21-B Rufino Pacific Tower, 6784
Ayala Avenue cor. Rufino St.,
Makati, Metro-Manila, Philippines
Mail: info@kittelsoncarpo.com
Telephone: (+632)750-0634
Commercial Lease Agreements
By Amanda Carpo on Monday, September 01, 2008, 8:39 PM
Nine Tenths of the Law
One sided lease agreements in the Philippines are the rule of thumb and don't imagine for a second that they are in favor of the lessee. Maybe it is because the lessors are paying the legal fees. Foreigners are often shocked by the commercial and legal terms and conditions used in lease contracts in the Philippines. They normally require several months post dated checks, sizeable security deposits and advanced rentals, contain forfeiture clauses, power of attorney clauses to auction property, padlock premises and other "common commercial practices" which are either obnoxious in other countries and perhaps even downright illegal.
Can you blame the lessor who is stuck with unpaid bills whose premises are trashed at the end of the lease period? Are they just responding to their environments? The mutual distrust in local lease contracts is reflective of the lack of sophistication of commercial arrangements in the Philippines and the lack of faith in the judicial system. When your controversies cannot be resolved easily in court or by some arbitrary body, this forces you to lay down the law yourself. It also means that the legal structure and by this I mean-the laws-are not in place to protect both lessor and lessee.
Are the lawyers who draft the contracts to blame? Perhaps. Business is business but at the same time commercial contracts should be entered into in good faith. As officers of the law, lawyers should counsel their clients to be fair and reasonable lest they start a vicious cycle of abusive contracts.
It is extremely difficult to advise foreigners who are lessees to enter into local lease contracts. In the first place, they are forced to lease because of the general prohibition on land ownership. Second, they are used to terms that make business sense. Third, the law in place-the Civil Code- while it contains basic terms and conditions fails to recognize modern commercial practices. Finally, it is hard to find a good lessor. In my view, it's almost like advising on marriage. Good luck with that.
Businesses are concerned with fair rental value and the ability to relieve themselves of a lease contract without being subject to surprise charges and forfeiture of security deposit at the end of the lease term.
Under the Uniform Tenant Act in the US, which deals with residential property, A rental agreement may not provide that the tenant agrees to waive or forego rights or remedies under the Act. It may not authorize any person to confess judgment on a claim arising out of the rental agreement; agree to pay the landlord's attorney's fees; or agree to the exculpation or limitation of any liability of the landlord arising under law or to indemnify the landlord for that liability or the costs connected therewith. Of course, this is all too common in local contracts.
Further provisions prohibited above if included in a rental agreement are unenforceable. Under the law if a landlord deliberately uses a rental agreement containing provisions known by him to be prohibited, the tenant may recover in addition to his actual damages an amount up to [3] months' periodic rent and reasonable attorney's fees.
Clearly, the law regulates landlord practices and provides teeth to its provisions.
In the matter of security deposits the law restricts security deposits to a maximum of one month's rent. While the amount varies in different jurisdictions the focus of the law is that the deposit is specifically that and not a fee. Under the law, upon termination of the tenancy security may be applied to the payment of accrued rent and the amount of damages as itemized by the landlord in a written notice delivered to the tenant together with the amount due with a fixed [14] day period after termination of the tenancy and delivery of possession and demand by the tenant. Failure to return prepaid rent allows the tenant to recover the property and money due him together with damages in an amount equal to [twice] the amount wrongfully withheld and reasonable attorney's fees.
The intent of the law versus Philippine laws on leases is clear and does not allow itself to be abused by well, lawyers. Apart from a more responsive legal framework landlords and lessees could resort to using escrow agreements, insurance contracts, and other means to cover their risks. Unfair lease contracts are not just an annoyance when you think of the capital requirements involved. They substantially affect the way businesses is done in the Philippines. As the law and practice now stand for the real estate leasing market it is as if you are just asking for trouble.
Comments are closed
Tuesday, April 17, 2012
Hi All!
Im looking in behalf of some larger replacements in the service of apps that are somtimes harder to dig during the epoch with my phone dimmed down.
