Lessee’s right of first refusal

Dear Melanie,

We are under the impression that you are asking if your family en

- ential right is a right which gives

opportunity to either purchase or lease a property, or to enjoy a provided by contract or by law. In order to determine the exis

we need to examine the lease contract entered into between your family and the original owner. In

(GR 140182, April 12, 2005), the Supreme Court, speaking through former Associate Justice Alicia Austria-Martinez, explained:

“When a lease contract contains

under a legal duty to the lessee not to sell to anybody at any price until after he has made an offer to sell to the latter at a certain price and the lessee has failed to accept it. The lessee has a right that the lessor’s

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integral and indivisible part of the contract of lease and is inseparable from the whole contract. The consideration for the lease includes the

refusal and is built into the reciprocal obligations of the parties.” Further, in

( GR 171146, Dec. 7, 2011), penned by former chief justice Teresita Leonardo-de Castro, the Supreme Court held:

“It is basic that a contract is the law between the parties. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Unless the stipulations in a contract are contrary to law, morals, good customs, public order or public policy, the same are binding as between the parties – x x x”

be provided by law. For instance, Section 6 of Presidential Decree (PD) 517, which provides that:

“Within the Urban Zones legitimate tenants who have resided on the land for ten years or more who have built their homes on the land and residents who have legally occupied the lands by contract, continuously for the last ten years shall not be dispossessed of the land and shall be allowed the the same within a reasonable time and at reasonable prices, under terms and conditions to be determined by the Urban Zone Expropriation and Land Management Committee created by Section 8 of this Decree.”

In order for the above provision to apply, it is required that the lessee/tenant built the house in the leased land. However, in your case, it is worthy to note that, before your family entered into lease contract, the house you rented was already built by the owner/ lessor. Hence, PD 1517 does not apply in your situation.

After you determine that right

contract, your family has the right to rescind the contract of sale within the period prescribed by law. In case cited above, the Supreme Court further explained, that:

“The rule is that a sale made in

valid. However, it may be rescinded, or, as in this case, may be the subject of an action for specific performance.” (Underscoring supplied)

We hope that we were able to answer your queries. This advice is based solely on the facts you have narrated and our narration of the same. Our opinion may vary when other facts are changed or elaborated.