Short answer. It depends on the extent of the destruction and whether the fire was a fortuitous event. If the unit was totally destroyed by a fortuitous event, the Civil Code extinguishes the lease outright. If the destruction was only partial, you may instead choose a proportional rent reduction or rescission of the lease.
What the law says
If the thing leased is totally destroyed by a fortuitous event, the lease is extinguished. If the destruction is partial, the lessee may choose between a proportional reduction of the rent and a rescission of the lease.
Civil Code, Article 1655 — Destruction of the Thing Leased. Read the full provision →
Total destruction ends the lease outright
Article 1655 states plainly: if the thing leased is totally destroyed by a fortuitous event, the lease is extinguished. If your unit was completely destroyed and the fire qualifies as a fortuitous event, the lease itself comes to an end by operation of this article. An extinguished lease does not continue to generate rent obligations going forward, since the article ties extinguishment directly to total destruction of the leased premises.
Partial destruction gives you a choice, not an automatic end
Where the destruction is only partial, the article gives the tenant an option rather than an automatic termination: the lessee may choose between a proportional reduction of the rent and a rescission of the lease. You are the one who selects between staying in a reduced-rent arrangement or ending the lease altogether — the article places that choice with the lessee, not the lessor, when destruction falls short of total.
Why "fortuitous event" is not a detail to skip
The article's rule for total destruction is tied to the fire being a fortuitous event — something outside anyone's fault or control. If the fire was instead caused by the negligence of the landlord, the tenant, or some other identifiable fault, that changes the picture from what this article describes, since the article's specific rule is written around destruction that happens without anyone being to blame for it. Where fault is involved, the consequences would need to be worked out under different rules than this one.
What to establish first
Before assuming either outcome, the two facts that matter under this article are how much of the unit was actually destroyed and what caused the fire. Total loss from an accidental fire points toward the lease ending under the article's first sentence; partial damage points toward your choice between reduced rent and rescission under the second. A fire investigation report, if one exists, is often the clearest record of both the cause and the extent of the damage.
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.
- Bayview Hotel, Inc. vs. Court of Appeals, et al, G.R. No. 119337, June 17, 1997 — read the decision on LawPhil →