Libro Quinto Título VII. Del arrendamiento

Lease is the contract by which one of the parties undertakes to give the use or enjoyment of a thing for a certain time to another, who undertakes to pay for such use or enjoyment a determined price.

All non-fungible property may be the object of this contract, except those which the law prohibits from being leased and strictly personal rights.

The rent or price of the lease must consist of money or any other equivalent thing, provided that it is certain and determined.

The owner who has capacity to contract may lease property, as well as any person who by law or agreement has such authority with respect to the property he administers.

The husband requires the consent of his spouse to lease the common property of the conjugal patrimony for a time limit greater than 3 years or with advance of the rent for more than one year.

The co-owner of an undivided thing may not lease it without the consent of his co-owners.

The following may not take on lease:

1.Administrators of another person's property, the property in their charge;

2.The agent, the property of the principal, except with the express consent of the latter; and

3.Public officials and public employees, the property which is the subject of the matters in which they intervene by reason of their office.

When the same thing has been leased to two or more persons, the first contracting party shall have preference, and if the contracts are of the same date, the one who has the thing in his possession; but, if the lease must be entered in the register of property, preference shall correspond to the one who first registered his right.

The term of the lease shall be fixed by the parties.

The lessee shall have a right of first refusal for the renewal of the contract for a new term, provided that the lessee has voluntarily fulfilled all the obligations undertaken in favor of the lessor.

Upon expiration of the term of the lease, if the lessee does not return the thing and the lessor does not claim it and, instead, receives the rent for the following period without making any reservation, the contract shall be deemed extended under the same conditions, but for an indefinite term.

The extension of the contract by express or tacit will of the parties extinguishes the guarantees and securities that a third party has provided to guarantee it, unless the guarantor expressly binds himself.

In leases whose duration is counted by compulsory and voluntary years, the latter become obligatory if the opting party does not notify the other, three months in advance, that it will terminate the contract when the compulsory years end.

The clauses of the contract that are obscure or doubtful as to the duration of the lease shall be interpreted in favor of the lessee who has not been delinquent in the payment of the rent.

The lessee may sublease the leased thing in whole or in part if it has not been expressly prohibited to him, but he may not assign the contract without the express consent of the lessor.

Total or partial subleasing does not impair the rights or the obligations respectively corresponding to the lessor and the lessee, nor does it alter the guarantees constituted as security for the lease contract.

The sublessee shall not use the thing on other terms nor for other uses than those stipulated with the first lessor; and shall be liable jointly and severally with the lessee for all obligations in favor of the lessor.

Upon cessation of the lease, the subleases lapse even if their time limit has not expired; except for the right of the sublessee to demand the corresponding compensation from the lessee.

Neither party may alter the form of the leased thing without the consent of the other. Violation of this provision gives the injured party the right to demand that the thing be restored to the condition it was in previously, or that the contract be rescinded if the modification was of such importance that it impairs its fitness for the purpose of the lease.

If during the lease the lessor alienates the thing, the new owner may not refuse to maintain the lessee in the use thereof while the term of the contract has not expired.

If the lessee abandons the leased thing, the contract shall be deemed terminated and the lessor shall have the right to have it judicially delivered to him.

Leases of national, municipal, or autonomous or semi-autonomous entity property shall be subject to their respective laws and, subsidiarily, to the provisions of this Code.

The lessor is obligated to deliver the thing in a condition fit to serve the purpose of the lease.

Delivery must be made immediately if no time limit is fixed; but if the lessee must pay the rent in advance or provide security, so long as he does not comply with these obligations, the lessor shall not be obligated to deliver the thing.

The lessor who in good faith leases a thing belonging to another is released from liability if he presents to the lessee another of equal or better conditions, even if the lessee does not accept it.

If the lessee knew that the thing belonged to another and did not take care to verify the lessor's authority to enter into the contract, the lessee shall have no right to any compensation for failure to deliver or deprivation of the thing.

If the thing is destroyed before delivery, in its entirety or in such a way that it is rendered useless for the purpose of the lease, without fault of the lessor, the lessor shall have no obligation to indemnify the lessee, but shall return the rent if it had been paid in advance.

The lessor is obligated:

1°.To inform the lessee, at the time of execution of the contract, of the hidden defects of the thing and the limitations and encumbrances that may prejudice him;

2°.To maintain the lessee in the peaceful enjoyment of the thing during the lease;

3°.Not to hinder nor obstruct in any manner the use of the leased thing, except on account of urgent and indispensable repairs;

4°.To preserve the leased thing in the same condition, during the lease, making for that purpose all necessary repairs;

5°.To defend the use of the thing against a third party who claims to have or seeks to exercise any right over it; and

6°.To pay the fiscal and municipal taxes levied on the thing.

