Condo Rental Transaction Checklist – Philippines (A practitioner-focused legal guide, updated to 24 June 2025)
This material is for educational purposes only and does not create a lawyer-client relationship. For transactions of significant value, always seek personalized legal advice.
1. Governing Legal Sources
| Primary Statute | Key Points for Condo Rentals |
|---|---|
| Condominium Act – Rep. Act No. 4726 (1966, as amended) | Defines condominium ownership; integrates Master Deed and By-laws into every lease. |
| Civil Code of the Philippines (Arts. 1654-1688, 1305-1390) | General law on leases: obligations, repairs, causes for termination. |
| Rent Control Act of 2009 – RA 9653 as repeatedly extended (most recently by RA 11571, in force until 31 Dec 2027*) | Caps deposits/advances; limits annual rent increases for units ≤ ₱15,000/month in NCR (₱10,000 elsewhere) to 5 %; summary eviction rules. (Check for future extensions beyond 2027.) |
| National Building Code IRR & Occupancy Permit rules | Requires valid Certificate of Occupancy before leasing. |
| Anti-Dummy Law & Foreign Investment Act | Foreigners may lease any length, may own up to 40 % of condo corp. but cannot control it. |
| Local Government Code & City/Municipal Revenue Codes | Business permit for “leasing of real property”; annual Mayor’s permit fees. |
| Tax Code (NIRC), Revenue Regs. 4-97, 16-2003, 12-2024 | Income tax; VAT or 12 %/8 % percentage tax tests; DST on leases: ₱3.00 for the first ₱2,000 of rent per year + ₱1.00 for every additional ₱1,000 (Section 195). |
| Data Privacy Act – RA 10173 | Requires privacy notice & consent for IDs, bank info, CCTV. |
| Baranggay Justice System Act – RA 7160 ch. VII | Mandates katarungang pambarangay mediation for ejectment claims ≤ ₱100k (unless corporation-related). |
2. Due-Diligence Checklist (Before Signing)
| Item | Why It Matters | Documentary Proof |
|---|---|---|
| Title Verification | Confirms ownership & liens | Certified True Copy of Condominium Certificate of Title (CCT); Tax Declaration |
| Authority to Lease | If owner is abroad/company | SPA (consularized/apostilled); Board Resolution & Secretary’s Cert. |
| Building House Rules | Restrictions on pets, AirBnB, smoking, alterations | Latest HOA circular or Condo Corp. Rules |
| Real Property Tax & Dues | Unpaid dues pass to tenant in practice | Latest RPT Official Receipt; Statement of condo dues |
| Occupancy Permit | Required by NBC | Copy issued by Office of the Building Official |
| Energy-Efficiency, Fire & Safety Certificates | Needed for insurance, PEZA renters | Bureau of Fire Protection (BFP) FSIC; DOE compliance |
| ID & Financial Capacity of Tenant | KYC, default risk | Government ID; proof of income/employment; post-dated cheques (PDCs) or digital payment mandate |
| Diplomatic Permit (if foreign) | Some LGUs require | Visa page; ACR I-Card; condo corp. clearance |
3. Contract Drafting Essentials
Parties & Authority Full legal names, marital status; attest SPA details for representatives.
Premises Description Exact unit no., floor, tower, parking slot (if any), floor area per CCT.
Use Clause Residential, home-office, BPO seat lease, AirBnB prohibition, pet policy.
Term & Possession Start/End dates; early-occupancy; holding-over rate (often 150 % of last rent).
Rent & Escalation
- Monthly base rent (inclusive/exclusive of VAT).
- Escalation formula – common: 5 % per year or CPI-linked, but observe RA 11571 cap where applicable.
- Mode: PDCs, online bank transfer, PESONet, GCash.
- Creditable Withholding Tax (CWT): if tenant is corporation, it must withhold 5 % (BIR Form 1601-EQ).
Deposits & Advances
- Statutory limit: ≤ 2 months deposit + 1 month advance for covered units.
- How & when deposit is refunded (within 30 days from turnover, net of utilities).
Utilities & Condo Dues
- Metered electricity/water billed to tenant.
- Tenant often pays association dues; clarify special assessment pass-through.
Repairs & Alterations
- Landlord: structural & major systems.
- Tenant: minor repairs ≤ ₱5,000; no drilling of RC walls without consent.
- Restoration clause at end of lease.
Compliance With House Rules & Government Requirements
- Curfew, garbage segregation, move-in/move-out fees.
- Obtain Move-In Permit from Property Management Office (PMO).
Insurance
- Landlord insures structure; tenant may secure renters’ insurance for contents and ₱1 million public liability.
No Sub-Lease / Airbnb Clause
- Sub-lease only with written consent; breach = ground for ejectment.
Default & Remedies
- Grace period: 15 days for rent delay (Civil Code Art. 1657).
- Landlord lien on movables? Include express acknowledgment to avoid accion replevin.
- Ejectment via Rule 70 unlawful detainer; barangay mediation requirement.
Early Termination
- Mutual convenience exit with notice (30-60 days) and penalty (e.g., one month rent forfeiture).
- Force majeure & Constructive eviction (water leak, fire).
Registration & Stamp Taxes
- Register with Registry of Deeds if term > 1 year (Sec. 53, Property Reg. Code) – protects the tenant against third parties.
- DST filing (BIR Form 2000) within 5 days after month of signing.
