6.05.2019

Can An Expat Lease Land From His/Her Filipino Spouse?

Can You Lease Land From Your Filipino Spouse?




Disclaimer


This article is not legal advice and details personal opinions regarding how Philippine laws apply to a foreigner living in the Philippines. No guarantee is made about the accuracy or factual nature of any information found in this article.

Leasing Land From Your Spouse Is Not Legal


Can an expat lease land from his/her Filipino spouse? The short answer is no. 

Why would they even want to?  

The topic comes up sometimes when expats are discussing the measures they have taken to protect their investment in a house and land. Some expats believe that, although they cannot own the land, they can lease the land that the house sits upon. 

However, this is not a sound or legal way to go about attempting to secure your investment. I, as an expat, can lease land from a Filipino citizen, but not when that Filipino citizen is my own wife. 

Even a Filipino citizen cannot lease real property from their own spouse and they can only buy a property from their own spouse under two specific circumstances. 

The legal logic behind the prohibition is that a married couple is a unit and that selling or leasing a property to your spouse is like selling or leasing a property to yourself.

The law on this subject is a little complicated, as legalese tends to be. What follows is not legal advice, but only a walk-through of a layman's comprehension of how these laws apply to me.

The Civil Code of the Philippines:

Art. 1646. The persons disqualified to buy referred to in Articles 1490 and 1491, are also disqualified to become lessees of the things mentioned therein. (n)
Article 1646 refers us to Article 1490 in determining who cannot lease to whom:
Art. 1490. The husband and the wife cannot sell property to each other, except:

    (1) When a separation of property was agreed upon in the marriage settlements; or


    (2) When there has been a judicial separation or property under Article 191. (1458a)
 "The husband and the wife cannot sell property to each other," ends all debate. 

Article 1646 states that those disqualified from selling/buying under given circumstances are likewise disqualified from leasing/becoming a lessor under the same circumstances. 

The two exceptional conditions in Article 1490 lead us into the discussion of the prohibition on foreign land ownership. As you may well know, the two exceptions do not apply to a foreigner in buying land, because foreigners can not buy land. Therefore they also cannot apply to a foreigner in leasing land. 

WHAT CAN AN EXPAT DO TO PROTECT THEIR INVESTMENT

 

- Buy A Condo


An expat can have 100% ownership of a condo, since there is no land in the title. 

- Own The Building Not The Land


Maintain records of your expenses and where the cash comes from when you build your house and have your Filipino spouse sign a notarized affidavit stating that you funded the house construction.

- Rent


Rent to avoid a potential legal headache by not tying a huge chunk of your gold in an asset that you might ultimately lose.

- You Can Inherit Property From A Spouse.

 

This topic is covered in a post titled Foreigners Can Own Land In The Philippines Through Hereditary Succession.

The Bottom Line

 

You might find an attorney or someone else who tells you that they can make you a legal contract for a lease from your spouse. Do not listen to these people. They are leading you contrary to the law. They will take your money, but your contract will not hold up in court should the day ever come.

Also see Can A Foreigner Buy Land In The Philippines.

Again, this is not legal advice, but only me letting you have a window in to my thinking as I worked to understand what Philippine laws mean to me, as an expat in the Philippines.



4 comments:

Anonymous said...

I have a 25 year lease on our property and it was notarized by my wife's relative who is an attorney.

Gary M. said...

Doesn't matter who notarized it. It's still not valid or legally enforceable.

Anonymous said...

Dear Anonymous @ 18:32,

If I knew who you are talking about I would report that attorney to the Bar Association. He is incompetent and should not be practicing law.

Philippine Destiny said...

To the person whose comment is just above, the person that you are responding to might have simply been saying that he has a 25 year lease and not necessarily that it is from their spouse.

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