A brightness tab bar music playe ricons would be major but Im certain if there is a mess of blue blood tab bar icons.
Anyone foretell such pictogram collections?
Thursday, April 12, 2012
SkyDrive Mobile: A Look at Microsoft's New Windows Phone and iPhone Apps
Today, Microsoft took yet another step to advance its Windows Live SkyDrive consumer-oriented cloud service, offering up free mobile apps for both Windows Phone and Apple's iPhone. I've been using these apps for over a week, and the capabilities are impressive, especially on Windows Phone, which provides document editing capabilities in addition to viewing.
Yes, Virginia, Microsoft is serious about the cloud.
Each app looks and works similarly, though within the confines of the UIs styles of the two mobile platforms. On Windows Phone, this means a Metro-style UI with various screens, or panels, of information, and a bottom-mounted command bar for accessing Settings, changing the view style, and refreshing the view. On iOS, this means a bottom-mounted tab bar which you can use to switch between various screens of information and a Settings interface.
http://www.5starfiles.com/rate/14625/433/Pixel_Editor.php
As distinguished then, there's also a Settings interface in both apps, but there's not much there. You can configure which account to use--offering the capacity on Windows Phone for the first frequently to sign-in with song "major" Windows Exist ID on the phone but a ancillary Windows Live account payment SkyDrive--and then some "In" information. That's it.
http://news.thomasnet.com/fullstory/Software-provides-hundreds-of-icons-505767
Of course, you're not here to regard lists of files and folders. The reason in unison capability neediness a SkyDrive expressive app is to access your cloud-based files on the go. This can be in favour of reading purposes or an eye to light editing. The trial is be like on both platforms but different in a particular important way.
On the iPhone, you can without even trying view News documents, Excel spreadsheets, PowerPoint presentations, PDF files, words files, and web documents using the built-in viewer utilities provided on that platform. (These utilities typically at first glance in the Dispatch app, such as when you test to unrestricted an email attachment.) You can also study photos and then download them to the phone, one at a time.
Sunday, March 11, 2012
Hello
We are looking for not-expensive GUI designers. Please advice.
We make apps for Android.
--
Ann Chapmak
Thursday, March 08, 2012
Hallo
We are looking on not-expensive GUI designers. Please advice.
We develop apps for Android.
--
Irvin Chapmak
Sunday, February 26, 2012
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Saturday, February 25, 2012
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Wednesday, January 25, 2012
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Wednesday, January 18, 2012
I am an OFW and had recently invested my savings for the last 25 years on a Food Franchise (Restaurant)Business which flopped quickly after 7-months operation costing me P3.6M for restaurant building & furnishing and another P2.5M for operations.
Devastating financial loss was intensified after the Landlord took a special interest on the 7 month old concrete 2 story building erected for the restaurant without any reimbursement my family for the cost f the building based on technical provision on the Lease Agreement which (as I realized later) onerous.
The 600sqm lot monthly rent is P70K and we missed paying a month's rent when the owner quickly moved in by padlocking our entrance doors.
The Lease Agreement was notarized by a local Notary without my presence but bears my signature after scanning and sending by e-mail while I was in Singapore.
I am the 7th victim of the Franchisor who appears to have misrepresented herself as Franchisor who does not issue Official Receipts on my payments for COGS and never gaved any equipment and advertisement to her Franchisee.
Sad to admit I misplaced my trust on a Franchisor who had gone hiding. I need to recover the construction cost of my restaurant building. Please advise how I could compel the Lot owner to pay me for the net cost of the 2-story concrete building.
Respectfully Yours,
N. Jola
I want
Wednesday, January 18, 2012
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Friday, January 13, 2012
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Monday, December 05, 2011
czemu nie:)
Saturday, October 15, 2011
Thank you very much for this article! This information was very usefull for me=)
Saturday, October 15, 2011
Greetings! We rented a canteen for P8,000/mo. We gave 24,000 for deposit and advance. We painted and fixed the place but when rain comes alot of problem arise, there's a lot of leaks on roofs that affected the operations and the owner did nothing about it. the water lines tends to leaks weekly and still they wanted us to fix it ourselves. Worst came and the said canteen got rob so we decided to stop our operations and ask for our money. the owner is now charging us repairs and materials that's been used without our knowledge that we will be charged of everything like repairs and improvement.
what's the law can say about this?
