Short answer. Yes, but with a timing limit. Article 2127 says a real estate mortgage extends to the rents or income of the property — but specifically those not yet received when the obligation becomes due. Rents the owner already collected before that point are not caught; future and uncollected rents fall within the mortgage.
What the law says
The mortgage extends to the natural accessions, to the improvements, growing fruits, and the rents or income not yet received when the obligation becomes due
Civil Code, Article 2127 — Extent of the Mortgage. Read the full provision →
Rents and income are within the mortgage
A real estate mortgage covers more than the land and building. Article 2127 lists what it reaches, including the property's fruits and earnings: the mortgage extends to the natural accessions, to the improvements, growing fruits, and the rents or income not yet received when the obligation becomes due. So the rental stream a property generates is not automatically separate from the mortgage. If the mortgaged property is leased out, the rents it produces can fall within the security the mortgagee holds, alongside the land itself and whatever is built or grown on it.
The crucial timing limit
The coverage of rents is not unlimited; it has a cut-off built into the words. The mortgage reaches rents or income not yet received when the obligation becomes due. This draws a line at the moment the secured obligation matures. Rents that the owner had already collected and received before that point are treated as the owner's own; they are not swept into the mortgage. It is the rents still outstanding or accruing at maturity — the uncollected income — that the mortgage catches. So timing, not merely the existence of rent, decides what the mortgagee can reach.
Possession does not change the rule
The article adds that its reach holds whether the estate remains in the possession of the mortgagor, or it passes into the hands of a third person. This means the extension to rents and the other items is not defeated simply by transferring the property or by who happens to hold it. The mortgage's coverage travels with the property. A buyer who takes mortgaged property, or a mortgagor who stays in possession and continues collecting rent, is subject to the same rule about which rents fall within the security.
What this means for a mortgagor
If you have mortgaged income-producing property, understand that the rents are not entirely beyond the lender's reach. Up to maturity you generally deal with the rents as owner, but the uncollected income at the point the obligation falls due, together with improvements and accessions, forms part of what secures the debt — all with the declarations, amplifications and limitations established by law. Reading the mortgage contract matters too, since parties often spell out how rents are to be treated, especially on default, within the bounds the Code allows.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Philippine National Bank vs. Sps. Bernard and Cresencia Marañon, G.R. No. 189316, July 1, 2013 — read the decision on LawPhil →
- Midway Maritime and Technological Foundation, represented by its Chairman/President PhD in Education, Dr. Sabino M. Manglicmot vs. Marissa E. Castro, et al, G.R. No. 189061, August 6, 2014 — read the decision on LawPhil →
- Star Two (SPV-AMC), Inc. vs. Paper City Corporation of the Philippines, G.R. No. 169211, March 6, 2013 — read the decision on LawPhil →
- Bienvenido C. Teoco, et al. vs. Metropolitan Bank and Trust Co, G.R. No. 162333, December 23, 2008 — read the decision on LawPhil →