REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 9422

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

EXPLANATORY NOTE

Republic Act No. 7652 otherwise known as the "Foreign Investor Long-Term Lease Act” allows
the long term lease of private lands by foreign investors of up to a maximum period of 75 years
but requires them to register with the Department of Trade and Industry. Under the present laws,
foreign investors may lease private lands for 50 years renewable to another 25 years for the
establishment of industrial estates, factories, assembly of processing plants, agro-industrial
enterprises, land development for industrial or commercial use, tourism, and other similar
priority productive endeavors, while at the same time protecting agriculture.

However, the aforesaid law covers only foreign investors thereby discouraging other foreigners
from leasing properties. Moreover, the law still refers to Presidential Decree No.471 in fixing the
period for the duration of leases of private lands for foreigners. This causes confusion and lack of
uniformity, making the potential of investing in our real estate rather unappealing.

The 1987 Constitution already allows foreigners to enter into long term leases over private lands
and real estate. There is, however, a pressing need to streamline and simplify the existing policy
on the lease of these properties to aliens.
This bill is an attempt to simplify leases by foreigners of private lands and real estate and to
extend the maximum period of lease to 80 years, in order to effectively encourage investments in
all kinds of private lands and real estate.

In view of the foregoing, the immediate approval of this bill is earnestly sought.


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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

5422

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

AN ACT
STRENGTHENING THE RIGHTS OF FOREIGNERS TO LEASE PRIVATE LANDS,
AND FOR OTHER PURPOSE

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION I. Title. This Act shall be known as "The Foreigners’ Lease Act of 2017."

SEC. 2. Declaration of Policy. — \t is hereby declared the policy of the State to
encourage foreign investments in the real estate industry consistent with the mandate of the
Constitution. Toward this end, the State hereby adopts a flexible and dynamic policy on the
granting of long-term lease of private lands to foreigners for the establishment and development
of industrial estates, agro-industrial enterprises, factories, processing plants, buildings, and for
other industrial, commercial or residential purposes.

SEC. 3. Lease Period. — Any person, natural or juridical, who is not a citizen of the
Philippines shall be allowed to lease private lands in accordance with the laws of the Republic of
the Philippines, subject to the following conditions:

1. No lease period shall be for a period exceeding eighty (80) years,

2. If the lease is for the purpose of building a residential or office condominium, the
lease contract can provide for a period not exceeding ninety-nine (99) years; and

3. The lease contract shall be registered with the proper Registry of Deeds and annotated
‘on the title to the land. There shall be no other requirement for the validity and
effectivity of the lease contract.

The leasehold acquired under a lease contract entered into pursuant to this Act may be
sold, transferred, or assigned by the lessee. To bind third persons, the said sale, transfer or
assignment must be registered with the proper Registry of Deeds

SEC. 4. Penal Provision. — Any contract or agreement made or executed in violation of
any of the following prohibited acts shall be declared null and void ab initio and the contracting
parties shall be punished by a fine of not less than one hundred thousand pesos (P 100,000.00)
and not more than one million pesos (P 1,000,000.00), or imprisonment of six (6) months to six
(6) years, or both, at the discretion of the court, to wit:


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1. Any provision in the lease agreement stipulating a lease period in excess of that
provided in the paragraph (1) or (2) of Section 3; or

2. Use of the leased premises for a purpose contrary to existing laws, public order,
public policy, morals, or good customs

Provided that, in the case of corporations, associations, or partnerships, the president,
managing director, manager, director, trustee, or officers responsible for the violation hereof
shall bear the criminal responsibility.

SEC. 5. Repealing Clause. - Presidential Decree No. 471 and Republic Act No. 7652 are
hereby repealed upon the effectivity of this Act. All other laws, decrees, orders or other issuances
inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SEC. 6. Separability Clause. - If, for any reason, any section or provision of this Act is
declared unconstitutional, or invalid, the other sections and provisions, which are not affected by
it, shall continue to be in full force and effect.

SEC. 7. Effectivity Clause. - This Act shall take effect after fifteen (15) days from its

publication in the Official Gazette or in two (2) national newspapers of general circulation,

Approved,