If the lessor fails to make the repairs that are necessary to prevent the destruction or deterioration of the thing, after being notified of the urgency of carrying them out, it shall be at the lessee's election to rescind the lease or to request judicial authorization to make them at his own expense. The judge, with knowledge of the merits, shall fix the maximum amount that the lessee may spend and the portion of rents or rental payments that shall be applied to payment.

The lessee is obliged to pay the rent from the day on which he receives the thing, in the time limits, form and place agreed.

In the absence of agreement, the rent shall be paid in arrears, upon presentation of the receipt signed by the lessor or his legal representative.

If the contract is rescinded or declared terminated before expiration of the time limit, or if the thing is returned after expiration of the contract, the rent shall run until the day on which it is effectively returned.

The stipulation that the lessee shall pay the totality of the rents upon return of the thing before the expiry of the term is invalid, except as provided in Article 1888.

If the lessee is prevented, without fault on his part, from the total or partial use of the leased thing, he is not obligated to pay the rent in the first case, and has the right, in the second, to a proportional reduction which, in the absence of agreement, the judge shall fix.

In both cases, if the impediment lasts more than two months, the lessee may request rescission of the contract.

The lessee is obligated:

1°.To use the thing only for the agreed use, and in the absence of an agreement, for that which corresponds according to its nature and purpose;

2°.To be liable for all damage or deterioration suffered by the leased property through his fault or that of his family members, dependents and sublessees, as well as that caused by the animals and things he keeps therein; and

3°.To return the thing, upon termination of the lease, in the condition in which it was delivered to him, except for defects inherent in the prudent use thereof.

If delivery was made by inventory, the return shall be made in accordance therewith.

The lessee who establishes a dangerous industry in the leased immovable property has the obligation to insure it against the risks arising from the exercise of such industry, being liable for the damage caused if he fails to do so.

Repairs called locative shall be borne by the lessee, but shall be borne by the lessor if the deterioration results from poor quality or defective construction of the leased thing.

Locative repairs are understood to be those which according to the custom of the place are chargeable to the lessee and, in general, those for deterioration ordinarily caused by the fault of the lessee, his family members or dependents.

The lessee is obligated to immediately notify the lessor of any usurpation or imposition of servitude attempted against the immovable property, being liable for the losses caused by such omission.

The lessee is liable for fire to the property subject to the lease, unless it results from fortuitous event, force majeure, or construction defect.

If there are several lessees, all are liable for the fire in proportion to the part they respectively occupy, unless it is proved that the fire began in the room of one of them, who in such case shall be solely liable.

The liability of the lessee ceases, in case of fire, if the thing were insured; except the right of the insurer against the lessee if the fire was caused by fault of the latter.

The lessee has the power to make in the leased thing, without altering its form, all improvements that he wishes to enjoy during the lease.

Improvements are necessary when their purpose is to prevent the destruction or deterioration of the thing.

They are useful when, without belonging to the class of necessary improvements, they increase the value and income of the thing in which they are placed.

And they are recreational when, without being necessary or useful, they serve for ornament, display, or greater comfort.

No improvement is payable to the lessee, except by written agreement in which the owner has obligated himself to pay for it.

Excepted from this provision are necessary repairs or locative repairs that are for the account of the lessor, which shall be payable if made by the lessee after notifying the former, privately or judicially, of the need for the repair.

The contract regarding payment for improvements in which there is not specified, at least approximately, what such improvements must be and what the maximum amount that the lessee may spend for such purpose shall be, is void.

The lessor may authorize the lessee to invest one or more of their rents in improving the leased thing.

The lessee may also be authorized to spend from his own funds on improvements to the thing, up to the amount stipulated.

When the lessee has made improvements with the consent of the owner, or without it, in order to enjoy them during the time of the lease and to leave them thereafter for the benefit of the property, without liability of the latter; if before the expiration of that time the lease is interrupted by cause or fault of the owner, from that moment the necessary or useful improvements become payable. In this case, the owner or whoever succeeds him in the thing shall be liable either for the entire value thereof if the lessee had not yet enjoyed them, or only for a part proportional to the time remaining under the contract if the lessee had already begun to enjoy them.

The appraisal of improvements shall be governed:

1°.By the agreement of the parties; and

2°.By what was spent in making and preserving them.

Whenever a valuation is made of improvements payable to the lessee, the value of the damage or deterioration referred to in paragraph 2 of Article 1907 shall be included therein and deducted from its amount.

If the improvements that are not to be paid for are separable, the lessee who made them may remove them.

If they are not separable, or if separation cannot be made without destroying them, the lessor may prevent them from being destroyed.

Improvements that are payable for having been made in accordance with what was lawfully agreed between the owner and the lessee shall be paid in amount, time, and manner pursuant to agreement.

