BIR-PEA Contract of Lease

April 27, 2001 BIR RULING [DA-075-01] MEMORANDUM FOR : Asst. Commissioner Norma L. Lipana Financial and Administrative Service FROM : Jesus C. Sandoval Chief, Law Division DATE : March 28, 2001 SUBJECT : BIR-PEA Contract of Lease Returned herewith are the Supplemental Contract of Lease With Option to Purchase for the BIR-RCC Building and the Contract of Lease With Option to Purchase for the Iloilo Regional/District Office Building with the information that the undersigned found no provision thereof that is contrary to law or to public policy. However, it is the position of the undersigned that the last phrase of Section 5 of the Contract of Lease With Option to Purchase for the Iloilo Regional/District Office Building be deleted. For easy reference we quote hereunder said provision, to wit: "5. MAINTENANCE AND REPAIRS The FIRST PARTY shall, at its expense, maintain the leased premises in a usable, clean and sanitary condition, and in good condition at all times. In its use of the leased premises, the SECOND PARTY shall comply with any and all laws, ordinances and regulations duly enforced or which may hereafter be promulgated by the proper national or local government authorities or the FIRST PARTY in supplement to the provisions of this contract." The phrase "or the FIRST PARTY in supplement to the provisions of this contract" unduly gives the PEA the power to unilaterally impose additional terms and conditions relative to the use of the property not provided for in the contract. For the protection of the BIR, any additional condition regarding the use of the leased premises shall be mutually agreed upon by the parties. A provision to this effect shall be incorporated to the Contract of Lease With Option to Purchase for the Iloilo Regional/District Office Building. (SGD.) MILAGROS V. REGALADO Acting Assistant Commissioner Legal Service