Does Accepting Boarders Breach a Contractual Prohibition Against Subleasing?

Dear Disappointed Lessor,

Yes, it can understandably be disappointing when agreed-upon contractual terms are not followed. While I do not have a copy of your actual lease contract, the key question is whether accepting boarders constitutes subleasing and, consequently, a breach of the contractual terms. With that in mind, let us examine what the law provides regarding leasing, lease contracts, and subleasing.

Leasing, Lease Contracts, and Subleasing

Under Article 1643 of the Civil Code of the Philippines (R.A. 386), a lease contract or contract of lease is an agreement whereby one party (lessor) binds himself to give another party (lessee) the enjoyment or use of a thing for a price certain and for a period which may be definite or indefinite, however, not exceeding 99 years. To wit: 

“Article 1643. In the lease of things, one of the parties binds himself to give to another the enjoyment or use of a thing for a price certain, and for a period which may be definite or indefinite. However, no lease for more than ninety-nine years shall be valid.”

Article 1650 provides that in the absence of an express prohibition, a lessee may sublease the property while remaining responsible to the lessor for the lease obligations. To wit:

“Article 1650. 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.”

The Supreme Court (SC), in Mallarte v. Court of Appeals, et al., G.R. No. 85108 (October 04, 1989), explains that the term “sublet” as used in the above provision means subleasing by surrendering of the possession and control of the premises, or at least a part of it. 

Does Accepting Boarders Constitute Subleasing?

In Mallarte, the Court ruled that accepting boarders or bedspacers is not equivalent to subleasing the premises, as mere lodging does not entail any transfer of a leasehold interest or possession and control of the premises.

Also cited in the decision, a violation of the prohibition against subleasing may arise when the arrangement effectively gives an unrelated person possession and use of part of the leased premises as a tenant.  

For example, where a lease covered one of the two houses of a double brick dwelling and prohibited subleasing, a technical violation may be found when the lessee rents out one of the rooms to an unrelated person who has a room and a private bath and is certified by the lessee as a tenant.

As a lessor, you should have expressly prohibited the acceptance of boarders, roomers, or lodgers, not merely subleasing (general), in the lease contract. The contract should also clearly identify the authorized occupants and require your prior written consent before allowing any additional occupants.

I hope this provides a clear explanation and initial guidance. For any further clarification or assistance with drafting or reviewing lease agreements in the Philippines, feel free to contact our team at Duran & Duran-Schulze Law. We are located just in Bonifacio Global City (BGC), Taguig, Metro Manila. You may call us at (02) 8928 9535 (landline) or +639171940482 (mobile), or email info@duranschulze.com.