Before You Sign That Lease Contract

By: Jean Francois \"Punch\" Rivera III

Most renters think the hard part is finding the property.

The condo looks good. The office location is perfect. The warehouse is within budget. Once the parties agree on rent, many tenants assume the rest is just paperwork.

That assumption is often where problems begin.

In practice, lease disputes rarely happen because the parties intended to fight from the start. More often, the disagreement comes from provisions that were ignored, misunderstood, or never properly discussed before signing.

Many tenants focus almost entirely on the monthly rent and security deposit. Meanwhile, some of the most important provisions in the contract receive barely a second look.

Take renewal clauses, for example.

Some tenants assume they can simply continue leasing the property after the contract expires. Others later discover that rental increases, renewal conditions, or notice requirements were far different from what they expected.

Security deposits are another common source of misunderstanding. Many renters assume deposits are automatically refundable at the end of the lease, only to encounter deductions they never anticipated.

Repair obligations can also become surprisingly contentious. Once problems involving leaks, air conditioning, structural damage, or electrical systems appear, the question quickly becomes: who actually shoulders the cost?

Commercial leases carry even greater risks.

Business owners sometimes spend heavily on renovations, fit-outs, or improvements without fully examining what the contract says about those additions once the lease ends. Others later discover restrictions affecting operations, signage, subleasing, or use of the premises.

Even provisions that look harmless at first glance may create practical problems later on.

Some contracts contain broad penalty clauses. Others give one party unusually wide discretion. Certain notice provisions may look routine until an actual dispute arises and parties begin arguing over whether proper notice was ever given at all.

What makes lease contracts tricky is that many problematic provisions do not appear alarming on paper. In fact, some of the most consequential clauses are often buried in otherwise ordinary-looking agreements.

This does not mean every lease contract is unfair. Many are perfectly reasonable. The problem is that renters often sign first and examine carefully only after a dispute has already started.

A lease contract is not merely a receipt for occupying space. It is a legally binding allocation of risk between landlord and tenant.

The challenge is that those risks are not always obvious to non-lawyers.

That is why a careful review before signing matters far more than most people realize. Often, the issues worth worrying about are not the ones tenants initially notice.

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About the author: Jean Francois “Punch” Rivera III writes public-facing explainers on Philippine tax, labor, corporate, real estate, and legal compliance issues.