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Long term land lease

Discussion in 'Expat Section' started by Happyandre, Jan 13, 2018.

  1. Happyandre

    Happyandre DI New Member

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    I would prefer to have a house on a long term lease than something on a year to year basis and would want the option to either build or renovate etc.
    I understand as a foreigner I can't own land but can do a 25 year land lease with an option for another 25 years. If I do that need to get it all done buy a reputable attorney and ensure the lease is noted on the title deed.

    Questions :
    1/ Can I sell or pass on the lease if say I wanted to go somewhere else, can the name on the lease be changed or transferred to another ?

    2/ If say a house and land was for sale at 4M Pesso what would a 25 year renewable or maybe non renewable lease with up front payment cost ?

    3/ If I did a long term lease who pays taxes etc ... want to ensure I don't get evicted ?

    Just looking at options here...do remaining lease terms ever come available trying to think outside the box but within the law.
    Thanks in advance, happy to hear of anyone's thoughts.
     
  2. hawk263

    hawk263 DI Forum Adept Blood Donor Veteran Army

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    One option is that you actually buy the property, put it in the name of a Filippino you trust (cannot be a wife) who would then sign a 25 +25 year lease, Irrevocable Special Power of Attorney and Affidavit of Undertaking. The land must be in the name of the Filippino but the house can be owned by the foreigner. The documents should be annotated on the Title. Another option is to form a corporation of which you own 40% and the remainder is owned by Filippinos who sign SPA's in your favour.
    You definitely need to get the advice of a reputable attorney.
     
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    Happyandre

    Happyandre DI New Member

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    I know about the company thing .. same in Thailand but I like the lease idea after buying it in someone else's name.. and sometime in the future their kids will benefit.
     
  4. Mom Miriam

    Mom Miriam DI Member

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    Not at all. Aren't we here to share? ... Now I am ordinarily just any one and I am not a legal professional. The thoughts I share rise from work experience gained here and there.

    Basically, a contract is law between the two parties that forge it. Performance of its provisions are binding as obligation between both parties as long as these do not contravene or countervail Philippine law; otherwise, existing law would render such contravening or countervailing provisions either null and void from the start, voidable, or illegal.

    Question 1/ Can I sell or pass on the lease if say I wanted to go somewhere else, can the name on the lease be changed or transferred to another ?

    Answer 1/ In theory, selling lessor rights or passing on the lease to another for the remaining unaccrued lease period can be made possible by simply inserting such a clause in the long term lease and having it mutually agreed upon by both contracting lessor (landlord) and lessee (lessee).

    In actual practice, however, this possibly cannot be easily done because the lessor will reserve his right to evaluate the lease-buyer/catcher and therefore may not agree to such a provision unless another clause that defines his specifications for an acceptable lease-buyer/catcher is also inserted.

    Question 2/ If say a house and land was for sale at 4M Pesso what would a 25 year renewable or maybe non renewable lease with up front payment cost ?

    Answer 2/ It seems provincial data are not published and only Metro Manila buying price-to-rental price statistics are available online. Perhaps one can interpollate provincial prices from the Metro Manila data at Philippines: rental yields in Manila range from good to excellent

    Question 3/ If I did a long term lease who pays taxes etc ... want to ensure I don't get evicted ?

    Answer 3/ Real property tax (RPT) is lawfully an obligation of the property owner or the lessor (assuming he himself is the owner). A lessee should not agree to be burdened with the RPT in any lease contract; and he cannot be evicted for non-performance of an obligation that is not his duty.

    Just in case the owner/lessor proves to be tax delinquent and unpaid RPT accumulates to a point where it can justifiably constitute a lien on the property so that the local government acquires it through Court decision; or if the lessor assigns or sells the property to another, there should already be inserted, before contract signing, a clause providing for the long term lease to be honoured and respected regardless of and notwithstanding any change of ownership while the lease is accruing to its end, to protect the lessee’s rights. Hence, a lessee should only get evicted for violating the terms of the long term lease contract he forged with the lessor. Still, a lessee could also get possibly evicted if he commits an illegal act that causes harm to the lessor's person or his leased property.

    * * * * * * * * * * *

    Mind you, Philippine democracy works such that every person is entitled to his opinion. Opinions -- whether legal professional advice rendered to earn a living or layman's thought freely rendered in fellowship -- may conflict and can clash to a point of disharmony where a FINAL RESOLUTION is required for the material settlement. In that instance, people refer to the most recent decision on like matter penned by the Supreme Court (the body created and solely authorized by the Philippine Constitution to interpret laws); or, where there is none yet, people file a case to obtain a land mark decision from the Supreme Court.
     
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    Last edited: Jan 13, 2018
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    Happyandre

    Happyandre DI New Member

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    Wow... that's great stuff to think about... thanks for the intelligent input.... so we need to work out what could possibly happen and implement clauses etc into the lease to try and cover contingencies that might occur. Realistically if one took out a 25+25 lease apart from storing nuclear waste, using the land for other what it was originally designed ie residential building etc if the lessee had an issue with reasonable clauses to protect my rights as a lessor one would imagine the lessee would either be hoping for an avenue to get the property back or not realistic about a fair lease. At the same time the lessor would need to accept reasonable clauses to protect the rights of the property owner.
    Thanks again Mom Miriam
     
  6. Mom Miriam

    Mom Miriam DI Member

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    "And give thanks for everything to God the Father in the name of our Lord Jesus Christ." Eph5:20NLT ... Have a blessed Sunday!
     
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