Direct liability of sublessor to lessor

In the Philippines, even though the sublessee is not a direct party to the contract between the lessor and the lessee, the sublessee still bears direct liability to the lessor for actions related to the use and preservation of the leased property. Specifically:

• Use and Preservation: The sublessee must adhere to the terms stipulated between the lessor and the lessee regarding the use and maintenance of the property. If the sublessee fails to do so, the lessor can take legal action directly against them.

• Exception to the Rule: While the general rule in contracts states that the sublessee can only be held liable directly to the sublessor, Article 1651 of the Civil Code provides an exception. The lessor may bring an action directly against the sublessee if they do not use and preserve the leased property in accordance with the agreement or the nature of the property.

• Rent Obligations: Additionally, the sublessee is subsidiarily liable to the lessor for any rent due from the lessee. However, this liability is limited to the amount of rent owed by the sublessee according to the terms of the sublease at the time of the lessor’s extra-judicial demand.

In summary, the sublessee has both direct liability to the lessor for property-related matters and subsidiary liability for rent obligations.

Source: Ziggurat Real Estate Corp.

New property valuation law to boost LGU coffers but may raise real estate prices

Finance Secretary Ralph G. Recto praised the new Real Property Valuation and Assessment Reform Act (RA 12001), signed into law by President Ferdinand R. Marcos, Jr. on June 13, 2024, as a significant advancement for the Philippines’ property valuation system.

The law aims to establish a just, equitable, and efficient real property valuation system, enhancing financial self-sufficiency among local government units (LGUs).

“With this milestone DOF priority bill, we are finally fixing the long-outdated system for property valuation in the country and putting an end to inconsistent and unjust costs that hinder our local governments from delivering fast and reliable public service,” Recto stated.

He added, “We can expect our LGUs to be adequately funded and more equipped to attend to the needs of their constituents. Investors and landowners alike can expect one hundred percent transparency and accuracy in the valuation of their properties with this new law.”

The new legislation introduces a single valuation system for real properties aligned with international standards, ensuring consistency and transparency in both local and national taxation processes.

The reform is expected to professionalize assessors and separate technical valuation from the political aspects of taxation, addressing issues of overregulation and overlapping policies.

To standardize property valuation, RA 12001 employs the Philippine Valuation Standards (PVS), based on the International Valuation Standards (IVS).

The implementation includes developing an electronic Real Property Information System (RPIS), a comprehensive database for all real property transactions. This system will transmit data to the Bureau of Local Government Finance (BLGF) to aid in preparing the Schedule of Market Values (SMVs).

Additionally, the law establishes the Real Property Tax Administration Fund (RPTAF) to update SMVs, revise real property assessments, and manage property taxes across all LGUs. The BLGF will oversee the development and maintenance of PVS.

Furthermore, a real property tax amnesty covering penalties, surcharges, and interests from unpaid real property taxes is available for two years post-enactment. The provision aims to encourage compliance and provide financial relief to property owners.

The law is also designed to improve tax collection without increasing tax rates by expanding the tax base.

Updated property values will lead to higher property tax revenues, enabling LGUs to fund better services and infrastructure projects, potentially making urban areas more attractive for investment and living.

While the law promises enhanced funding and service delivery for LGUs, there are concerns that the new valuation system might lead to increased real estate prices, particularly in urban areas.

By standardizing property valuations and making them more transparent, the reform is expected to increase property values, particularly in cities.

More accurate valuations could lead to higher assessed values, which in turn could drive up market prices as property assessments become more aligned with market realities.

The new law is poised to foster investor confidence, increase public trust in the government’s valuation system, and improve LGU revenue generation, enabling them to meet their service delivery requirements effectively.

Source: Daily Guardian

Permanent validity of certificates of live birth, death and marriage

Section 3 of Republic Act (RA) 11909, otherwise known as the Permanent Validity of the Certificates of Live Birth, Death, and Marriage Act, states the following:

"Sec. 3. Permanent Validity. – The certificates of live birth, death, and marriage issued, signed, certified, or authenticated by the PSA and its predecessor, the NSO, and the local civil registries shall have permanent validity regardless of the date of issuance and shall be recognized and accepted in all government or private transactions or services requiring submission thereof, as proof of identity and legal status of a person xxx."

According to the above-mentioned law, civil registry documents (i.e., birth, death and marriage certificates), regardless of the date of issuance, shall now have permanent validity. It further states that these documents shall also be recognized and accepted in all government or private transactions or services requiring submission thereof, provided that they remain readable and contain the authenticity and security features without prejudice to administrative or judicial corrections that may be conducted pursuant to other laws.

Further, Section 5 of the same Act states:

"Sec. 5. Prohibition Against Requiring a New Copy of a Certificate. – National government agencies and instrumentalities, government-owned and -controlled corporations, local government units, private companies, private and public educational institutions, and other nongovernment entities are prohibited from requiring the submission of another or newer copies of certificates of live birth, death, or marriage, and reports of birth, death, or marriage when a valid certificate can already be presented."

Following the above-mentioned provision, government and private entities are prohibited from requiring the submission of another copy or newer copies of civil registry documents when a valid certificate can already be presented.

Certificates of live birth, death, and marriage, once issued, signed, certified or authenticated by the PSA, the NSO or local civil registries, shall have permanent validity regardless of their date of issuance.

These certificates must be recognized and accepted in all government and private transactions or services requiring their submission as proof of identity and legal status, thereby prohibiting these agencies or offices from asking for or requiring the submission of newer or other copies of the said civil registry records.

Source: Manila Times