Condominium Lease Agreement (Philippines)

A Condominium Lease Agreement in the Philippines establishes the relationship between landlord and tenant, defining the rent payable, the deposit held and the obligations each side owes over the term.

The Condominium Act (RA 4726) establishes the legal framework for condominium ownership in the Philippines, including the Condominium Corporation — the body corporate formed by condominium unit owners to manage common areas, enforce the Master Deed and Declaration of Restrictions, and collect association dues. Under RA 4726, the Master Deed and Declaration of Restrictions (also called the Condominium Corporation's house rules) govern the use of units and common areas. A Condominium Lease Agreement must incorporate these restrictions — such as pet policies, subletting prohibitions, noise limits, and move-in procedures — to be enforceable within the building.

The Rent Control Act of 2009 (RA 9653), applicable to covered units, limits annual rent increases to 7% for units currently occupied and prohibits eviction without proper notice and cause. Under RA 9653, a lessor may increase rent only once every 12 months. If a covered unit is vacated and re-leased, the new monthly rent must not exceed the immediately preceding monthly rent increased by 7%.

Under BIR Revenue Regulations and the NIRC, rental income from condominium units is subject to income tax. Lessors who are individuals declare rental income in their Annual Income Tax Return (BIR Form 1701). Withholding tax of 5% applies when the lessee is a company or government entity withholding creditable withholding tax on rental payments under BIR Revenue Regulations No. 2-98 as amended. Value Added Tax (VAT) at 12% applies if the lessor's annual gross rentals exceed PHP 3,000,000 under TRAIN Law (RA 10963).

The legal framework governing the Condominium Lease Agreement (Philippines) in Philippines draws on several key statutes and regulatory bodies. Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Parties executing a Condominium Lease Agreement (Philippines) in Philippines should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Rent Control Act (RA 9653) sets the foundational requirements.

A Condominium Lease Agreement Philippines is needed whenever a condominium unit is rented to a tenant.

Residential rental in Metro Manila condominiums: Unit owners in Makati CBD, Bonifacio Global City (BGC), Rockwell Center, Ortigas Center, and Quezon City high-rise buildings who lease their units to tenants — including expats, BPO professionals, and OFW families — need a formal Condominium Lease Agreement to protect both parties and comply with condominium house rules.

Rent Control Act compliance: Lessors renting units at or below PHP 10,000 per month in Metro Manila or PHP 5,000 in other areas must execute a written lease to document the agreed rent, security deposit (capped at two months' rent under RA 9653), and other terms — to evidence compliance with RA 9653 in the event of a complaint filed with the Housing and Land Use Regulatory Board (now DHSUD).

Foreign national tenants: Foreign nationals — diplomatic personnel, multinational company employees, and retirees holding Special Resident Retiree's Visa (SRRV) under the Philippine Retirement Authority — typically require a formal Condominium Lease Agreement for Bureau of Immigration compliance and for their company's housing allowance documentation.

Corporate housing: Philippine corporations and multinational companies leasing condominium units for executive housing execute Condominium Lease Agreements as the lessee-corporation, with withholding tax obligations on rental payments under BIR regulations.

Short-term and Airbnb-style leases: While most condominium corporations in Metro Manila have rules restricting short-term rentals (30 days or less), owners who obtain condominium board approval for transient use need a written lease agreement for each stay — compliance with the Tourism Act (RA 9593) and DOT accreditation requirements also apply.

Parties in Philippines should prepare a Condominium Lease Agreement (Philippines) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A valid Philippines Condominium Lease Agreement must include the following essential elements.

Parties: Full legal names, addresses, and TINs of the lessor (unit owner) and lessee (tenant). For corporate lessees, SEC registration and authorized signatory.

Unit Description: Building name, unit number, floor, tower (if applicable), barangay, city, and province. Condominium Certificate of Title (CCT) number of the unit.

Lease Term: Start and end date of the lease. Under Philippine law, a lease for a fixed term terminates on the agreed date without notice; a month-to-month lease requires 15 days' written notice to terminate.

Monthly Rent: Amount in Philippine Pesos (PHP), due date, and payment method. For RA 9653-covered units, the agreed rent must not exceed the Rent Control Act ceiling.

Security Deposit: Amount — Philippine practice is typically two months' rent as security deposit, plus one month advance rent. RA 9653-covered units: security deposit is capped at two months' rent. The deposit is refundable within one month after lease end, less lawful deductions for unpaid utilities and damages.

Condominium Association Dues: Whether dues are included in the rent or paid separately by the lessee, and the current monthly association dues amount.

Utilities: Who pays electricity (Meralco), water (Manila Water or Maynilad), cable, and internet.

House Rules: Lessee's obligation to comply with the condominium corporation's Master Deed, Declaration of Restrictions, and house rules — covering move-in requirements, guests, pets, noise, and subletting restrictions.

Prohibition on Alterations: Lessee may not make structural alterations to the unit without the lessor's and condominium board's written approval.

Notarization: Notarization is not legally required for lease agreements of one year or less, but recommended for agreements over one year — which must be in a public instrument under Civil Code Article 1358.

Additional compliance elements for a Condominium Lease Agreement (Philippines) used in Philippines include: Under Philippine law, the Civil Code of the Philippines (Republic Act No. 386) governs contractual obligations. The Revised Corporation Code (Republic Act No. 11232) regulates corporate entities through the Securities and Exchange Commission (SEC). The Labor Code of the Philippines (Presidential Decree No. 442) and Department of Labor and Employment (DOLE) govern employment matters. The Data Privacy Act of 2012 (Republic Act No. 10173) and the National Privacy Commission (NPC) protect personal data. The Bureau of Internal Revenue (BIR) administers tax obligations under the National Internal Revenue Code. Forms-legal.com provides this template as a starting point for Philippines-compliant documentation.