Contract of Lease Commercial Building
Contract of Lease Commercial Building
Contract of Lease Commercial Building
OF LEASE
– and –
WITNESSETH; that –
WHEREAS, the Lessor desires to lease out a portion of the afore-described property in
favor of the LESSEE and the LESSEE accepts the lease subject to the
terms and conditions herein set forth.
NOW, THEREFORE, for and in consideration of the foregoing premises and the
covenants hereinafter stipulated, the parties hereby agree as follows:
ARTICLE II CONSIDERATION
1. Rental Payment and Escalation Clause.- Within the first five (5) days of each
calendar month, the LESSEE shall pay the LESSOR a monthly rent at the rate of
__________________________ (P_____________) per square meter or the total
amount of __________________________ (P_____________). In addition, the
monthly rent shall escalate yearly by _____________ (_____%) percent of the base
monthly rent starting on the _____________ year and each year thereafter until the
termination of this contract, the base rent being understood to be the monthly rent
applicable for the said year as opposed to the original rent provided above.
2. Advance Rental Payment.-Within five (5) days from the signing of this Lease
Agreement, the LESSEE shall remit to the LESSOR an amount equivalent to
__________ (_____) months rent or the total sum of
__________________________ (P_____________) to be applied as rental
payment for the last two (2) months of this contract.
3. Security Deposit. – Within five (5) days upon the signing of this Lease Agreement,
the LESSEE shall remit to the LESSOR an amount equivalent to _____________
(_______) month’s rent or __________________________ (P___________) to
serve as security deposit for any unpaid utility bills such as electricity, water,
telephone, sanitation, sewerage and others, and to answer for any damages which
the Leased Properties may suffer as well as to cover any unpaid monthly rent;
interests or penalties. This amount is refundable to the LESSEE free of any interest
thirty (30) days after the termination of this Lease Agreement subject to deduction
for whatever utility bills and monthly rentals, interests, penalties that have remained
unpaid and damages that may have been incurred, provided, that the LESSEE shall
still be liable for any and all bills, rentals, interests, penalties and damages that may
exceed this security deposit. The LESSEE shall not be allowed to offset or use its
security deposit as its monthly rental payment.
1. Term. – Unless earlier terminated for reasons specified herein, the term of this
Lease Agreement shall be for _____________ (_____) years to start on
_____________ and end at noontime on _____________ renewable upon mutual
agreement of the parties.
1. Use of the Leased Properties. – The LESSEE shall use the Leased Properties
strictly and exclusively as __________________________. If the Leased Properties
are used for other purposes, the LESSOR has the choice to:
In no case shall the Leased Properties be used for immoral or illicit purposes and illegal
acts or purposes.
2. Sub-Lease. – The LESSEE may sub-lease the Leased Properties; provided, that it
has secured the prior express written consent of the LESSOR and that the
provisions of this Lease Agreement is incorporated by reference in the proposed
sub-lease; provided, further, that the purpose of the sub-lease will be substantially
similar to that of the original lease provided, finally, that if the LESSOR so consents
to the sub-lease, the LESSOR shall receive a fixed percentage of ten (10%) of the
sub-lease rates over and above the regular rent already collected under this Lease
Agreement.
It is understood that the LESSEE shall act as the surety of the sub-lessee for
purposes of this Lease Agreement. The LESSEE shall provide LESSOR with a copy
of the sub-lease agreement not later than ten (10) days after the execution of the
sub-lease agreement. In addition, the LESSEE shall remit LESSOR’S percentage
participation in the sub-lease rentals within the first five (5) days of each calendar
month.
ARTICLE V DEFAULT
1. Interest Payment. – In the event the LESSEE fails to pay its monthly rent within the
first five (5) days of each month, the LESSOR shall charge interest on the monthly
rent at the rate of _____________ (______%) percent per month, which shall be
compounded monthly until full payment is made.
ARTICLE VI CANCELLATION
1. Grounds for Cancellation. – The LESSOR may cancel or terminate this Lease
Agreement, upon the happening of any of the following events:
2.1. The LESSEE fails to pay its monthly rent when the same falls due.
2.2. The LESSEE fails to remit LESSOR’S percentage participation in the sub-lease
rentals, if any, when the same falls due.
2.3. The LESSEE uses the Leased Properties for purposes other than those
specified herein, without prejudice to the options available to LESSOR under Section
1, Article IV hereof.
2.4. The LESSEE violates any of the other terms and conditions of this Lease
Agreement or fails to get the necessary permits from the national and/or local
government units / agencies.
1. Insurance. – The LESSEE shall obtain insurance coverage for the Leased
Properties, against all insurable risks applicable from a duly
accredited and reputable insurance company in an amount equal to the maximum
insurable value of the Leased Properties. The LESSOR shall be the Beneficiary of
the required Insurance. In case of complete loss or damage to the Leased
Properties, and/or the improvements therein, during the term of this lease, the
LESSOR shall have the option to reconstruct or restore the lost or damaged Leased
Properties, and/or the improvements therein, to their original condition or to consider
this lease automatically terminated. In case of damage in part, rental shall be
reduced in proportion to the remaining tenantable or useable area.
3. Improvements. – The LESSEE shall not make any structural changes, alterations,
additions or improvements on the Leased Properties without the prior written
consent of the LESSOR. Any alterations or improvements made or introduced by the
LESSEE on the Leased Properties with the written consent of the LESSOR shall,
upon the termination of this Lease Agreement, automatically be owned by the
LESSOR without any obligation on the part of the LESSOR to pay or refund its value
or cost to the LESSEE.
