The Construction Lease Agreement is a specialized legal instrument used in the Philippines when a tenant requires both property access and construction rights. This document is particularly relevant for commercial, industrial, or retail developments where the tenant needs to perform substantial construction work or modifications to the leased property. It combines traditional lease provisions with detailed construction requirements, ensuring compliance with the Civil Code of the Philippines, the National Building Code, and local government regulations. The agreement protects both the property owner's interests in their asset and the tenant's rights to develop the property for their intended use. A Construction Lease Agreement typically includes comprehensive terms covering construction specifications, timelines, quality standards, permits, insurance requirements, and the allocation of risks and responsibilities between parties. It's commonly used in shopping center developments, industrial facility construction, and commercial property improvements where the tenant is responsible for significant structural modifications.
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1. Parties: Identification of the Lessor (property owner) and Lessee (construction entity), including complete legal names, addresses, and registration details
2. Background: Context of the agreement, including property description and intended construction purpose
3. Definitions: Definitions of key terms used throughout the agreement, including technical construction terms
4. Lease Term and Renewal: Duration of the lease, commencement date, and renewal provisions
5. Rent and Payment Terms: Rental amount, payment schedule, security deposit, and other financial obligations
6. Construction Rights and Obligations: Scope of permitted construction work, timelines, and quality standards
7. Permits and Approvals: Requirements for obtaining necessary construction permits and governmental approvals
8. Use of Premises: Permitted use of the property during and after construction
9. Insurance and Liability: Required insurance coverage and allocation of risks
10. Maintenance and Repairs: Responsibilities for maintaining the property and constructed improvements
11. Default and Remedies: Events of default and corresponding remedies for both parties
12. Termination: Grounds for termination and post-termination procedures
13. Governing Law and Dispute Resolution: Application of Philippine law and dispute resolution mechanisms
1. Environmental Compliance: Required when the construction project needs environmental clearances or has significant environmental impact
2. Heritage Site Provisions: Included when the property is near or within a heritage zone requiring special considerations
3. Subletting and Assignment: Included when the parties want to allow or restrict subletting rights
4. Force Majeure: Detailed provisions for handling natural disasters or unexpected events affecting construction
5. Utilities and Services: Included when specific arrangements for utilities during construction need to be addressed
6. Labor Requirements: Required when specific labor-related obligations need to be imposed on the construction
7. Staging Area Rights: Included when additional areas are needed for construction equipment and materials
1. Schedule A - Property Description: Detailed legal description of the property including boundaries and existing structures
2. Schedule B - Construction Plans: Architectural drawings, engineering plans, and construction specifications
3. Schedule C - Construction Timeline: Detailed construction schedule with milestones and completion dates
4. Schedule D - Rent Schedule: Detailed breakdown of rent payments and escalation terms
5. Schedule E - Required Insurance: Specific insurance requirements and coverage amounts
6. Appendix 1 - Building Permits: Copies of approved building permits and related documentation
7. Appendix 2 - Environmental Clearances: Copies of environmental permits and compliance certificates
8. Appendix 3 - Technical Specifications: Detailed technical requirements for construction materials and methods
Relevant legal definitions
Clauses
Relevant Industries
Real Estate
Construction
Commercial Property Development
Industrial Development
Infrastructure
Retail Development
Manufacturing
Hospitality
Warehousing and Logistics
Education (for school construction)
Healthcare (for medical facility construction)
Relevant Teams
Legal
Real Estate
Construction
Operations
Facilities Management
Risk and Compliance
Finance
Property Management
Project Development
Architecture
Engineering
Procurement
Environmental Health and Safety
Relevant Roles
Real Estate Manager
Construction Project Manager
Property Development Director
Legal Counsel
Chief Operations Officer
Facilities Manager
Property Manager
Commercial Lease Administrator
Risk Manager
Compliance Officer
Development Director
Architecture Manager
Engineering Director
Contract Administrator
Chief Financial Officer
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