Friday, October 14, 2011
Thank you for this information! I used it for my diploma thesis =)
Saturday, October 01, 2011
Great post I must say. Simple but yet interesting. Wonderful work!
Thursday, September 29, 2011
Great post I must say. Simple but yet interesting and engaging. Keep up a good work!
Monday, September 26, 2011
Thx for this great information that you are sharing with us!!!
Saturday, September 17, 2011
You have really interesting blog, keep up posting such informative posts!
Thursday, September 15, 2011
i have a lot which i lease it to a certain person, after the lease expires and they already vacate the premises. i lease it again to a new leasee, and now i found out that the electric bill of meralco was not fully paid by the old leasee, the new leasee could not register a new electric bill and meter bec the old leasee has a case in meralco for doing an illegal wire jumping. we were never inform by meralco maybe because the electric meter is registered to the old leasee, what can i do to help my new leasee get a new electric meter ???
Tuesday, August 23, 2011
I have a commercial space that it is being rented out. I have no contract with them. They have been habitually late payers. I want to evict them. What are the laws that I can do to evict them?
Friday, April 08, 2011
I have a contract with my lessor for a year, the contact hasn't expired yet but she is again insisting for 6 months advance. I know she has the right to collect since she own the building but is this acceptable by law? your thoughts is much appreciated.
Thursday, April 21, 2011
Our family has a property in Boracay that was leased for 50 years starting 1992. The contract seemed to be one-sided in favor only to the lessee. Besides the rental rate is very low. The owners of the property were then ignorant to the provisions that should be in the contract of lease. At present, we are selling it to the lessee but he can't buy due to insufficient funds. We now decided to terminate the said contract. Is there any chance that we can terminate it earlier when we are no longer satisfied and realized now that the lessee only took advantage of our ignorance to the law of lease contract?
Tuesday, May 24, 2011
Real brain power on display. Thanks for that aswner!
Sunday, May 29, 2011
Can there be any kind of update from the iphone4 to new iphone 5 as soon as it will come out?
Now i'm trying to find out if an apple iphone 4 owner is able to upgrade to the new iphone five when it will come out. I have had my own apple iphone 4 since may of last year and i wouldn't like to spend $600 for the i phone five when it comes out this summer time.
Thursday, February 10, 2011
is there a law limiting the increase a landlord can demand from a tenant who wants to renew his lease on a commercial space?
Monday, March 14, 2011
what is the maximum lease term on a building before it reverts back to the landowner.
Tuesday, March 22, 2011
i have a contract with a company that sub-leases a space..prior to pre-termination they have made another contract with another person covering the entire space including that which i have previously leased..what will be my remedy?
Tuesday, April 05, 2011
We have a lessee of more than ten years in our building.A commercial photo shop. They owe us six months' rent and ask them to vacate the premises immediately(as in by end of march 2011), for we need the space for another business set-up.We asked them to move last March 8,2011. The problem is, they insist they have the right for the 3 months period (as stated by the law in residential leasing). Is this true? and what right have we for they owe us six month's rent.
Saturday, July 31, 2010
i have 2 rental aparmtents, one is expired may 2010 he ask 2months,then after 2months he ask more until may 2011,we already went ot the barangay nothing happen , his father is a attorney so he said he can stay to the house as long as he want it,and if i can bring him to the court is more costly i have no enought money i cant afford to pay the attorney,the apartments need a lots of repair and maintenance coz my sister or my son need a place to stay,so wht i can do to force them to move out without any trouble. by the way we not accept a rental pay frm them for almost 5months. please give me any idea for this issue. thx
Thursday, October 08, 2009
I am on a partnership on a family business and we need to rent a commercial area/building for our business. The building we rented were on "as is" basis. The place was completely run-down and took us a lot of money to renovate it. After a few months of improvements the lessor have begun to bill us on miscellaneous things we never owed them. He even voiced out on revoking our contracts if we don't pay him. Our business is just starting and would be totally unfair to us if we will be evicted early from our intended contract. Is there any law that protects us from such abusive lessors?
