The Supreme Court has affirmed that landlords have the right to evict tenants for failure to pay rent and upon expiration of a lease contract, ensuring property owners can regain possession when agreements are breached. This decision underscores the importance of adhering to lease terms and respecting landlords’ rights to their property, providing a clear legal pathway for landlords to address non-compliance and reclaim their premises.

Eviction Showdown: Can a Landlord Terminate a Lease Due to Unpaid Rent and Contract Expiration?

In Tristan Lopez as Attorney-in-Fact of Leticia and Cecilia Lopez v. Leticia R. Fajardo, the central conflict revolved around the ejectment of a tenant, Leticia Fajardo, from an apartment owned by Leticia and Cecilia Lopez. The case began when the Lopez sisters, through their attorney-in-fact Tristan Lopez, sought to evict Fajardo based on two primary grounds: failure to pay rent and the expiration of their lease agreement. Initially, Fajardo had a verbal lease agreement with the previous owners, the Sobrepenas. After the Lopez sisters acquired the property, disputes arose regarding the validity of the sale and Fajardo’s rental obligations.

The legal battle intensified after a previous ejectment case was settled amicably, only for Fajardo to later challenge the property sale in court and subsequently fail to pay rent for multiple months. Lopez, acting on behalf of his aunts, then issued a notice to terminate the lease, citing both the unpaid rent and the expiration of the lease term. This action led to a second ejectment complaint, which worked its way through the Metropolitan Trial Court (MeTC), the Regional Trial Court (RTC), and ultimately the Court of Appeals (CA). The MeTC and RTC both ruled in favor of Lopez, but the CA reversed these decisions, leading to the present appeal before the Supreme Court. At the heart of the dispute lay the interpretation and application of Batas Pambansa Blg. 877, also known as the Rent Control Law, and the provisions of the Civil Code concerning lease agreements.

The Supreme Court addressed the issue of whether Lopez had established valid grounds for Fajardo’s ejectment, emphasizing the two key arguments: arrears in rent payments and the expiration of the lease contract. The Court referred to Section 5 of Batas Pambansa Blg. 877, which explicitly outlines the grounds for judicial ejectment, including:

SECTION 5. Grounds for Judicial Ejectment. – Ejectment shall be allowed on the following grounds:

(a) Assignment of lease or subleasing of residential units in whole or in part, including the acceptance of boarders or bedspacers, without the written consent of the owner/ lessor.

(b) Arrears in payment of rent for a total of three (3) months: Provided, That in case of refusal by the lessor to accept payment of the rental agreed upon, the lessee may either deposit, by way of consignation, the amount in court, or with the city or municipal treasurer, as the case may be, or in a bank in the name of and with notice to the lessor, within one month after the refusal of the lessor to accept payment.

(f) Expiration of the period of the lease contract.

The Court found that Fajardo had indeed failed to pay rent for three months, thus meeting the requirement under the Rent Control Law. While Fajardo attempted to remit a check covering several months of rent, including advance payments, Lopez rightfully declined it, clarifying that only the outstanding dues for July, August, and September 2000 were applicable. Moreover, the Court also supported the claim that the lease had expired, stating that when there is no fixed period agreed upon, and the rent is paid monthly, the lease is understood to be from month to month according to Article 1687 of the Civil Code.

Building on this principle, the Court highlighted that a month-to-month lease is considered a lease with a definite period that expires after the last day of each month, provided proper notice is given. Since Lopez had sent a letter on August 18, 2000, informing Fajardo of the termination of the lease by the end of that month, he had acted within his rights. The appellate court’s decision to focus solely on the arrearages and ignore the expiration of the lease was deemed an error. Therefore, the Supreme Court concluded that there were sufficient legal grounds to justify Fajardo’s ejectment.

FAQs

What were the main reasons for the ejectment case?	The ejectment case was primarily based on two grounds: the tenant’s failure to pay rent for three months and the expiration of the month-to-month lease contract.
How did the Court of Appeals rule on the case?	The Court of Appeals reversed the lower courts’ decisions, focusing on the fact that the tenant had only incurred two months of back rentals when the demand to vacate was issued, deeming the ejectment case premature.
What does the Rent Control Law (Batas Pambansa Blg. 877) say about ejectment?	The Rent Control Law specifies grounds for judicial ejectment, including arrears in rent payments for a total of three months and the expiration of the lease contract.
What is the significance of a month-to-month lease?	A month-to-month lease, according to Article 1687 of the Civil Code, is considered a lease with a definite period that expires at the end of each month, provided proper notice to vacate is given.
What role did the letter of August 18, 2000, play in the case?	This letter served as a formal notice to the tenant that the lease would be terminated at the end of the month, thus supporting the claim that the lease had expired and was a valid ground for ejectment.
How did the Supreme Court interpret the arrears in rental payments?	The Supreme Court emphasized that despite the tenant’s attempt to pay with a check, the landlord rightfully declined it because it included advance payments. The tenant had failed to pay the outstanding rent for July, August, and September, justifying the ejectment.
What was the final ruling of the Supreme Court?	The Supreme Court granted the petition, setting aside the Court of Appeals’ decision and reinstating the decision of the Metropolitan Trial Court, which had ordered the tenant’s ejectment.
What legal article governs a month-to-month lease agreement when there is no fixed agreement?	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.

This case serves as a crucial reminder for both landlords and tenants about the importance of adhering to the terms of a lease agreement. Landlords are afforded protection when tenants fail to meet their rental obligations or when lease periods expire, provided proper notice is given. It also highlights that the courts will carefully consider all aspects of the case when deciding on eviction, ensuring fair treatment under the law.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Lopez v. Fajardo, G.R. No. 157971, August 31, 2005