Absent agreement on the manner in which payment of such improvements is to be effected, it shall be made with such amount of the rent for the last year of the lease as suffices.

When in a lease contract an amount lower than that produced by the thing is designated as rent, with the express purpose that the lessee improve it, if the latter fails to make the improvements, the lessor has the right to request rescission of the contract; the return of the amounts that were deducted from the rent, in consideration of the improvements; the interest on the sum to which such amounts amount, and compensation for the losses that may have been caused to him.

The lessor has the same rights when in any other manner an amount expressly intended for improvements is delivered to or left with the lessee, if the latter fails to comply with the obligation to improve.

If the lessee had made only a more or less considerable part of the improvements to which he was obligated, the judge shall decide, according to the circumstances, on the rescission of the contract, but there shall always be grounds for the return of the amounts that were not used for improvements, for the payment of their respective interest and for the compensation for the losses caused.

The lease terminates upon expiration of the time limit fixed in the contract or by law, or upon satisfaction of the purpose for which the thing was leased.

The lease also terminates:

1°.By express agreement;

2°.By nullity or rescission of the contract;

3°.By loss or total destruction of the leased thing; and

4°.By expropriation or eviction of the leased thing.

The lease may be rescinded:

1°.If the lessor or the lessee fail to perform their respective obligations;

2°.If, in the case of a rural property, the lessee abandons the plantations existing at the time of entering into the contract or does not cultivate them with due diligence;

3°.If, the leased thing having been delivered and the lessee being required to guarantee payment of the rent, he refuses to do so or does not do so within the agreed period;

4°.By reason of the coming of age of the minor, rehabilitation of the incapacitated person or return of the absent person, in leases entered into by their respective representatives with a term of more than three years;

5°.For subleasing against the express prohibition of the lessor;

6°.For use by the lessee of the leased thing for purposes contrary to morals or to public order or to public health; and

7°.By reason of the death of the lessee, if their heirs do not wish to continue the lease.

No house, room, or premises may be leased unless it meets the hygiene and sanitation conditions required by the respective code. The owner or lessor shall present the habitability card of the immovable property, issued by the competent public official, for the contract to be granted.

The lessor who does not carry out the works ordered by the competent authority for premises to be habitable and hygienic shall be liable for the damage and losses that the tenants occupying it suffer as a result thereof.

The current expenses occasioned by the provisions on cleanliness, salubrity and hygiene ordered by the respective authorities are to be borne by the lessee, if they do not consist of modifications or improvements which, according to the law, the lessor is required to make.

If a furnished house or premises is rented, the furniture shall be specified in the contract and the lease thereof shall be understood to be for the same term as that of the building, unless there is an agreement to the contrary.

Unless expressly stipulated, the consumption of electrical energy and telephone service, as well as water exceeding that corresponding to the immovable property or the quantity determined in the contract, shall be borne by the tenant.

Payment of the rent shall be made in the stipulated periods, and in the absence of agreement, payment shall be made for elapsed months.

The lessee shall return the house or premises at the end of the lease, in the condition in which it was delivered to him, taking into consideration the deterioration caused by lawful use and enjoyment.

As to serious deterioration of the immovable property, he shall prove that it was not caused by his fault or that of his guests, dependents or sublessees, and, failing such evidence, he shall be liable for the value of the repairs.

The lessee shall effect restitution of the building by vacating it entirely and delivering it with the keys to the lessor.

The lessee may terminate the lease by giving written notice to the lessor, at least thirty days in advance in the case of a dwelling and sixty days in advance in the case of business premises or offices, except as provided in Article 1888.

The lessor may terminate the lease in the general cases established in Article 1930 and in the following special cases:

1°.When the lessee is not current with payment of the rent and owes at least two past-due months;

2°.When the owner needs the house or dwelling to occupy it himself and his family, provided he proves this circumstance. Family includes his wife or de facto cohabitant, children, parents, or persons who depend on him economically;

3°.When the immovable property requires indispensable repairs to maintain its condition of habitability or safety, or a new building is to be constructed;

4°.When the dwelling or premises suffer deterioration through the fault of the lessee, or of his family members or dependents, that is not caused by the normal use of the immovable property;

5°.When it concerns immovable property of the State or of the municipalities that is necessary for the installation of their departments, offices or services; and

6°.When the owner needs the premises to install his business or any other lawful activity, provided he does not have another immovable property with adequate conditions for such purpose.

Upon occurrence of any of the above cases, proceedings shall be conducted in accordance with the provisions of the respective laws.

The provisions set forth in this chapter shall govern without prejudice to the provisions of the special tenancy law or other emergency law governing this contract, with respect to the fixing of rent and other conditions not determined in the preceding articles.