Commercial Lease Agreement

CONTRACT OF LEASE

KNOW ALL MEN BY THESE PRESENTS:

This Contract of Lease (the "Contract") is made and entered into at 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"

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

WITNESSETH THAT:

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

________

WHEREAS, the Property is located at the following address:

________

WHEREAS, LESSEE desires to lease the Property;

NOW THEREFORE, for and in consideration of the foregoing premises and the terms and conditions herein stipulated, the Parties agree as follows:

I. SUBJECT OF THE LEASE

LESSOR shall lease to LESSEE the entire Property, which shall hereinafter be referred to as the "Leased Premises". The Leased Premises equals ________ (________) Square Meters, more or less.

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 terms and conditions mutually agreed upon by the parties.

III. RENT

The rent shall be ________ (₱________) per month.

LESSEE shall pay the rent every 1st of the month in advance.

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

________

The rent is subject to withholding taxes which LESSEE shall deduct and withhold. However it does not include other taxes which may be levied or imposed such as but not limited to the Value Added Tax ("VAT") and Documentary Stamp Tax ("DST") which, if applicable, shall be for the account of LESSEE.

LESSEE shall remit the withholding tax to the Bureau of Internal Revenue on behalf of LESSOR in accordance to the applicable laws and regulations. LESSEE shall submit a copy of the Certificate of Remittance of the withholding tax to LESSOR within Five (5) Days from the payment of the tax.

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

IV. SECURITY DEPOSIT

LESSEE shall pay a Security Deposit of ________ (₱________) as guarantee for the full and faithful compliance of 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 can LESSEE demand that the same be used to fulfill any monetary obligation under this Contract.

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

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

V. USE OF THE LEASED PREMISES

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

________

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

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

VI. SERVICE AND UTILITIES

The lease shall include the following services and utilities :

________

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

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

VII. PARKING

LESSEE shall be entitled to use ________ (________) parking spaces.

VIII. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS

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

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

LESSEE shall not drive nails, screws, hooks, etc. 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 put in at the expense of LESSEE and 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 LESSOR without compensation to LESSEE.

IX. CARE OF THE LEASED PREMISES

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

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 LESSOR before the same is installed in the Leased Premises. LESSOR reserves the right to require LESSEE to remove any sign, advertisement, and display which LESSOR, in good faith, considers to be inappropriate or improper for the general appearance of the Property.

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

LESSEE shall be liable for all damages to the Leased Premises unless said damage occurred without the fault or negligence of LESSEE. Any damage shall be presumed to be caused by the fault or negligence of LESSEE unless the same was caused by fortuitous events, acts of God such as typhoons, earthquakes, etc., or other events that could not be foreseen or could not be reasonably prevented. LESSEE shall likewise be liable for damages arising from the fault or negligence of LESSEE's employees, customers, guests, visitors, or other persons that are on the Leased Premises as if the same arose out of LESSEE's own fault or negligence.

LESSEE shall repair any damage to the Leased Premises within thirty (30) days from the occurrence of the damage. Failure to do so shall be considered a breach of this Contract which shall entitle LESSOR to terminate the lease.

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

LESSOR shall undertake any major and extraordinary repairs which are related to those which affect the structure of the Leased Premises. LESSEE shall allow access to LESSOR to the Leased Premises for the purpose of renovations, repairs, or other work on the Leased Premises. LESSOR shall not be liable to pay any compensation or claims by reason of any inconvenience or annoyance to LESSEE by reason of said renovations, repairs, or other works provided that the same does not unreasonably prevent LESSEE from using the Leased Premises for the purposes provided in this Contract.

X. DANGEROUS AND HAZARDOUS MATERIAL

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 LESSOR is obtained and proof of adequate insurance protection is presented by LESSEE to LESSOR. Any increase in insurance payable by LESSOR from the storage of any said material, article, or thing shall likewise be for the account of LESSEE.

XI. DAMAGE TO THE LEASED PREMISES

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

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

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

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

XII. PROPERTY INSURANCE

LESSOR and LESSEE shall each maintain appropriate insurance for their respective interests in the Leased Premises and property located in the Leased Premises. LESSEE's insurance shall be in an amount equal to the maximum insurable thereof with such insurance company or companies that are reasonably satisfactory to LESSOR. LESSOR shall be added as the joint beneficiary to any such insurance policy and said policy shall be assigned and delivered to LESSOR within Thirty (30) Days from the date of this Contract. 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 LESSOR within Thirty (30) Days from the date of this Contract.

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XV. QUIET ENJOYMENT

LESSEE shall have the right to the enjoyment and peaceful possession of the Leased Premises during the period of the lease without interruption from LESSOR or any person claiming under him provided that LESSEE complies with all the terms, provisions, and conditions of this Contract.

XVI. LATE PAYMENT OF RENT

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

XVII. ABANDONMENT OF LEASED PREMISES

LESSEE shall be considered 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 LESSEE fails to pay the corresponding rent for the said period. Upon such abandonment, LESSOR shall have the right to lease the Leased Property to other persons or organizations and LESSEE shall continue to pay rent for the Leased Property until a new lessee has been found for the Leased Premises. The Security Deposit shall likewise be forfeited in favor of LESSOR by way of damages.

