Lease Agreement With Option To Purchase (Real Estate) Template for Philippines

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Key Requirements PROMPT example:

Lease Agreement With Option To Purchase (Real Estate)

"I need a Lease Agreement with Option to Purchase (Real Estate) for a commercial property in Manila's business district, with a 2-year lease term starting March 1, 2025, monthly rent of 150,000 PHP, and an option to purchase at 25,000,000 PHP exercisable after the first year."

Document background
The Lease Agreement With Option To Purchase (Real Estate) is a specialized legal instrument used in the Philippines when parties wish to combine a property lease with a future purchase opportunity. This document is particularly useful in situations where a potential buyer wishes to occupy and use a property immediately but prefers or needs to defer the purchase to a later date, whether for financial, strategic, or other reasons. The agreement must comply with Philippine property laws, including the Civil Code of the Philippines, Real Estate Service Act, and local government regulations. It typically includes comprehensive details about the property, lease terms, purchase option conditions, payment structures, and the specific requirements for exercising the purchase option. This type of agreement provides flexibility for both parties while establishing clear legal frameworks for both the lease period and the potential sale transaction.
Suggested Sections

1. Parties: Identification of the Lessor/Seller and Lessee/Potential Buyer with complete details as required under Philippine law

2. Background: Context of the agreement, including brief description of the property and parties' intentions regarding lease and potential purchase

3. Definitions: Definitions of key terms used throughout the agreement

4. Property Description: Detailed description of the leased property, including exact location, boundaries, and improvements

5. Lease Terms: Duration of lease, rental amount, payment terms, and frequency

6. Security Deposit: Amount, terms, and conditions for the security deposit

7. Utilities and Maintenance: Responsibilities for utilities, repairs, and maintenance of the property

8. Use of Property: Permitted and prohibited uses of the property

9. Option to Purchase: Terms and conditions of the purchase option, including purchase price and option period

10. Exercise of Option: Process and requirements for exercising the purchase option

11. Payment Terms for Purchase: Purchase price, payment structure, and terms if option is exercised

12. Title and Documentation: Requirements for transfer of title and necessary documentation

13. Representations and Warranties: Declarations by both parties regarding their authority, the property's condition, and legal status

14. Default and Remedies: Events of default under both lease and purchase provisions, and corresponding remedies

15. Termination: Conditions and process for termination of the agreement

16. Governing Law: Specification of Philippine law as governing law and relevant jurisdictional provisions

17. General Provisions: Standard contractual provisions including notices, amendments, and severability

Optional Sections

1. Property Management: Required when the property is part of a managed complex or subdivision, detailing compliance with property management rules

2. Agricultural Provisions: Required when the property includes agricultural land, incorporating requirements under the Agricultural Land Reform Code

3. Mortgage Provisions: Required when the property is mortgaged, addressing existing encumbrances and requirements for discharge

4. Broker Provisions: Required when real estate brokers are involved, detailing their roles and commissions

5. Construction and Improvements: Required when the lessee is permitted to make improvements or modifications to the property

6. Environmental Compliance: Required for properties in environmentally sensitive areas or with specific environmental requirements

7. Special Tax Provisions: Required when there are unique tax considerations or arrangements between the parties

8. Sublease Provisions: Required if subletting is permitted, detailing conditions and requirements

Suggested Schedules

1. Property Details Schedule: Detailed technical description of the property, including lot number, boundaries, and technical specifications

2. Rental Payment Schedule: Detailed breakdown of rental payments, including escalation rates if applicable

3. Purchase Price Computation: Breakdown of the purchase price, including any adjustments based on rental payments made

4. Property Condition Report: Detailed assessment of the property's condition at the start of the lease

5. Permitted Improvements Schedule: List of improvements that the lessee is authorized to make to the property

6. Required Insurance Schedule: Details of insurance requirements for both lease and purchase phases

7. Property Title Documents: Copies of relevant property title documents and certificates

8. Tax Certificates: Copies of relevant tax declarations and certificates

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Property Development

Commercial Property

Residential Property

Agriculture (for agricultural land)

Retail

Industrial

Hospitality

Office Space

Manufacturing

Logistics

Healthcare

Education

Relevant Teams

Legal

Real Estate

Facilities Management

Finance

Operations

Compliance

Risk Management

Property Management

Asset Management

Business Development

Investment

Corporate Affairs

Relevant Roles

Real Estate Manager

Property Manager

Legal Counsel

Corporate Lawyer

Real Estate Broker

Facilities Manager

Asset Manager

Chief Financial Officer

Business Development Manager

Operations Director

Compliance Officer

Risk Manager

Contract Administrator

Real Estate Development Director

Investment Manager

Property Acquisition Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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