Commercial Lease Agreement - Template, Sample Form Pro · PH-law

CONTRACT OF LEASE

KNOW ALL MEN BY THESE PRESENTS:

This Contract of Lease (the "Contract") is made and entered into at the City/Municipality of ________, Province of ________, this ________ day of ________, 20________, by and between:

________, Filipino, of legal age, with address at ________, hereinafter referred to as the "LESSOR";

- and -

________, Filipino, of legal age, with address at ________, hereinafter referred to as the "LESSEE".

The LESSOR and the LESSEE shall hereinafter be referred to collectively as the "Parties".

WITNESSETH: That -

WHEREAS, the LESSOR is the absolute and registered owner of the following property (the "Property"):

________

covered by Transfer/Original Certificate of Title No. ________ of the Registry of Deeds of ________, with Tax Declaration No. ________;

WHEREAS, the Property is located at the following address:

________

WHEREAS, the LESSEE desires to lease the Property, and the LESSOR is willing to lease the same unto the LESSEE, under the terms and conditions hereinafter set forth;

NOW THEREFORE, for and in consideration of the foregoing premises and the mutual covenants and stipulations herein contained, and pursuant to Articles 1642 to 1688 of the Civil Code of the Philippines and other applicable laws, the Parties agree as follows:

Art. I. SUBJECT OF THE LEASE

The LESSOR hereby leases unto the LESSEE the entire Property, which shall hereinafter be referred to as the "Leased Premises". The Leased Premises has an area of ________ Square Meters, more or less.

Art. II. TERM OF THE LEASE

The term of this lease shall be for a fixed period beginning on ________ and ending on ________. This lease may be renewed upon such terms and conditions as may be mutually agreed upon by the Parties in writing.

Art. III. RENT

The monthly rent shall be ________ (₱________) per month, Philippine Currency.

The LESSEE shall pay the rent on the 1st day of every month, in advance.

The rent shall be paid to the LESSOR at the following address:

________

The rent is subject to creditable withholding tax which the LESSEE shall deduct and withhold in accordance with the National Internal Revenue Code, as amended. The rent does not include other taxes which may be levied or imposed, such as but not limited to Value-Added Tax ("VAT") and Documentary Stamp Tax ("DST") under the National Internal Revenue Code, as amended, which, if applicable, shall be for the account of the LESSEE.

The LESSEE shall remit the withholding tax to the Bureau of Internal Revenue on behalf of the LESSOR in accordance with applicable laws and regulations, and shall submit a copy of the Certificate of Creditable Tax Withheld at Source (BIR Form 2307) to the LESSOR within Five (5) days from the payment of the tax.

The rent shall be due and payable without need of demand.

Art. IV. SECURITY DEPOSIT

The LESSEE shall pay a Security Deposit of ________ (₱________) as guarantee for the full and faithful compliance with each and every provision, term, and covenant of this Contract. The Security Deposit shall be paid on ________.

The Security Deposit shall not earn interest, nor may the LESSEE demand that the same be applied to any monetary obligation under this Contract during the term hereof.

Upon the LESSEE's full and faithful compliance with each and every provision, term, and covenant of this Contract, the Security Deposit shall be returned to the LESSEE within Thirty (30) days after the LESSEE has vacated and surrendered the Leased Premises, provided the same is accepted by the LESSOR and all unpaid obligations and charges incurred by the LESSEE have been fully settled and proof of payment has been presented to the LESSOR. If there are any unpaid obligations and charges, the LESSOR shall present a written demand to the LESSEE to settle the same within Fifteen (15) days from receipt; otherwise the Security Deposit shall be utilized to settle any and all unpaid obligations and charges. The LESSOR shall present a detailed list with proper documentation for all deductions from the Security Deposit.

In the event that the LESSEE terminates this Contract through no fault of the LESSOR, abandons the Leased Premises before the expiry date, or violates any provision, term, or covenant of this Contract, the Security Deposit shall be forfeited in favor of the LESSOR as liquidated damages under Article 2226 of the Civil Code, unless the termination is due to a fortuitous event or civil or political disturbance.

Art. V. USE OF THE LEASED PREMISES

The LESSEE shall use the Leased Premises solely for the following purpose and all activities related thereto:

________

The LESSEE shall not use the Leased Premises for any other purpose, nor shall the use of the Leased Premises be converted, without the prior written authorization of the LESSOR.

