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Philippines – Lease Agreements

Lease Terms in the Philippines

When it comes to renting property in the Philippines, one of the first things to consider is the typical lease term. Lease terms in the Philippines can vary, but the most common lease duration is 12 months. This means that tenants typically sign a one-year lease agreement with the option to renew at the end of the term. However, it’s essential to note that shorter and longer lease terms are also possible, depending on the landlord’s preferences and the negotiations between the parties involved.

For expats and individuals seeking short-term rentals, it’s not uncommon to find properties available for lease with terms as short as three months. These short-term leases are often fully furnished to cater to the needs of those who require temporary accommodation, such as tourists or business travelers.

On the other hand, individuals looking for more extended and stable housing arrangements may opt for longer lease terms, such as two years or more. These longer-term leases are common for families or individuals planning to stay in the Philippines for an extended period.

Furnished vs. Unfurnished Rental Properties

Another important consideration when renting property in the Philippines is whether to choose a furnished or unfurnished rental. The key difference between these two options lies in the state of the property and the amenities provided.

Furnished Rental Properties

Furnished rental properties in the Philippines come fully equipped with furniture, appliances, and often include kitchen essentials such as cookware and utensils. These properties are ready for immediate occupancy and are a popular choice for expats and short-term renters who prefer the convenience of not having to purchase or transport furniture and household items.

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Furnished rentals are also ideal for individuals who plan to stay for a limited time and do not want the hassle of setting up and dismantling their living space. These properties are common in urban areas, especially in popular tourist destinations and expat communities.

Unfurnished Rental Properties

Unfurnished rental properties, on the other hand, are typically empty spaces with no furniture or appliances provided by the landlord. Tenants who choose unfurnished rentals are responsible for furnishing the property themselves, including purchasing and moving in their furniture, appliances, and other household items.

Unfurnished rentals are often favored by long-term residents who have their furniture or expats who prefer to personalize their living spaces. These properties can also be more budget-friendly than furnished options since tenants have the flexibility to choose their furnishings and appliances based on their preferences and budget.

Standard Lease Agreement Clauses

Lease agreements in the Philippines typically include standard clauses that outline the rights and responsibilities of both landlords and tenants. These clauses are designed to protect the interests of both parties and ensure a clear understanding of the lease terms. Some of the standard clauses you can expect to find in a lease agreement in the Philippines include:

  • Rent Amount and Payment Terms: This clause specifies the monthly rent amount, due date, and accepted payment methods.
  • Security Deposit: It outlines the amount of the security deposit required and the conditions under which it may be withheld by the landlord.
  • Duration of the Lease: This clause specifies the lease term, including the start and end dates of the agreement.
  • Renewal Terms: It explains the process for lease renewal, including any rent adjustments.
  • Repairs and Maintenance: This clause details the responsibilities of both the landlord and tenant regarding property maintenance and repairs.
  • Utilities: It clarifies which utilities are included in the rent and which are the tenant’s responsibility to pay separately.
  • Termination and Notice: This outlines the procedures for terminating the lease, including notice periods required by both parties.
  • Property Inspection: It may include provisions for pre-move-in and post-move-out property inspections.

Additional Clauses in Lease Agreements

While the above clauses are standard and commonly included in lease agreements, there may be additional clauses that landlords and tenants choose to include based on their specific needs or circumstances. These additional clauses are not mandatory but can be added to address unique situations or concerns. Some examples of additional clauses that may be included in a lease agreement in the Philippines are:

  • Pets: This clause may specify whether pets are allowed on the property and any associated rules or fees.
  • Subletting: It can outline whether subletting is allowed and under what conditions.
  • Access to the Property: This clause may detail when and how the landlord can access the property for maintenance or inspection.
  • Special Provisions: Landlords and tenants can include custom provisions related to specific agreements or arrangements not covered by standard clauses.

Considerations for Expats

Expats looking to sign a lease contract in the Philippines should be aware of several important considerations to ensure a smooth and secure rental experience:

  • Local Laws and Regulations: Familiarize yourself with the local rental laws and regulations in the Philippines to understand your rights and responsibilities as a tenant.
  • Payment Methods: Be clear on the accepted methods of rent payment, whether it’s through bank transfers, checks, or other means.
  • Security Deposit: Understand the conditions under which your security deposit may be withheld and ensure you receive a written acknowledgment of the deposit.
  • Language: If the lease agreement is in a language you do not understand, consider having it translated or seeking legal advice to ensure you comprehend all terms and obligations.
  • Condition Reports: While not always common, it’s advisable to request a condition report before signing the lease to document the property’s condition and avoid disputes later on.

Condition Reports in the Philippines

Condition reports, though not as common in the Philippines as in some other countries, can be requested by tenants who want to ensure a clear record of the property’s condition before moving in. A condition report typically includes detailed descriptions and photographs of any existing damage, wear and tear, or issues in the property.

If you believe that a condition report would be beneficial for your rental agreement, you can discuss it with the landlord during the negotiation process. Having a condition report can help prevent disputes over damages when it’s time to move out and recover your security deposit.

Licensing for Letting Agents

In the Philippines, letting agents, also known as real estate brokers, must be licensed by the Professional Regulation Commission (PRC). To legally engage in property rental and leasing activities, letting agents are required to pass the PRC licensure examination for real estate brokers. This ensures that they have the necessary knowledge and qualifications to assist clients in property transactions.

When working with a letting agent in the Philippines, it’s essential to verify their credentials and ensure that they are a licensed real estate broker. You can ask for their PRC license number and verify it on the PRC website to confirm their legitimacy.

Reputable Associations and Organizations

Reputable letting agencies in the Philippines may choose to be members of professional organizations and associations to enhance their credibility and commitment to ethical business practices. One such organization is the Philippine Association of Real Estate Boards (PAREB).

PAREB is a well-established association that represents real estate practitioners in the Philippines. Being a member of PAREB can be an indicator that a letting agency is dedicated to upholding industry standards and ethics. To verify a letting agency’s membership in PAREB and obtain their contact details, you can visit the official PAREB website.

By considering the lease terms, understanding the difference between furnished and unfurnished rentals, knowing standard lease agreement clauses, and being aware of important considerations for expats, individuals can navigate the rental process in the Philippines more effectively. Additionally, understanding the licensing requirements for letting agents and the presence of reputable associations can help ensure a secure and transparent rental experience in this vibrant and diverse country.