Guide to Leasing Commercial Real Estate in the Philippines

Whether you feel you could take care of leasing a commercial space for the business or need a hand of a real estate licensed broker, there is basically some work to do after successfully picking a location. We offer insights to answer the most frequently asked questions when leasing a real estate commercial space in the Philippines.

1. Submission of Letter of Intent

In the process of leasing a business space, the first step after inquiry and viewing is the submission of Letter of Intent (LOI). The letter does not entail a commitment but rather serves as an official declaration of interest by the lessee towards a specific premise.

2. Lease Offer for the Provision of Real Estate Office Space

Upon receipt of the Letter of Intent, the lessor will send an official lease offer to the lessee. An offer must indicate rates, dues, payment terms or any additional terms of agreement that will then be signed by the lessee once approved. Note that the signatory detailed in the lease offer should be the same signatory listed in the real estate leased contract.

3. Submission of Tenant Documents

Below is a consolidated basic listings of documentation required for business leasing in the Philippines. The requirements may be different though for start up companies and companies without SEc registration yet. The following list will need to be followed up later on after SEC has been approved.

a. SEC Registration

b. Business Permit

c. Articles of Incorporation (whatever is applicable)

d. By-Laws

e. Latest General Information Sheet

f. Latest Financial Statement

g. Secretary’s Certificate authorizing the lease w/ the specific Bank premises & designated signatory/ies

h. Copy of government issued ID of the signatory of the tenant

i. Tenant Information Sheet (Company)

j.Company Profile (if available)

k.BIR Documents

- BIR Form 2303 – Registration Certificate

- BIR Form 1921 – Authority to Print receipt

l. PEZA Certificate (if PEZA registered)

4. Advance Payment and Security Deposit

It is important that the check payments are directly addressed to the lessor.

5. Signing Of Contract

Typically, a lessee can request for a draft contract from lessor to review. Once the lessee approves, the lessor will print and send back an original copy for signing. It is advisable that the signatory resides in the Philippines, otherwise, notarization and consularization backs up the contract signing.

6. Documents Required From Lessor

The lessor may provide the following documents (before or after the payment has been made) within the time frame required by the lessee as dictated by the company policy's flexibility.

a. Floor Plan

b. Fit-out Guidelines (Lessee needs to submit a fit-out plan to LESSOR for approval)

c. Building Rules and Regulation

d. As-Built Plans

- Architectural

- Mechanical

- Electrical

- Plumbing

7. Notarization of Contract

After signing of signatories by both parties (LESSEE and LESSOR), the LESSOR will have the documents notarized. This may take a couple of weeks.

8. Turn-over of Key

The official turnover of the unit occurs after payment has been made (typically after the signing of lease offer). On or before the day of turnover, the lessee will be assisted by the lessor or a representative to do final checking of the premise. Typically, a checklist is provided by lessor verifying the space and fixtures (e.g a/c units, etc) in good condition.