The LESSEE shall not use the Leased Premises for any illegal or immoral purpose, nor shall the LESSEE expose or subject the Leased Premises to any extra-hazardous activities, whether within or outside the scope of the purpose or use of the Leased Premises.

Art. VI. SERVICES AND UTILITIES

The lease shall include the following services and utilities:

________

All bills and expenses incurred by the LESSEE's use thereof shall be for the account of the LESSEE.

All other services and utilities shall be obtained by and for the account of the LESSEE. The LESSOR shall extend all reasonable assistance to the LESSEE in securing any such other services and utilities, including executing, signing, and submitting any documents required by the service or utility providers.

Art. VII. PARKING

The LESSEE shall be entitled to use ________ parking space(s).

Art. VIII. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS

The LESSEE shall not make any alterations, additions, or improvements on the Leased Premises without the prior written consent of the LESSOR.

The LESSOR reserves the right to prescribe or limit the weight of any machinery, equipment, or furniture that the LESSEE may bring into and keep in the Leased Premises.

The LESSEE shall not drive nails, screws, hooks, or the like on or into the walls or any part of the Leased Premises, or in any way damage any part thereof.

Any alterations, additions, and improvements on the Leased Premises, except movable property and fixtures introduced at the expense of the LESSEE which can be removed without damage or destruction to the Leased Premises, shall remain on and be surrendered as part of the Leased Premises upon the termination of the lease, and the same shall become the property of the LESSOR without compensation to the LESSEE.

Art. IX. CARE OF THE LEASED PREMISES

The LESSEE shall maintain the Leased Premises in a clean and sanitary condition, free from noxious odors, disturbances, and other nuisances, at its own expense.

The LESSEE shall be responsible for the maintenance and upkeep of the Leased Premises, including the maintenance of plumbing and electrical fixtures therein.

All signs, advertisements, and displays shall be approved by the LESSOR before the same are installed in the Leased Premises. The LESSOR reserves the right to require the LESSEE to remove any sign, advertisement, or display which the LESSOR, in good faith, considers inappropriate or improper for the general appearance of the Property.

The prior written consent of the LESSOR shall be required before the LESSEE may bring in or take out any machinery, office furniture, office machine, or any type of equipment or accessories of any kind.

The LESSEE shall be liable for all damage to the Leased Premises unless such damage occurred without the fault or negligence of the LESSEE. Any damage shall be presumed to have been caused by the fault or negligence of the LESSEE unless the same was caused by a fortuitous event or act of God, such as typhoons, earthquakes, and the like, or by other events that could not be foreseen or reasonably prevented. The LESSEE shall likewise be liable for damage arising from the fault or negligence of the LESSEE's employees, customers, guests, visitors, or other persons within the Leased Premises, as if the same arose out of the LESSEE's own fault or negligence.

The LESSEE shall repair any damage to the Leased Premises within Thirty (30) days from the occurrence of the damage. Failure to do so shall constitute a breach of this Contract entitling the LESSOR to terminate the lease.

The LESSEE shall immediately inform the LESSOR of any damage to or usurpation of the Leased Premises.

The LESSOR shall undertake any major and extraordinary repairs affecting the structure of the Leased Premises. The LESSEE shall allow the LESSOR access to the Leased Premises for the purpose of renovations, repairs, or other work thereon. The LESSOR shall not be liable to pay any compensation or claim by reason of any inconvenience or annoyance to the LESSEE arising from such renovations, repairs, or other works, provided that the same do not unreasonably prevent the LESSEE from using the Leased Premises for the purposes provided in this Contract.

Art. X. DANGEROUS AND HAZARDOUS MATERIALS

The LESSEE shall not keep or have in the Leased Premises any material, article, or thing of a dangerous, flammable, or explosive nature that might substantially and unreasonably increase the risk of fire or explosion on the Leased Premises, or that might be considered hazardous by a responsible insurance company, unless the prior written consent of the LESSOR is obtained and proof of adequate insurance protection is presented by the LESSEE to the LESSOR. Any increase in insurance payable by the LESSOR arising from the storage of any such material, article, or thing shall likewise be for the account of the LESSEE.

