Registry of Ownership of Leasehold Rights August 28, 2009
Ground Floor, FSC Building,
corner, Causeway Road, Subic Bay Freeport Zone
Attention Att. Ma. Leonora R. Tabladillo, Officer in Charge
Re: Certificate of Ownership of Leasehold Rights
Dear Attorney Tabladillo:
I am writing you to express my observations, comments and feelings regarding the
meeting of August 25, 2009 held at the Subic Bay Exhibition and Convention Center
at the Subic Bay Gateway Park where the discussions centered on SBMA
implementing mandatory (new) rules for the registration of Certificates of Leasehold
Rights.
New rules that have apparently been conceptualized, crafted, developed and
implemented behind closed doors with no input or observations from the people
directly effected as a result.
My name is
Philippines by virtue of the Philippine Retirement Authority of which myself and
many others have invested a substantial amount of money, and currently living within
the Freeport Zone.
Suffice it to say that, like so many others, I found living in the Freeport Zone to be
preferable to other areas for any number of reasons. Those reasons, at the time, were
positive and compelling enough to offset the higher cost of lease ownership within the
Freeport Zone as compared to elsewhere in the Philippines or even Asia. Those other
options are being now evaluated by myself and, no doubt, others as well.
The Long Term Lease concept has been, for me, an acceptable alternative to
purchasing real estate elsewhere however, as in any business transaction, there comes
a point of diminishing return; I believe that point, for me, has arrived.
There are many things for a retiree to consider when choosing where to live; location,
cost, ongoing expenses, anticipated future expenses, upkeep of the property are some
examples. Obviously, those expenses can have a dramatic impact on quality of life
when one is a retiree and living on a limited and fixed income.
I’m quite confident that people who have made the decision to live within the
Freeport, based their decisions on not only the initial costs and their affordability but
the down stream costs which can be anticipated in properly maintaining a home
It comes as quite a shock to me to learn that my rights as a leaseholder are apparently
now in jeopardy to the extent that a Certificate of Leasehold Rights is now required
for my protection and, ostensibly, to somehow improve, the market value of the lease.
With all due respect, I find the rationale behind the New Rule of “Certificate of
Ownership of Leasehold Rights” to be a misnomer and an oxymoron. As a
leaseholder, our only right is to occupy the aforementioned property for a given
period of time based upon the life of the duly and legally executed lease agreement
between the lessor and lessee, in this case being SBMA.
To arbitrarily and unilaterally change / amend the terms and conditions of the lease,
after the fact, would to me, be ignoring the leaseholders legal rights as currently stated.
It begs the question if rules and regulations regarding the lease can be arbitrarily and
unilaterally changed; what other kinds of changes can one anticipate in the future?
In the presentation, there were attempted analogies made to the tax situation in non-
SBMA real estate (off base); e.g. Capital Gains, real estate taxes and registration fees.
I submit, these comparisons are not analogous as they represent real property within
the real estate market outside of the Freeport Zone.
There is no real property in question here as obviously the property in question belongs to SBMA as the leaser, moreover, this is a Freeport Zone and as such, exempt from taxes.
Moreover, the subject at hand is not real estate, it is a lease, a long term lease that was expected to be honored for the stated number of years under the terms and conditions stated in the lease at the time of signature(s). To change the terms and conditions of obtaining and maintaining a lease after the fact is a blatant disregard for the current leaseholders’ rights as defined in the current lease and could possibly be subject to further legal opinion and action.
During the presentation, there were numerous questions raised regarding fees,
requirements, documents and responsibilities.
It would appear that these “fees” are not actually fees at all but in reality a surcharge to the leaseholder based on current market values, lease values and property sizes. It is indeed intriguing that SBMA has elected to revisit the lease values after the fact. It would seem more appropriate to re evaluate those fees upon negotiation of new leases rather that create a post method of compensation for erosion of market value or improvement of revenue.
It would further appear that, based on the responses to the questions posed during the presentation, there remain areas that have not been considered fully in this dictum and require further examination, hence it may be appropriate to table this action pending further review and consideration of all circumstances.
One example is survey of the lot; there appears to be no definition of what a lot is. One could assume that based upon the presentation and the numbers cited therein, a lot is the piece of ground the dwelling occupies.
There are two incontrovertible facts at hand; 1) The current lease explicitly addresses surveys and who the responsible party is (Landlord, SBMA) in Section 2 of the lease and 2) the area of the leasor responsibility.
While it may indeed be semantics, there is no reference to a “lot”, a definition which is generally used to describe a parcel of land. We are not leasing land here, we are leasing a residence. The responsibility for obtaining and subsequent expense of a survey, if in fact a survey is required, is by contract a responsibility of the landlord.
The concept of a “Certificate of Ownership of Leasehold Rights” may seem an appropriate tool to satisfy SBMA’s administrative needs however, there appears no logical or rational reason to further burden the stakeholders within the Freeport Zone except as a tool to generate more revenue.
Insofar as benefits are concerned, the obvious is a net increase in the rents/lease revenues SBMA will enjoy as a result of these increased costs to the leaseholders; costs over and above those which have already been paid to SBMA solely for the benefit of leasing the property.
In other words, if I may, our leasing costs have just been increased over that which we have agreed to with either SBMA or a previous leaseholder; moreover, we have not been given the opportunity to make a decision of our own regarding perpetuating the lease under these new terms.
I may be new in the Freeport Zone, in comparison to other residents of SBMA however, I am not new to the concept of negotiations and agreements to which I become a legal part.
Contracts require the written agreement and consent of two or more legal aged parties. The Lease Contract I currently have has gone through the detailed procedure required by SBMA, unlike most lease agreements and, has passed the SBMA Board of Directors approval with a Consent to Assignment and only then is signed by me and a senior legal representative of SBMA. It’s not unreasonable to expect the terms and conditions of a contract to be honored and where an amendment may be desired by either party, it too should be by mutual agreement and consent.
It is precisely these kinds of dictatorial and unilateral actions that impact decisions of people considering retirement in the Freeport Zone. I’m confident that Special Retirement Resident Visa and potential SRRV Visa holders will consider this style of administrative rule making a negative and affect the selection process of where to live.
In closing, I would like to reiterate, my surprise and disappointment in the crafting and hasty implementation of a rule so obviously designed to generate revenue at the expense of people who live here and do their best to make this a great place, be it work or retire.
Respectfully Submitted,
cc: Mr. Armand Arreza, Administrator and CEO, SBMA
cc: Philippine Retirement Authority
cc: SBFCC
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