LTO MEMORANDUM CIRCULAR NO. 95-222

: As a general rule, lease agreements between lessor and lessee need not be recorded with the LTO to be valid between the contracting parties.
: The phrase is indicated to notify third parties of the existing lease agreement and to protect the interest or lien of leasing and financing companies over the motor vehicle.
: They must be recorded in the Bureau (LTO) to be valid against third parties.
: Voluntary encumbrances refer to voluntary transactions or encumbrances on motor vehicles that must be properly recorded on the face of all outstanding copies of the certificate of registration of the vehicle concerned.
: The registration of motor vehicles under lease agreements is considered a voluntary encumbrance and the Certificate of Registration (CR) is issued with the notation "LEASED TO _______."
: An amount of P100.00 shall be collected for every annotation or cancellation of the lease agreement.
: The Memorandum Circular took effect immediately upon adoption, that is, October 12, 1995.
: Brig. Gen. Manuel F. Bruan, AFP (Ret.), Assistant Secretary, signed the Memorandum Circular.
: Registering the lease agreement serves as a notice to third parties of the lease and protects the lessor's or lessee's interest or lien against third parties.
: No, it is not mandatory for validity between the parties, but recording is necessary to protect interests against third parties.