Art. XI. DAMAGE TO THE LEASED PREMISES

If the Leased Premises is partially destroyed or damaged, as jointly determined by the LESSOR and the LESSEE, without the fault or negligence of the LESSEE, the LESSEE may choose between a proportional reduction of the rent or the rescission of the lease, consistent with Article 1655 of the Civil Code.

If the Leased Premises is partially destroyed or damaged due to the fault or negligence of the LESSEE, the LESSEE shall repair such damage in accordance with the preceding Article.

If the Leased Premises is totally destroyed or cannot be used for the purpose of the LESSEE, as jointly determined by the LESSOR and the LESSEE, the lease shall be terminated and the Security Deposit shall be returned to the LESSEE within Thirty (30) days from such determination.

If the Leased Premises is totally destroyed or cannot be used for the purpose of the LESSEE, and the same was due to the fault or negligence of the LESSEE, or its employees, agents, or visitors, then, without prejudice to other actions that the LESSOR may take against the LESSEE, the LESSEE shall repair the damage, or the same shall be repaired by the LESSOR at the expense of the LESSEE, and the LESSEE shall remain liable to pay rent.

Art. XII. PROPERTY INSURANCE

The LESSOR and the LESSEE shall each maintain appropriate insurance for their respective interests in the Leased Premises and the property located therein. The LESSEE's insurance shall be in an amount equal to the maximum insurable value thereof, with such insurance company or companies as are reasonably satisfactory to the LESSOR. The LESSOR shall be added as joint beneficiary to any such insurance policy, and said policy shall be assigned and delivered to the LESSOR within Thirty (30) days from the date of this Contract. The LESSEE shall, at its own expense, also maintain property insurance on its own furniture, equipment, and other property found inside the Leased Premises, a copy of which shall likewise be delivered to the LESSOR within Thirty (30) days from the date of this Contract.

Art. XIII. TAXES

All taxes and assessments levied or imposed on the Leased Premises, such as but not limited to real estate taxes, shall be for the account of the LESSOR. All taxes and assessments arising from the business or activities of the LESSEE conducted in the Leased Premises shall be for the account of the LESSEE. Any new tax or assessment that may be imposed by the Government or any of its instrumentalities or political subdivisions which is directly related to the lease shall be for the account of the LESSEE.

Art. XIV. LIABILITY OF LESSOR

The LESSOR shall not be liable for any loss, damage, or injury suffered by the LESSEE, the LESSEE's employees, customers, guests, visitors, or other persons, or to their property, while in or about the Leased Premises, arising from any cause whatsoever, except where the same is due to the fault or negligence of the LESSOR. The LESSEE hereby releases and holds the LESSOR free and harmless from any and all such claims, demands, and liabilities.

Art. XV. QUIET ENJOYMENT

The LESSEE shall have the right to the peaceful and adequate enjoyment of the Leased Premises during the period of the lease, free from interruption by the LESSOR or any person claiming under the LESSOR, provided that the LESSEE complies with all the terms, provisions, and conditions of this Contract.

Art. XVI. LATE PAYMENT OF RENT

For any payment not made on the due date, the LESSEE shall pay a late fee of ________ (₱________).

Art. XVII. ABANDONMENT OF THE LEASED PREMISES

The LESSEE shall be deemed to have abandoned the Leased Premises if the same remains unoccupied for a continuous period of Thirty (30) days at any time during the period of the lease and the LESSEE fails to pay the corresponding rent for the said period. Upon such abandonment, the LESSOR shall have the right to lease the Leased Premises to other persons or organizations, and the LESSEE shall continue to pay rent until a new lessee has been found. The Security Deposit shall likewise be forfeited in favor of the LESSOR by way of damages.

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For purposes of this Article, the LESSEE expressly constitutes the LESSOR and the LESSOR's authorized representatives as the LESSEE's attorneys-in-fact, and all acts performed by them in the exercise of their authority are hereby ratified by the LESSEE.

Art. XVIII. EARLY TERMINATION

The LESSEE shall have the option to terminate the lease prior to the end of the term, provided that the LESSEE pays a penalty of ________ (₱________).