4. Signs and Advertisements. – Subject to prior written consent of the LESSOR, the
LESSEE may install, erect or affix upon the Leased Properties, signs or
advertisements as may be necessary to promote and/or advertise the business in
which it is engaged in. In requesting the approval of the LESSOR, LESSEE should
submit a description and the specification of its proposed sign or advertisement.
5. Care of Leased Properties. – The LESSEE shall, at its own expense, maintain the
Leased Properties in a clean and sanitary condition free from noxious odors,
disturbing noises or other nuisances. The LESSEE, its employees, agents or
representatives shall not in any manner damage or deface any part of the Leased
Properties.
9. Assignment. – The LESSOR reserves the right to assign, transfer or encumber any
of its rights and interests under this Lease Agreement to any entity without the need
of obtaining the consent of the LESSEE except to notify the latter of the same. In the
event of such transfer, assignment or encumbrance, the rights and interest of the
LESSEE under this Lease Agreement shall be respected and observed in its entirety
by such assignee, transferee or mortgagee, and for the entire term hereof unless
otherwise mutually agreed upon by the parties including the LESSEE.
10. Return of Premises. – Upon the termination of this Lease Agreement for any reason
whatsoever, the LESSEE shall peacefully and immediately vacate the Leased
Properties and return possession thereof to the LESSOR in good and tenantable
condition, devoid of all occupants, equipment and effects of any kind. Failure of the
LESSEE to return the Leased Properties as provided herein shall make it liable to
pay liquidated damages to the LESSOR in an amount equivalent to six (6) months
rent without prejudice to such other amounts as may be due LESSOR and/or such
other remedies available to the LESSOR under this Lease Agreement and/or under
the law.
11. Right to Enter the Premises to Recover Actual Possession.- Upon the failure of the
LESSEE, or the sub-lessee as the case may be, to comply with any of the
terms and conditions of this lease or its failure to vacate and return the premises as
provided herein, the LESSOR or her authorized representative(s) shall have the
right, upon five (5) days written notice to the LESSEE, or upon written notice posted
at the entrance of the Leased Properties for the same period, to enter and take
possession of the said premises, without need of resorting to any court action,
holding, taking custody and impounding such possessions and belongings of the
LESSEE found therein after conducting an inventory of the same in the presence of
witnesses, until such time that all the rentals, interests, penalties, unpaid utility bills,
damages or other amounts due to the LESSOR has been fully settled by the
LESSEE. All these acts being hereby agreed to by the LESSEE as tantamount to his
voluntary vacation of the leased premises without necessity of suit in
court and authorizing LESSOR to use all necessary and reasonable force to break
open doors and to enter the premises and take actual possession thereof, and such
entry and use of reasonable force should not be regarded as trespass, nor be sued
as such, or in any wise be considered as unlawful.
12. Transfer of Rights. – The LESSEE shall not assign, or transfer or encumber its rights
under this lease without the prior written consent of the LESSOR and no right, title or
interest thereto or therein shall be conferred on or vested in any other party other
than the LESSEE without such written consent.
13. Indemnity. – The LESSEE shall hold LESSOR free and harmless from any loss,
damage, injury suffered by the LESSEE, its agents or employees, clients, guests or
customers or other third persons arising out of the use of the Leased Properties by
LESSEE, its agents, employees, clients, guests, or customers including but not
limited to, claims for property damage, personal injury or wrongful death, or losses or
damages occasioned by reason of any event or cause which could not be foreseen,
or which, though foreseen, were inevitable such as but not limited to fire,
earthquake, lightning, typhoons, flood, volcanic eruption, robbery, theft or other
crimes. In addition, the LESSOR shall not be liable nor responsible:
(i) For the presence of bugs, vermin, rats, insects, or other similar creatures, if any,
in the Leased Properties:
(ii) For the failure of electrical and/or water supply due to causes beyond LESSOR’s
control;
(iii) For any injury, loss or damage which the LESSEE, its agents or employees,
might sustain while in the Leased Properties due to causes attributable to the fault of
said LESSEE, employees, agents and/or representatives, or those of its clients,
guests or customers;
(iv) For any damage done or occasioned by, or arising from the plumbing, gas,
water, and/or other pipes or air-conditioning system or for the bursting, leaking or
destruction of any tank, cistern, washers, and water closets or waste pipelines in,
above, upon, or about said Leased Properties, nor for any damage arising from or
attributable to acts of negligence of the LESSEE or its agents, employees,
representatives or any and all other persons over which the LESSOR has no control.
14. Non-Waiver. – The failure of the LESSOR to insist upon a strict performance of any
of the terms, conditions and covenants hereof shall not be deemed a relinquishment
or waiver of any of the rights or remedies that the LESSOR may have, nor shall it be
construed as a waiver of any subsequent breach or default of its terms,
conditions and covenants which shall continue to be in full force and effect. No
waiver by the LESSOR of its rights under this Lease Agreement shall be deemed to
have been made unless expressed in writing and signed by the LESSOR.
16. Venue. – In case of any dispute arising in connection with this Lease Agreement, the
parties hereby agree that the venue for the settlement of the dispute shall fall
exclusively within the jurisdiction of the proper courts in the City of _____________,
Philippines.
IN WITNESS WHEREOF, the parties have set their hands and affixed their signatures
this _____________ in the City of _____________, Philippines.
LESSOR LESSEE
__________________ __________________
(ACKNOWLEDGMENT)