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10 Things You Should Look For In A Monthly Rental Agreement

by on | Categories: Renting

Disputes are expensive. Whether your disagreements reaches a court of law or not, the stress, time, and hassles are avoidable nuances. The Philippines has extensive laws that govern lessor-lessee relationships. If you’re not sure about a certain provision in the month-to-month lease form, you can consult the New Civil Code, which is written in accessible English.

What is a month-to-month rental agreement? As the phrase suggests, it’s the agreement with your lessor (landlord) that will govern your short-term stay in his/her property. This type of arrangement is not necessarily restricted to one month or four weeks because it may be renewed for another similar period. A monthly rental agreement is typically sought by students preparing for licensure exams, seafarers undergoing trainings, and balikbayans.

You can avoid unnecessary headaches and costs by understanding monthly rental agreement forms. Take the time to read the fine print and don’t hesitate to ask questions. Once you affix your signature, you’re binding yourself to the provisions of the contract. Here are things to know when signing a leasing agreement form.

What is the term of lease?

2018 term of leasePhoto Courtesy of IMAMA LAVI via Pexels

What is a “month”? Is it composed of 30 days or four weeks? If you’re renting on a February, will you be short of two days to complete a one-month period? According to the New Civil Code, months are understood to be composed of 30 days but if they’re designated by their names, “they shall be computed by the number of days which the respectively have.”

Thankfully, lease agreements commonly indicate the exact start and end date of its validity. For an instance, “February 1, 2018 to February 28, 2018.” The contract should also stipulate provisions for renewal with information on automatic renewal, if applicable, or the period for you to inform whether to renew or terminate the lease agreement.

Is the rental rate inclusive of taxes and other charges?

The rental rates in the Philippines are generally driven by market forces. There isn’t any standard rate set by law and lessors set rates based on the prevailing rents in the area. A month-on-month lease agreement shall provide for the fixed rent for that period, and may not be changed on the duration of the contract. Check whether the rent stipulated therein is inclusive of taxes and other charges.

When will the security deposit be refunded?

In a monthly agreement form, you’d be asked to pay the monthly rent in advance and place in a security deposit. The security deposit, which is fixed and non-interest earning, shall be used for damages and other monetary liabilities at the end of the lease agreement EXCLUDING the rent. Any balance shall be refunded to you within a certain period after the expiration of the contract. You should take note of this “certain period,” which must be explicitly indicated, because many disputes arise from the refund of the security deposit.

Why is going over the inventory essential?

The security deposit shall be applied primarily on any damage on the leased premises. The lease contract should have an attached document listing down the furnishings and appliances included in the rent privileges. A condo for lease, especially one under a month-on-month lease contract, may be semi- or fully-furnished. A fully furnished condo has everything you need: bed, kitchen and utensils, and appliances. Just bring your clothes and other personal effects and you’re set. You and your lessor will go through each item in the inventory, indicating their quantity and condition before and after the lease. Any damage on the listed items shall be on your account subject to exceptions (e.g. damage due to fortuitous event, caused by the lessor, etc.).

Can I sublease the premises?

keys for subleaserPhoto courtesy of Kaboompics via Pexels

Renting out a property in the Philippines can be a bit a tricky. A lessor needs to be specific with the terms of the contract, otherwise lessees may raise the silence on certain provisions as defense. Take for example subleasing in which a lessee rents out the premises, partially or fully, to a third person. Essentially, there will be two agreements: the one between the lessor/landlord and the lessee and another involving the lessee/sub-lessor and the sublessee. Unless the contract allows subleasing or you seek the consent of your lessor, you are prohibited from sub-leasing the premises. Check out Republic Act No. 9653 or the Rent Control Act of 2009. Sub-leasing the property in contravention of the lease agreement and without the consent of the lessee is a breach subject to extrajudicial termination of the lease and the lessor’s right of ejectment.

Can I renew the contract?

Your month-on-month lease contract should have a provision on renewal or extension of the lease. The stipulations shall indicate the period you’re supposed to signify your intent. This may be at least five days before the expiry date. It should also explicitly inform you on the methods to express your intent such as by signing a new contract or extension form, whichever is applicable.

What are the repercussions of a pre-termination of lease?

Pre-termination of a month-on-month agreement may result to the forfeiture of the rent you’ve already paid. This means that you cannot get back the rest of the rent for the unused period. Pre-termination of the contract is also a breach and may be subject to the penalties provided for under the provisions of the contract.

Can I bring pets?

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Before signing the lease contract, it’s important to go over the rules and regulations either indicated in the contract itself or in an attached document. The rules shall provide whether you can bring pets, smoke inside the premises, the number of guests you can host at any given time, among others. If you have any questions, ask your lessor right away. Don’t assume because assumptions may result to breach of contract.

Can my lessor enter the leased premises?

Yes. As a general rule, no one, not even the lessor, may enter your home without your consent. This is by virtue of the Castle Doctrine which provides the occupant the right to defend his home from intruders. It doesn’t matter if you own your home or merely renting it. However, this rule is subject to limitations. Under a lease contract, the lessor may enter the premises in the event of abandonment, dangerous substances or activities that pose danger to people and property, and fortuitous events. The lessor or his/her authorized representative may have the right to inspect the leased premises with your presence.

In case of disputes, where should I go?

two men hand shakesPhoto courtesy of rawpixel.com via Pexels

The lease contract shall provide for measures to settle disputes and the proper venue for litigation, if necessary. Take efforts to settle the matter without going through litigation. If you have any leasing issues, reach out to your lessor first. Then, contact the admin office in your condo community for possible mediation/conciliation. It’s advisable to exhaust all non-adversarial remedies before seeking recourse from the courts.

A condo for rent in the Philippines is a sought-after accommodation among students, working professionals, families, and balikbayans. The location of condo communities, in the center of business and commercial hubs, allows you to better maximize your time. You’re also provided access to lifestyle amenities that help you decompress and truly enjoy city living. But don’t sign a lease contract just yet. Take the time to read through the fine print and have all your queries answered. One way of attaining a harmonious community living is preventing disputes with your lessor by simply understanding the ins and outs of your lease agreement.

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