Sunday, December 06, 2009
we are leasing a commercial space for 5yrs and the lessor wanted to increase the rent to 20% for the next contract. is there a law on the maximum allowable rent increase? please enlighten us. thank you very much.
Sunday, December 06, 2009
I have a residential place but location wise my place has acessibility. I have an inquiry this pereon would like to put up a lotto place. Will this affect my Meralco billing as residential?I have no license as lessor how will this affect my payment of taxes?The site is only 3.5 sq.m.
Wednesday, March 24, 2010
The water bill increased enormously due to not visible, underground leak. Who will pay the bill, is it the lessor or lessee?
Wednesday, April 21, 2010
Our company is planning to lease a property in Boracay for a term of 25 years with a total rental amounting to 450 MILLION. What if we did not finish the 25-year contract and we prematurely terminated it. how much penalty would be imposed to us. how is the percentage of penalties?
Thank you and hope you could help me.
Saturday, May 01, 2010
we are about to rent a commercial space for 12,000 a month. what's holding us back is the 5% withholding tax that will be added up to our monthly rental rate. is this fair to us?
Saturday, May 01, 2010
we are about to rent a commercial space for 12,000 a month. what's holding us back is the 5% withholding tax that will be added up to our monthly rental rate. is this fair to us?
Saturday, May 15, 2010
We have a commercial space right in front of our house, the Lessee has been renting it for 7 mos., but it turned out that they are also using the space as residential. Our pathway is full of their things (like stoves, etc) and right now they don't pay us in full instead paying us installment basis and takes a long time to get the payment in full. We have informed them that they can only use the space stated in the contract, but still they keep violating the signed contract. What can we do about this?
Wednesday, February 11, 2009
what are the protection of the lessee from the lease contract of agreement if these contracts are in favor of the lessor?
Tuesday, February 17, 2009
yes this is absolutely true! i hope the government will do something about this. A lot of foreigners find this practice(unfair lease contracts) discouraging.i've been a victim of it before so really - goodluck!
Wednesday, February 18, 2009
lease contract in the philippines always one sided infavor to the lessor. lessee leased land and build a building and made some improvements. the lessor possess all the improvements after the contract expired, the poor lessee cannot do anything even they like to extend more years to recover the investments as the lessor wanted to take over the business which is the lessee started. how and what the government of the philippines could protect investors? how much is the legal amount of increase per month or per year? is there any law would protect the lessee from one sided lessor?
Saturday, May 02, 2009
I leased a house in Davao City for 6 years - at what to me was a very good rate that never changed during the entire 6 years. My land lord (actually, ladies) where very good to me and made repairs and responded quickly to my complaints.
One thing to be aware of, however, is that most leased houses comes as they are - with no air conditioning, water heaters, and usually no provisions for washing machines and dryers. Space for a large refrigerator may be very cramped, and a modern stove may require some fit and also have location issues. If you want those things, you can install them yourself - and you take them with you when you leave.
In my case, the landlord installed these things tha required concrete removal or wall relocation for me with their maintainance crew, after I purchased them on my own. The air conditioners were nstalled by the vendor.
You have to have a checking account opened to make post-dated checks, and there is a severe penalty for bouncing checks.
All-in-all - I was very pleased with the leasing arangements.
Saturday, June 06, 2009
greetings! i am a lessee of a commercial space for more than 30 years of this building. just last august 2008, the other space next to mine has changed their use of premises and converted it to a bakeshop exactly like mine.
question:
1. did the lessor violated its own contract by allowing that in the first place as the yearly contract has not yet due for renewal?
2. does the lessor have this right to allow the same kind of business (sitting next to each other) in their own commercial building?
3. what are our rights as their 1st lessee since they started operating their building, and what can we say to the lessor not to allow such action in favor of us as protection ?
Please help. thank you
Thursday, September 17, 2009
I would like to know specifically if there is existing law or guideline in leasing a piece of land, and how much is allowable in increasing the lease amount by year, please enlighten me
Thanks