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Commercial Lease Assumption Agreement for Philippines

Commercial Lease Assumption Agreement Template for Philippines

This document facilitates the transfer of rights and obligations under an existing commercial lease from one tenant to another in the Philippines, subject to the landlord's consent. It outlines the terms and conditions of the assumption, including the responsibilities of all parties, financial obligations, security deposit arrangements, and compliance requirements under Philippine law. The agreement ensures compliance with the Civil Code of the Philippines and relevant property laws while protecting the interests of the landlord, original tenant, and new tenant throughout the assumption process.

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What is a Commercial Lease Assumption Agreement?

The Commercial Lease Assumption Agreement is a crucial document used in the Philippines when a business needs to transfer its lease obligations to another party. This typically occurs during business acquisitions, downsizing, expansions, or when a tenant needs to exit a lease agreement before its natural termination. The document, governed by Philippine law including the Civil Code and relevant property regulations, ensures a smooth transition of lease rights and obligations while protecting all parties' interests. It includes detailed provisions about the assumption of responsibilities, financial obligations, security deposits, and compliance requirements. The agreement requires careful consideration of local commercial property laws, tax implications, and registration requirements, making it essential for businesses engaging in commercial property transitions in the Philippines.

What sections should be included in a Commercial Lease Assumption Agreement?

1. Parties: Identification of all parties: Landlord, Original Tenant (Assignor), and New Tenant (Assignee), including their complete legal names and addresses

2. Background: Recitals explaining the existing lease arrangement, the parties' desire to transfer the lease, and any relevant context

3. Definitions: Definitions of key terms used throughout the agreement, including 'Original Lease', 'Premises', 'Effective Date', and 'Assumption Date'

4. Assignment and Assumption: Core provision where Assignor transfers and Assignee accepts all rights, obligations, and liabilities under the Original Lease

5. Landlord's Consent: Express consent of the Landlord to the assignment and any conditions attached to such consent

6. Effective Date and Term: Specification of when the assumption takes effect and its duration

7. Representations and Warranties: Statements by each party regarding their authority, capacity, and other relevant matters

8. Original Tenant's Obligations: Ongoing responsibilities of the Original Tenant, including any continuing liability

9. New Tenant's Obligations: Specific obligations assumed by the New Tenant, including compliance with lease terms

10. Security Deposit: Handling and transfer of the existing security deposit or arrangement for a new one

11. Governing Law: Specification of Philippine law as governing law and relevant jurisdiction

12. Execution: Signature blocks for all parties and notarization requirements

What sections are optional to include in a Commercial Lease Assumption Agreement?

1. Guarantees: Required when there are existing or new lease guarantees to be addressed

2. Broker Provisions: Include when real estate brokers are involved in the transaction

3. Improvements and Fixtures: Needed when there are specific arrangements regarding existing tenant improvements

4. Environmental Matters: Include for properties with potential environmental concerns or specific requirements

5. Assignment Conditions: Additional conditions specific to the assignment when required by the Landlord

6. Insurance Requirements: Specific insurance obligations when different from the original lease or requiring special mention

7. Dispute Resolution: Optional alternative dispute resolution procedures if parties want to specify mediation or arbitration

What schedules should be included in a Commercial Lease Assumption Agreement?

1. Schedule A - Original Lease: Copy or summary of the original lease agreement and any amendments

2. Schedule B - Premises Details: Detailed description of the leased premises, including floor plans if applicable

3. Schedule C - Rent Schedule: Current and future rent obligations, including any escalations

4. Schedule D - Security Deposit Details: Specifics of security deposit transfer or replacement arrangements

5. Schedule E - Outstanding Obligations: List of any outstanding obligations or liabilities under the original lease

6. Appendix 1 - Consent Requirements: Specific requirements from the Landlord for providing consent to the assumption

7. Appendix 2 - Condition Report: Current condition of the premises at the time of assumption

Authors

Alex Denne

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

Jurisdiction

Philippines

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions






























Clauses






























Relevant Industries

Real Estate

Retail

Commercial Property

Hospitality

Office Space

Industrial

Manufacturing

Warehousing

Food and Beverage

Healthcare

Professional Services

Technology

Banking and Finance

Education

Relevant Teams

Legal

Real Estate

Finance

Operations

Facilities Management

Risk and Compliance

Corporate Development

Property Management

Business Development

Asset Management

Relevant Roles

Real Estate Manager

Property Manager

Legal Counsel

Corporate Lawyer

Chief Financial Officer

Facilities Manager

Business Development Manager

Operations Director

Commercial Lease Administrator

Risk Manager

Compliance Officer

Real Estate Broker

Property Development Manager

Asset Manager

Finance Director

Chief Operating Officer

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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