Art. XIX. CONDEMNATION AND EXPROPRIATION

The LESSEE shall peacefully deliver the Leased Premises or any portion thereof to the LESSOR if, during the term of this Contract, the Government, or any of its instrumentalities or political subdivisions, or any public utility company, expropriates or condemns the same or any affected portion thereof. The LESSEE shall not have any claim against, nor be entitled to any compensation or indemnity from, the LESSOR by reason of such expropriation or condemnation.

Art. XX. DEFAULT BY LESSOR

If the LESSOR fails or neglects to perform any term or condition of this Contract within Thirty (30) days after receipt of written notice, the LESSEE may rescind this Contract and terminate the lease, without prejudice to any appropriate action that the LESSEE may take against the LESSOR as a consequence of such failure or neglect. The LESSOR shall also return the Security Deposit within Fifteen (15) days from the termination of the lease.

Art. XXI. DEFAULT BY LESSEE

If the LESSEE fails to pay any monetary obligation, including rent and taxes, or violates any provision of this Contract, the LESSEE shall be given Thirty (30) days from the due date of the rent or from the date the violation occurred to pay such monetary obligation or to cure or remedy such violation; otherwise the LESSOR shall have the right to rescind this Contract and terminate the lease.

Default shall automatically take place upon the failure of the LESSEE to pay or to cure or remedy any violation, without need of further action or demand. If no period is provided, the LESSEE shall comply within Ten (10) days from the receipt of the written notice or demand.

The LESSOR shall have the right to rescind this Contract and terminate the lease if the LESSEE is in default, and the Security Deposit shall likewise be forfeited in favor of the LESSOR by way of damages, without prejudice to any other action or right which the LESSOR may take against the LESSEE as a consequence of the LESSEE's default.

Art. XXII. NOTICE OF TERMINATION

If one Party is in default, the other Party may terminate this lease judicially or extrajudicially. A Fifteen (15) day written notice of the intention to terminate the lease shall be sufficient to terminate the lease extrajudicially, without prejudice to claims for any and all damages resulting from such default or termination.

Art. XXIII. RETURN OF THE LEASED PREMISES

Upon the termination or expiration of the lease for any cause, the LESSEE shall, without need of demand, immediately vacate and peacefully and completely surrender the Leased Premises to the LESSOR in good and habitable condition, save for natural wear and tear, and devoid of any occupants, furniture, or other articles of any kind, save for any permanent improvements and fixtures that cannot be removed without damage to the Leased Premises, which shall be surrendered in good condition to the LESSOR without compensation to the LESSEE.

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For purposes of this Article, the LESSEE hereby constitutes the LESSOR and the LESSOR's authorized representatives as the LESSEE's attorneys-in-fact, and all acts performed by them in the exercise of their authority are hereby ratified by the LESSEE.

Art. XXIV. HOLDOVER

There shall be no implied renewal of the lease if the LESSEE retains the Leased Premises despite the termination of the lease, for any cause. However, the LESSOR shall be entitled to collect rent for the period that the LESSEE retains the Leased Premises (the "Holdover Period"). Such collection of rent after the termination of the lease shall not be construed as evidence of consent for the LESSEE to retain the Leased Premises, nor shall it be proof of an implied renewal of the lease.

The LESSEE shall pay rent at a rate equal to ________% of the normal rent payment, starting from the date after the lease has been terminated, prorated based on the actual number of holdover days.

Art. XXV. RENEWAL OR EXTENSION OF LEASE

The LESSEE shall notify the LESSOR in writing of its desire to renew the lease at least Ninety (90) days prior to the expiration of the lease; provided, however, that mere notification by the LESSEE shall not be deemed an automatic renewal of the lease.

Failure of the LESSEE to give written notice of its intention to renew within Ninety (90) days, or failure to agree on the terms and conditions for the renewal or extension of the lease at least Sixty (60) days before the end of the lease, shall entitle the LESSOR to show the Leased Premises to prospective lessees and, if proper, to hang a "For Rent" sign on the Leased Premises.

Art. XXVI. INDEMNITY REGARDING USE OF PREMISES

The LESSEE shall indemnify, hold harmless, and defend the LESSOR from any and all losses, claims, demands, liabilities, and expenses by the LESSEE or third persons for loss of life, injury, or loss of or damage to property in connection with the LESSEE's possession, use, or misuse of the Leased Premises and the Property.

The LESSEE hereby assumes full responsibility for any damage or injury to the person or property of third persons while in the Leased Premises.

