Home » Articles » Legal Advice

Lessor should be paid back rentals...

Lessor should be paid back rentals
"I entered into a contract of lease with a certain lot owner. In the said lease, we agreed to a three-year lease, in which I will construct a small convenience store. To pay for the monthly rentals, I agreed to transfer the constructed convenience store at the expiration of the lease. However, halfway through the contract, the convenience store was accidentally burned down. The lot owner now demands that I pay him the agreed back rentals equivalent to the full value of the convenience store. I just want to know the propriety of the lessor’s demand considering that I was not able to use the leased property after it was burned down. Thank you, and God bless.Tessa Dear Tessa,Please be informed that your query has already been answered in the case of Spouses Ricardo and Elena C. Golez vs. Meliton Meleño (G.R. No. 178317, September23, 2015, citingin P. C. Javier & Sons, Inc. vs. Court of Appeals, 500 Phil. 419, 433 (2005)),where the Honorable Supreme Court, through Honorable former Associate Justice Martin Villarama, Jr. held that: “This Court finds no reason to depart from the ruling of the courts a quo that petitioners should pay respondent for back rentals. There is no dispute that the contract entered into by the parties is one of lease. True, it had some modifications such that instead of paying the rent in the form of money, petitioners will withhold such payment and will apply the accumulated rent to the cost of the building they built on the leased property.Thereafter, at the end of the lease period or until such time the cost of the building has been fully covered by the rent accumulated, petitioners, as lessees will transfer the ownership of said building to respondent. Unfortunately, the subject building was gutted down by fire. However, the destruction of the building should not in any way be made a basis to exempt petitioners from paying rent for the period they made use of the leased property. Otherwise, this will be a clear case of unjust enrichment. As held in P. C. Javier & Sons, Inc. v. Court of Appeals:* * *The fundamental doctrine of unjust enrichment is the transfer of value without just cause or consideration. The elements of this doctrine are: enrichment on the part of the defendant impoverishment on the part of the plaintiff and lack of cause. The main objective is to prevent one to enrich himself at the expense of another. It is commonly accepted that this doctrine simply means that a person shall not be allowed to profit or enrich himself inequitably at another’s expense.In the instant case, there is no dispute that petitioners used the property for several years for their own benefit having operated a restaurant thereon. Therefore, it would be the height of injustice to deprive respondent of compensation due him on the use of his property by petitioners. The fact that the parties agreed to a different mode of payment - in this case, a building - does not in any way exempt petitioners from paying compensation due to respondent for the use of the latter’s property because the building was destroyed.” Clearly, you are still required to pay the lessor back rentals for the use and possession of his lot. However, it must be clarified that you are only liable to pay rentals for the period that you were in possession of said lot. The Supreme Court, in the abovementioned case, further explained that:“While we sustain the award of back rentals in favor of respondent, we do not agree with the amount imposed by the courts a quo. Petitioners should only be liable for rent during the period within which they were in possession of the leased property. Respondent himself testified that petitioner Ricardo stayed in the building on the leased premises just before it was burned down. There was no evidence submitted to prove that petitioners were in possession of the leased property after the fire. Therefore, petitioners should be made to pay rent until that time only. To order petitioners to pay for back rentals equivalent to the cost of the building is in the same way, unjust enrichment this time on the part of respondent considering that the rent due for the period petitioners occupied the leased premises is way below the cost of the building.” [Emphasis supplied]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 enlighten you 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 ."
 

Please support us in writing articles like this by sharing this post

Share this post to your Facebook, Twitter, Blog, or any social media site. In this way, we will be motivated to write articles you like.

--- NOTICE ---
If you want to use this article or any of the content of this website, please credit our website (www.affordablecebu.com) and mention the source link (URL) of the content, images, videos or other media of our website.

"Lessor should be paid back rentals" was written by Mary under the Legal Advice category. It has been read 212 times and generated 0 comments. The article was created on and updated on 15 September 2021.
Total comments : 0