Usufruct Agreement

11/03/17 Version URS TANAY EXTENSION BUILDING

USUFRUCT AGREEMENT
URS TANAY CAMPUS EXTENSION BUILDING

KNOW ALL MEN BY THESE PRESENTS:

This Agreement is made and entered into this _______ day of ________________, 2017 by and
between:

The MUNICIPAL GOVERNMENT OF TANAY, a local government unit in the province of Rizal
duly created and existing under the laws of the Republic of the Philippines represented by its
Municipal Mayor, Hon. REX MANUEL C. TANJUATCO, hereinafter referred to as LGU,

- and -

The UNIVERSITY OF RIZAL SYSTEM, the only State University in the province of Rizal duly
created and existing by virtue of the Philippine laws, with principal office address at Tanay, Rizal
represented by its University President, Dr. MARITA R. CANAPI, hereinafter referred to as
URS,

WITNESSETH: That -

WHEREAS, the University of Rizal System (URS) is committed to promote advanced

studies and specialized trainings in all fields deemed relevant to the development goals of the
service area in Rizal province and expand its educational services by covering the needs of
professionals working in government institutions;
WHEREAS, the Municipal Government of Tanay (LGU) recognized the role of education,
productivity, economic growth, improving peoples lives, reducing poverty, and its contribution to
social cohesion shall take part in the responsibility to improve quality of education in the
municipality;
WHEREAS, the URS has offered to provide and render undergraduate and graduate
education programs during the effectivity of executed MOA, as required by the LGU, and the LGU
has accepted the aforesaid offer, subject to the construction of building/s and facilities that shall
be covered by the terms and conditions set forth in this Usufruct Agreement;
WHEREAS, the LGU has accepted the offer and shall in turn provide building or buildings,
vicinity and other future facilities as may be necessary to carry out the purposes of URS for the
constituencies of the LGU, and that shall be covered by the terms and conditions set forth in this
Usufruct Agreement;
NOW, THEREFORE, for and in consideration of the foregoing premises, and by mutual
agreement and stipulation, hereinafter set forth, the URS and the LGU have agreed on the
following terms and conditions, to wit:

I. Description of Usufruct Subject hereof:

(See ANNEX A Usufruct Building and Property)

II. Duties and Responsibilities of LGU

a. Build and own a 2 story- ____ classrooms school building with an area of approximately
____ square meters inside the _________ square meters land located in the Tanay
National Government Complex;
b. Agrees to grant the URS the usufruct of the building which includes the possession, use
and enjoyment thereof, as well as the right to manage the same;
c. Provide insurance annual premium to cover loss or damage to the building and equipment
installed therein due to but not limited to fire, theft, flood, earthquake or other causes;
d. Guarantees to finish and clear up the exterior environment of the school building, including
fencing, entry path, landscape and lawns;

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e. Provide immovable fixtures and fittings (including but not limited to air conditioning unit(s)
for the faculty room, utilities and internet cabling);
f. Responsible for the maintenance of the immovable fixtures such as but not limited to air
conditioning unit(s);
g. Promptly pay when due all charges for water, electricity, and all other utilities furnished to
or used upon the premises starting from the date of occupancy for one (1) year from the
effectivity date of this Agreement
h. Undertake all of the security services, cleaning, daily-use maintenance of the fittings and
other property management work, and bear related expenses thereof;
i. Take charge of all the installation charges for the utilities, water and electric connections,
of the school building prior occupancy;
j. Have the right to inspect the premises at any reasonable hour of the day on a quarterly
basis;
k. Make all necessary capital repairs, replacements and improvements to the premises and
the school building; and
l. It shall bear any and all expenses, costs and liabilities in suits brought with regard to the
use of the usufruct building;

III. Duties and Responsibilities of the URS

a. Acknowledge in writing the receipt of the building from LGU;
a. Occupy and use at no cost on rentals the premises for educational purposes and those
activities strictly and directly related to it;
b. Submit to LGU its Manual of Operations and names of authorized representatives to
manage the building and shall transact with LGU relative to its operations;
c. Take as much care thereof as a good father of a family or as a person of ordinary prudence
would take care of his own property;
e. Prohibit the use the building for any purpose other than for which it is intended purpose/s;
f. Operate, perform minimal repair and maintain, and ensure safekeeping of the building
including responsible property custodianship and turn over the above to LGU in the event
that compliance to the stipulations in the Manual of Operations or this Usufruct Agreement
can no longer be achieved;
g. Keep the structures of the building unaltered, and shall undertake ordinary maintenance
and petty repairs. By ordinary repairs are understood such as are required by the wear
and tear due to the natural use of the thing and are indispensable for its preservation;
h. It shall notify LGU of the need to carry out extraordinary/major repairs on the subject
building;
c. Responsible for all movable fixtures and fittings (including, for example, computers, tables,
chairs, blackboards);
d. Prevent storing hazardous materials inside the school premises;
e. Notify in writing the LGU if URS needs to redecorate or renovate the building;
f. Notify the LGU promptly of any material damage to the building;
g. Indemnify LGU for any deterioration of the building may have suffered by reason of its own
fraud or negligence, unless the LGU transfers the ownership thereof, with the prior
concurrence of COA;
h. Notify LGU of any act of a third person, of which s/he may have knowledge, that may be
prejudicial to the rights of ownership, otherwise it shall be liable for damages, as if they
had been caused through its own fault; and
i. Submit periodically to the LGU reports of physical status of the building.

