The period of the new lease is not, however, the same with the stipulated period in the original contract agreed upon, but in accordance with Article 1682 of the New Civil Code of the Philippines, to wit:
“Art. 1687. If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month.”
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to guide you with our opinion on the matter.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

Thursday, June 12, 2014

Court of Appeals rules for Globe in Isabela ‘tower fees’ case

THE COURT of Appeals (CA) has ruled in favor of Globe Telecom, Inc. after the latter contested a local ordinance enacted by Santiago City, Isabela imposing “tower fees” on its cellular sites.

The appellate court’s 11th division, in a 19-page decision promulgated on May 30, nullified Santiago City’s Ordinance No. 6THCC-53 which ordered telecommunications companies to pay an annual P200,000 in “tower fees” as part of the city’s income generating schemes.

The CA decision reversed a Santiago City regional trial court (RTC) decision declaring the ordinance as valid and ordering Globe to pay P5.92 million in tower fees for its seven cell sites in the city.

“Evidently, there is no reasonable relation between defendant-appellee’s imposition of the subject tower fees and the promotion of health, morals, good order, safety or the general welfare of the people,” Associate Justice Vicente S.E. Veloso wrote.

Santiago City’s local government, in 2008, issued the resolution as part of its mandate under the Local Government Code’s General Welfare Clause.

The Santiago City RTC, in a May 10, 2012 decision, found that the ordinance was consistent with a local government’s authority to regulate companies operating within its jurisdiction.

However, the appellate court said the ordinance failed to adequately justify its regulation and restraint of property rights, and called the fee “patently oppressive, confiscatory and prohibitive.”

Associate Justices Jane Aurora C. Lantion and Nina G. Antonio-Valenzuela concurred with the decision. -- Mikhail Franz E. Flores

source:  Businessworld