Art. XXVII. SUBLEASE AND ASSIGNMENT

This Contract shall not be assigned, and the Leased Premises shall not be subleased, in whole or in part, without the prior written consent of the LESSOR, consistent with Article 1649 of the Civil Code.

Art. XXVIII. WAIVER

Failure of either Party to insist, in one or more instances, upon the strict performance of any of the terms of this Contract, or to exercise any right herein contained, shall not thereafter be construed as an abandonment, cancellation, or waiver of such term. No waiver shall be deemed to have been made unless expressed in writing and signed by the LESSOR or the LESSEE. No waiver of any term or provision of this Contract shall constitute a waiver of any other term or provision, or of the same provision on a future date.

Art. XXIX. NOTICES

All written notices may be sent by registered mail or personal delivery to the respective addresses of the Parties stated above. All written notices by the LESSOR shall be considered received on the date of actual receipt by the LESSEE or the LESSEE's authorized representative. If the LESSEE or the LESSEE's authorized representative refuses to receive such written notice, or cannot be found at the Leased Premises, the written notice shall be considered received by the LESSEE on the date of the posting of the written notice on the main entrance to the Leased Premises.

Art. XXX. COUNTERPARTS

This Contract may be executed in counterparts, all of which shall constitute a single agreement. If the dates set forth at the signatures of this document are different, this Contract shall be considered effective as of the date that both the LESSOR and the LESSEE have signed.

Art. XXXI. REPRESENTATION OF LESSEE

The LESSEE hereby represents and certifies that it has read and fully understood the terms and conditions of this Contract, and that it understands and is fully aware of the consequences resulting from any breach thereof.

Art. XXXII. DATA PRIVACY

The Parties consent to the collection, use, processing, and storage of their personal data contained in or arising from this Contract solely for purposes of implementing and enforcing the same, in accordance with Republic Act No. 10173 (Data Privacy Act of 2012) and its Implementing Rules and Regulations. Each Party shall implement reasonable security measures to protect the personal data of the other Party against unauthorized access, use, or disclosure.

Art. XXXIII. SEPARABILITY CLAUSE

If any provision of this Contract is held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and shall continue to be in full force and effect.

Art. XXXIV. CUMULATIVE RIGHTS

The rights of the Parties under this Contract are cumulative and shall not be construed as exclusive unless otherwise required by law.

Art. XXXV. SUCCESSORS AND ASSIGNS

This Contract shall be binding upon and inure to the benefit of the heirs, successors, and assigns of both Parties.

Art. XXXVI. HEADINGS

Headings are for convenience only and do not affect the interpretation of this Contract.

Art. XXXVII. GOVERNING LAW AND VENUE

This Contract shall be governed by and construed in accordance with the laws of the Republic of the Philippines. The Parties agree that any action or proceeding arising out of or in connection with this Contract shall be brought exclusively before the proper courts of ________, to the exclusion of all other venues.

Art. XXXVIII. ENTIRETY OF AGREEMENT

This Contract represents the entire agreement between the LESSOR and the LESSEE and supersedes all prior negotiations, representations, and agreements, whether oral or written. This Contract may be amended only by a written instrument signed and agreed upon by both Parties.

IN WITNESS WHEREOF, the Parties have hereunto affixed their signatures on the date and place first above written.

________
LESSOR

________
LESSEE

SIGNED IN THE PRESENCE OF:

________        ________

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES )
PROVINCE OF ________ )
CITY OR MUNICIPALITY OF ________ ) S.S.

BEFORE ME, a Notary Public for and in the City or Municipality of ________, ________, this ________ day of ________, 20________, personally appeared the following persons:

1. ________, with the following competent proof of identification: Driver's License with number ________ which expires on ________;

2. ________, with the following competent proof of identification: Driver's License with number ________ which expires on ________.

all known to me and to me known to be the same persons who executed the foregoing Contract of Lease consisting of ________ pages, including this page on which this Acknowledgment is written, and they acknowledged to me that the same is their free and voluntary act and deed.

WITNESS MY HAND AND SEAL on the day and at the place first above written.

________
NOTARY PUBLIC
Until ________
PTR No. ________; ________
IBP No. ________; ________
Roll of Attorneys No. ________
MCLE Compliance No. ________

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