IV. Common Duties and Responsibilities

a. Both parties hereby undertake to abide by existing and applicable DBM and COA
rules/circulars relative to actions or transactions involving the Usufruct.
b. Recognize and respect each others respective rights, duties and responsibilities under
this Agreement.

V. Period of Usufruct

Such usufruct rights shall remain enforceable within twenty-five (25) years from the date
of signing of this Agreement by the parties hereto.

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This Agreement may be automatically extended upon written agreement of both parties in
public instrument.

VI. Breach of Agreement

In case of breach hereof by one party, the other party has the right to terminate the
contract. If the breach is committed by the URS, LGU has the right to terminate the MOA
and usufruct over the building and to consequently repossess the property or compel
withdrawal of URS from the building observing smooth transition in consideration of the
conduct of academic activities of URS.

VII. Extinguishment of Usufruct

The Usufruct may be extinguished upon prior reasonable notice, as follows:

a. By the expiration of the period for which it was constituted or by the fulfilment of any
resolutory condition;
b. By merger of the usufruct and ownership in the same person/institution;
c. By renunciation of URS usufruct right;
d. By the total loss of the building/property in usufruct;
e. By the termination of the right of the URS constituting the usufruct;

VIII. Effect of Termination or Extinguishment of Usufruct

a. The building shall be appraised to determine its depreciated value or residual value for
purposes of transfer, sale or disposal by the LGU. A depreciation schedule for said building
shall be provided for and form as integral part of the MOA, exhibited thereof as Annex B
Building Depreciation Schedule.

b. The LGU may transfer the building to URS or other entity.

c. In case the preferred mode of transfer of the building at the end of the usufruct agreement
is through sale, the depreciated value or residual value of the machinery/equipment may
be used as the basis for the sale in accordance with COA rules and regulations.

IX. Arbitration Clause

Any dispute that may arise relative to the execution of this Agreement shall be brought to
the Management Committees of both LGU and URS. Otherwise, the parties (LGU and
URS) shall resort to the alternative modes of dispute resolution pursuant to Republic Act
9825 (Alternative Dispute Resolution Law).

X. Implementing Rules and Regulations

The Implementing Rules and Regulations (IRR) may be promulgated by both parties to
provide policies, rules, regulations and procedures to implement this Agreement, leading
to a more systematic and orderly administration and supervision of this Usufruct.

XI. Effectivity

This Agreement shall take effect upon signing hereof.

IN WITNESS WHEREOF, the parties have hereunto set their hands this _____ day of
__________, 2017.

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For the LGU: For the URS:

By: By:

Hon. REX MANUEL C. TANJUATCO Dr. MARITA R. CANAPI

Municipal Mayor President
University of Rizal System

SIGNED IN THE PRESENCE OF:

On the part of URS:

Dr. FE D. BATOON Dr. FLORDELIZA R. PENARANDA

Campus Director Vice-President for Academic Affairs
University of Rizal System Tanay

On the part of LGU:

_____________________________ _____________________________
Chairman, Committee on Education Vice Mayor, Municipality of Tanay
Municipality of Tanay
------------------------------------------------------------------------------------------------------------------------------------------

ACKNOWLEDGMENT

Republic of the Philippines )

Province of Rizal ) S.S.

BEFORE ME, a Notary Public for and in _________________, this _ day of _____________
2017.

Personally came and appeared the following:

NAME Valid ID Place/Date Issued

______________________ __________________ _______________________
______________________ __________________ _______________________
______________________ __________________ _______________________
______________________ __________________ _______________________
______________________ __________________ _______________________
______________________ __________________ _______________________

Known to me and to me known to be the same persons who executed the foregoing instrument;
which instrument consist of four (4) pages including this page where the Acknowledgement is
contained and acknowledged to me that the same is their free and voluntary act and deed.

WITNESS MY HAND SEAL.

Doc. No. ________;

Page No. ________;
Book No. ________;
Series of 2017.

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