Further, LESSEE hereby empowers LESSOR and/or LESSOR's authorized representatives, to padlock, open, enter and occupy the LEASED PROPERTY and take an inventory of LESSEE's properties in the presence of a peace officer, barangay official or notary public. LESSEE also authorizes and empowers LESSOR and/or LESSOR's authorized representatives to take full control and possession of the LEASED PROPERTY and to remove and store LESSEE's properties at LESSEE's cost. LESSEE also authorizes LESSOR to retain LESSEE's properties as security for the payment of LESSEE's obligations and dispose of the same, the proceeds thereof will be applied to satisfy LESSEE's unpaid obligations under this Contract without prejudice to any appropriate action which LESSOR may take to recover any deficiency.

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

XVIII. EARLY TERMINATION

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

XIX. CONDEMNATION AND EXPROPRIATION

LESSEE shall peacefully deliver the Leased Premises or any portion thereof to 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. LESSEE shall not have any claim or be entitled to any compensation or indemnity from LESSOR by reason of such expropriation or condemnation.

XX. DEFAULT BY LESSOR

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

XXI. DEFAULT BY LESSEE

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

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

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

XXII. NOTICE OF TERMINATION

If one party is in default, the other party may terminate this lease judicially or extra-judicially. It is sufficient to send a Fifteen (15) Day written notice of the intention to terminate the lease in order to terminate the lease extra-judicially, without prejudice to the claims for any and all damages resulting from such default or termination.

XXIII. RETURN OF LEASED PROPERTY

Upon the termination or expiration of the lease for any cause, LESSEE shall, without need of demand, immediately vacate and peacefully and completely surrender the Leased Property to LESSOR in a good and habitable condition, save for the 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 LESSOR with the Leased Premises without compensation to LESSEE.

If LESSEE fails to vacate and surrender the Leased Premises upon the termination or expiration of the lease, for any reason such as but not limited to default or the end of the lease period, LESSEE hereby empowers LESSOR and/or LESSOR's authorized representatives, to open, enter and occupy the Leased Premises and take an inventory of LESSEE's properties in the presence of a peace officer, barangay official or notary public. LESSEE also authorizes and empowers LESSOR and/or LESSOR's authorized representatives to take full control and possession of the Leased Premises and to remove and store LESSEE's property or any equipment, furniture, etc. found at the Leased Premises at LESSEE's cost. If LESSEE or other owners thereof fail to collect the property, equipment, furniture, etc. and to settle all liabilities to LESSOR, LESSEE authorizes and empowers LESSOR to dispose of the same, the proceeds thereof will be applied to satisfy LESSEE's unpaid obligations under this Contract without prejudice to any appropriate action which LESSOR may take to recover any deficiency.

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

XXIV. HOLDOVER

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

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

XXV. RENEWAL OF CONTRACT OR EXTENSION OF LEASE

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

Failure of LESSEE to give the written notice of their intention to renew the lease within Ninety (90) Days or a failure to agree on terms and conditions for the renewal or extension of the lease at least Sixty (60) Days before the end of the Lease entitles LESSOR to show the Leased Premises to prospective lessees in the manner provided above and, if proper, to hand a "For Rent" sign on the Leased Premises.

XXVI. INDEMNITY REGARDING USE OF PREMISES

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

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

XXVII. SUBLEASE AND ASSIGNMENT

This Contract shall not be assigned and Leased Premises shall not be subleased without the written consent of LESSOR.

XXVIII. WAIVER

Failure of either party to insist, in one or more instances, the strict performance of any of the terms of this Contract, or to exercise any portion herein contained, shall thereafter not be construed as abandonment or cancellation or waiver of such term. No waiver shall be deemed to have been made unless expressed in writing and signed by LESSOR or 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.

XXIX. NOTICES

All written notices may be sent by registered mail or personal delivery. All written notices by LESSOR shall be considered received on the date of the actual receipt by LESSEE or LESSEE's authorized representative. If LESSEE or LESSEE's authorized representative refuse to receive the said written notices or if LESSEE or LESSEE's authorized representative cannot be found on the Leased Premises, the written notice shall be considered received by LESSEE on the date of the posting of the written notice on the main entrance to the Leased Premises.

XXX. COUNTERPARTS

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

XXXI. REPRESENTATION OF LESSEE

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

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XXXIII. CUMULATIVE RIGHTS

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

XXXIV. SUCCESSORS AND ASSIGNS

This Contract shall be binding on the successors and assigns of both Parties.

XXXV. HEADINGS

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

XXXVI. ENTIRETY OF AGREEMENT

This Contract represents the entire agreement between LESSOR and LESSEE and supersedes all prior negotiations, representations, agreements, either 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 stated above.

________
Lessor

________
Lessee

ACKNOWLEDGEMENT

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 constituting of _________ pages, including this page where the Acknowledgement 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 place first written above.

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