In the Philippines, residential leasing is governed primarily by the Civil Code of the Philippines (on Lease) and Republic Act No. 9653, also known as the Rent Control Act of 2009 (which has been extended through various resolutions by the Human Settlements Adjudication Commission).

A well-drafted residential tenancy agreement is a vital document that protects both the lessor (landlord) and the lessee (tenant) from future disputes. Below are the legal requirements and essential clauses necessary for a robust contract.

1. Statutory Requirements and Formalities

Under Philippine law, a lease agreement for a period longer than one year must be in writing to be enforceable under the Statute of Frauds. However, even for shorter terms, a written contract is standard practice.

Parties to the Contract: The full names, nationalities, and addresses of both the lessor and the lessee must be specified.
Object of the Lease: A technical or specific description of the property (e.g., Unit Number, Building Name, Street Address, and TCT Number if applicable).
Consent and Capacity: Both parties must be of legal age (18+) and possess the legal capacity to enter into a contract.
Notarization: While a private signed contract is binding, notarizing the document converts it into a public instrument. This allows the contract to be admissible in court without further proof of its authenticity and serves as a notice to third parties.

2. Essential Clauses for Residential Agreements

A. The Term of Lease

The contract must define the "habendum" or the duration of the stay. It should specify the commencement date and the expiration date.

Fixed Term: Provisions should state whether the lease is renewable and under what conditions (e.g., "Mutual agreement of both parties expressed in writing 30 days prior to expiry").
Tacit Renewal: Under the Civil Code (Art. 1670), if the lessee continues enjoying the thing leased for 15 days after the fixed term with the acquiescence of the lessor, there is an implied new lease (tacita reconduccion) on a month-to-month basis.

B. Rental Rate and Escalation

The contract must clearly state the monthly rental fee and the currency (typically Philippine Pesos).

Rent Control Compliance: For units within the coverage of the Rent Control Act (based on specific rent thresholds in Metro Manila and other highly urbanized cities), the lessor cannot increase the rent by more than the percentage allowed by the law annually.
Escalation Clause: For high-end residential units not covered by the Rent Control Act, a clause may stipulate a fixed percentage increase in rent starting on the second year.

C. Security Deposit and Advance Rent

This is one of the most litigated areas of Philippine leasing.

Advance Rent: Usually limited to one or two months, applied to the last months of the lease.
Security Deposit: Standard practice is two months' rent. Under the law, this is held to answer for unpaid utility bills or damages to the property beyond "ordinary wear and tear."
Refund Policy: The contract should specify the timeframe for returning the deposit (e.g., 30 to 60 days after the tenant vacates) to allow for the settlement of final utility bills.

D. Use of the Premises

The "Purpose" clause must explicitly state that the property is for residential use only. This prevents the tenant from turning the home into an office, retail shop, or "staff house" without the owner’s consent, which could lead to zoning violations or higher tax assessments.

E. Repairs and Maintenance

The Civil Code distinguishes between types of repairs:

Lessor’s Obligations: The landlord is generally responsible for "extraordinary repairs" and those necessary to keep the property fit for the use intended (e.g., fixing structural leaks, major plumbing, or electrical failures).
Lessee’s Obligations: The tenant is usually responsible for "minor repairs" or those caused by daily use (e.g., replacing light bulbs, faucet washers, or damage caused by negligence).

F. Prohibitions on Subleasing

Article 1650 of the Civil Code states that if the contract does not expressly prohibit subleasing, the lessee may sublet the property. Therefore, most Philippine contracts include a strict prohibition against subleasing or assigning the lease rights to a third party without the written consent of the lessor.

G. Utility Charges and Homeowners' Association (HOA) Dues

The agreement must clarify who is responsible for:

Electricity and Water bills.
Internet and Cable TV.
Monthly HOA/Condominium Dues.
Real Property Taxes (usually the lessor's responsibility).

H. The "Default" and Termination Clause

This clause defines what constitutes a "substantial breach" (e.g., non-payment of rent for two months, violation of house rules). It should include:

Grace Period: The number of days after the due date before a penalty is applied.
Penalties: Late payment interests or surcharges.
Judicial Relief: A statement that the lessor has the right to extra-judicially terminate the contract and re-enter the premises upon a specific period of notice in case of default.

3. Grounds for Judicial Ejectment

Under the Rent Control Act and the Rules of Court, a lessor may legally eject a tenant based on the following:

Expiration of the period of the lease.
Non-payment of rent for a total of three (3) months.
Legitimate need of the owner/lessor to repossess the property for their own use or for the use of an immediate family member (subject to notice requirements).
Need of the lessor to make necessary repairs to the leased premises which is the subject of an order of condemnation by appropriate authorities.
Subleasing the unit without written consent.

4. Summary of Prohibited Acts

Self-Help Eviction: A landlord cannot forcibly eject a tenant, cut off utilities, or padlock the door without a court order (Unlawful Detainer case).
Excessive Deposits: Demanding more than what the law allows for units covered by rent control.