Dispute Resolution & Venue
- Preferred: arbitration under Philippine Dispute Resolution Center (PDRCI) or standard RTC venue clause.
- If value ≤ ₱400k, MTC has jurisdiction.
4. Move-In & Turnover Protocol
| Stage | Landlord Deliverables | Tenant Deliverables |
|---|---|---|
| Pre-Turnover Inspection | Punch-list report; meter readings | Sign acceptance; request rectification |
| Key Handover | 2 sets of keys/access cards; remote controls | Photo documentation |
| Utilities Transfer / Deposit | Endorse letter to Meralco, Maynilad, Globe | Security deposit & PDCs |
| PMO Registration | Clearance letter; fire exit briefing | Tenant data sheet; ID photos |
| Inventory List | Furniture, appliances, serial numbers | Co-sign and attach to lease |
5. During Tenancy – Compliance Matrix
| Obligation | Landlord | Tenant |
|---|---|---|
| Real Property Tax | Pay annually (Q1 to avoid penalties) | — |
| Condo Dues (if agreed) | — | Pay monthly to PMO |
| Routine Maintenance | Service AC quarterly | Allow access, bear cost if misuse |
| Visitor Management | Provide visitor’s log template | Pre-register guests |
| Data Privacy | Secure IDs, delete after 1 year per DAO 2022-01 | Provide consent |
6. End-of-Lease Checklist
Notice – at least 30 days (or per contract).
Joint Inspection – compare with initial inventory; note damages.
Utility Closures – secure final bills & receipts.
Return of Deposit – within 30 days less:
- unpaid rent, dues, utilities
- repair costs (normal wear excluded)
Release & Quitclaim – mutual signing to avoid future claims.
Cancellation of Registration (if lease annotated).
7. Tax & Regulatory Compliance for Lessor (Quick Reference)
| Thresholds | Consequence |
|---|---|
| Gross rent ≤ ₱3 million/yr (individual) | Elect 8 % flat income tax in lieu of graduated + percentage tax (Sec. 24(A)(2)(b)). |
| > ₱3 million turnover | VAT-registered at 12 %. |
| Withholding | 5 % CWT withheld by corporate tenants; indiv. tenants exempt. |
| DST | File & pay annually if multi-year lease. |
| Mayor’s Permit | Renewal every January; penalties for late filing. |
8. Special Situations
- Foreign Tenants – A lease can run 25 years + 25-year renewal (Civil Code Art. 1306 & jurisprudence). Report to BI if stays ≥ 59 days.
- Short-Term (<30 data-preserve-html-node="true" days) Rentals – Check city ordinances (e.g., Makati Ord. No. 2018-19 requiring DOT accreditation).
- Rent Control Coverage Lost – Once rent surpasses ₱15 k (NCR), unit exits coverage permanently; deposit/advance limits still persuasive best practice.
- COVID-19 or Comparable Emergencies – Republic Acts 11469/11711 granted moratoria; future states of calamity may suspend evictions.
9. Practical Drafting Tips & Red-Flag Clauses
| Red Flag | Why Problematic | Safer Replacement |
|---|---|---|
| “Deposit automatically forfeited for any early termination.” | Void if unconscionable penalty (Art. 1229, Civil Code). | Graduated penalty (e.g., deposit forfeited only if termination within first half of term). |
| “Tenant liable for all damages of any kind.” | Violates Art. 1171; must be limited to foreseeable damages. | Limit to direct damages; exclude force majeure. |
| “Landlord may enter anytime without notice.” | Violates right to privacy (Constitution; Data Privacy Act). | 24-hour written notice, except emergencies. |
10. Timeline At-A-Glance
- T-14 to T-7 days – Title & authority verification, negotiate heads of terms.
- T-6 to T-1 days – Draft contract; pay DST & register if > 1 year.
- Day 0 – Sign lease; release keys after deposit/PDCs.
- Within 5 days of signing – BIR DST filing / eDST payment.
- Monthly/Quarterly – DSS, CWT remittance, rent receipts (BIR Form 2307).
- 30 days pre-expiry – Renewal or non-renewal notice.
- 0-30 days post-turnover – Deposit refund; Release & Quitclaim.
11. Commonly Overlooked Costs
- Move-in/move-out fees (₱2-10k) charged by PMOs.
- Car-parking slot rent taxed separately if titled independently.
- Air-conditioning cleaning (every 3 months, ₱1-2k/unit).
- Association “special assessments” for façade repainting or elevator overhaul.
- Insurance riders when premises used for home-office.
12. Future Legislative Watchlist
- Proposed Residential Tenancy Act – would unify Civil Code & Rent Control statutes; draft bills seek rent-increase formula based on CPI + 2 %.
- E-Contracts & e-Notarization Bill – expected to recognize blockchain-registered leases and e-stamping for DST.
- Revised Condominium Act – proposals to increase foreign ownership cap in central business districts.
13. Final Takeaways
Treat a condo lease like a miniature M&A deal: verify title, allocate risks clearly, and comply with tax filings. A concise, properly-registered contract—reflecting Rent Control limits, condo-corp rules, and tax obligations—minimizes disputes, protects both parties, and preserves the value of the unit.
Checklist mantra: Title ✚ Authority ✚ Tax Compliance ✚ House Rules ✚ Clear Contract ✚ Recorded Termination. Follow these six and your Philippine condo rental should withstand both legal scrutiny and practical realities.