Is there a maximum term for leases? Can these be extended?
Lease of private land to Philippine citizens and corporations that are at least 60% owned by Philippine citizens, as well as lease of any other type of real property (except public land) to Philippine citizens, foreigners and foreign-owned corporations, can have a term of as long as 99 years.
As a rule, lease of private land to foreigners and foreign-owned corporations can have a maximum term of only 25 years, renewable for another 25 years upon mutual agreement of the landlord and tenant. However, a lease under the Investors’ Lease Act may have a period of 50 years, extendible once for a period of not more than 25 years. A lease under this law must be registered with the Department of Trade and Industry’s (DTI) Board of Investments and is subject to the following conditions:
- A stipulation as to the purpose of the investment for which the long-term lease agreement is being entered into
- A stipulation by the parties recognizing the unequivocal authority of the secretary of the DTI to terminate or cancel the long-term lease agreement:
- if the investment project is not initiated within three years from the signing of the lease agreement;
- in case of withdrawal of approved investment;
- in case of use of the leased area for purposes other than that authorized by the DTI; or
- in case of violation by the parties of any of the provisions of the Investors’ Lease Act and its implementing rules and regulations.
