Sunvar Case: Honoring the Long-Term Lease Agreement

Sunvar Realty Development Corp., or simply Sunvar, faced a government bid for ejection because of alleged illegal occupancy of Mile Long, a 2.9-hectare property located in Legaspi Village, particularly in De la Rosa Street and Arnaiz Avenue in Makati City. Not to mention, the government is only reclaiming Mile Long and not the entire 12-hectare government property.

On that note, Sunvar firmly reiterates that it is occupying the said property legally. According to Alma D. Fernandez-Mallonga, legal representative to Sunvar, “The terms and conditions upon which Sunvar occupies the property belie the allegations and insinuations that the corporation is squatting on Mile Long.”

Further along, the accusation of illegally occupying the property since 2003 thereby is a mischaracterization to the extent of calling it the “Philippine Daily Squatter,” an allusion to Philippine Daily Inquirer, Sunvar’s sister company. The broadsheet, on the other hand, was also perceived to be critical of President Rodrigo Duterte and his governance.

Rent paid in advance

In 1982, Sunvar paid Php17 million in advance rentals upon leasing the property. The property was also leased at a time when economic and political uncertainties abound the country. However, the corporation took risks in developing the area, which at the time, has no utilities and no access to the main road. The informal settlers also occupied it during that period.

Mallonga continues that the lease was not made as a ‘sweetheart’ deal. The price per square meter was Php733, which means that the government was not at a losing end because the amount of developed lots with infrastructure nearby was Php1,000 per square meter. And Sunvar paid for the entire 2.9-hectare property’s rental up to 2027. Hence, the accusation that the corporation has unpaid rents amounting to Php1.656 billion owed to the government is not true.

The emphasis is on the legal process that occurred between Sunvar and TRCFI (Technology Resource Center Foundation Inc.). The entire lease period was nearly 25 years, and the former exercised its full right to extend the lease for 25 years more. TRCFI was already dissolved.

TRCFI leased the said property from the National Power Corp. (NAPOCOR) and the government back in December 1977. Sunvar was only interested in subleasing the 3,000 square meters, but TRCFI insisted the corporation to sub-lease the 22,924 square meters of undeveloped property instead.

Before the expiration of the first sub-lease period, Sunvar notified NAPOCOR, the government and the Philippine Development Alternatives Foundation (PDAF), which now assumes the responsibilities of TRCFI. Payment has been exchanged for the rental of the property for the extended period.

The government, on the other hand, mandated NAPOCOR to privatize all its assets and thus, informed PDAF that the sub-lease should not be renewed. PDAF informed Sunvar. Sunvar, knowing its rights based on the lease term agreement to exercise its exclusive option, responded that the government must honor the said agreement.

See also: Sunvar Case: The Actual Facts