Notarising a Lease Contract: When It Is Needed, What to Bring

Not every lease contract has to be notarised to be valid between landlord and tenant, but notarisation is what strengthens it as evidence. Have it notarised above all when the term runs longer than a year, when you want the lease recorded with the Registry of Deeds so that it binds third parties, or when a bank, a corporation or an agency asks for it. At the notary, the signatories appear in person before the notary public with a valid ID in hand.

Plenty of Philippine landlords ask the same question: does this really need to go to a notary? Here is the practical answer.

What does notarisation do for a lease?

Once a contract is notarised it becomes a public document. That means:

• The signature and the date are harder to deny, because a notary public witnessed them
• It is more readily accepted as evidence in court or at the barangay
• Banks, companies and government agencies often ask for it
• It is required if you want the lease recorded with the Registry of Deeds

Notarisation does not certify that the contents of the contract are fair or correct. What it attests to is who signed, and that they signed of their own free will.

When should a lease be notarised?

Notarisation is strongly recommended when:

1. The term runs longer than a year. Under the Civil Code a lease of real property may be recorded in the Registry of Property, and a lease that is not recorded is not binding on third persons. If the property is sold, for instance, the new owner may not be obliged to honour an unrecorded lease, save in certain situations. Recording normally calls for a notarised document.
2. The lease is commercial, or the amounts are large and the term long.
3. The tenant is a corporation, because corporations usually require it.
4. Another office will ask for it, as with a business permit, a bank, or an embassy.
5. You simply want the extra protection, even on a short tenancy.

For a short residential let, a month-to-month room say, many landlords skip the notary altogether. That is your call, but the notarised version is the stronger one.

What do you bring to the notary public?

Before you go, put this checklist together:

• A complete, still-unsigned copy of the contract, with every annex (inventory, house rules)
• Enough copies: for the landlord, the tenant, the notary, and spares if it is to be recorded
• A valid government ID for each signatory, bearing a photo and a signature (a passport, driver's license, UMID or PhilSys ID, for example)
• A Special Power of Attorney if somebody is signing on another person's behalf
• A Secretary's Certificate or Board Resolution if one of the parties is a corporation
• Money for the notarial fee

Make sure every detail is already correct before you set off. Editing a contract after it has been notarised is the harder job.

What does the notary do in an acknowledgment?

The acknowledgment is the usual notarial act for a lease. Under the Supreme Court rules on notarial practice:

• Each signatory must appear in person before the notary public
• The signatory presents competent evidence of identity, normally a current government ID with a photo and a signature
• The signatory confirms that the document was signed of their own free will
• The notary records the notarial act in the notarial register
• The notary adds the acknowledgment page, the signature, the seal and the document numbers to the contract

So a document cannot simply be sent off to be notarised while the signatory stays at home. Decline that kind of offer, because it can affect whether the notarisation holds.

E-signature or notary?

The Philippines recognizes the electronic signature under the Electronic Commerce Act for many kinds of transactions. For an ordinary lease between landlord and tenant an e-signature works well: it is quick, nobody has to meet, and there is a record of who signed and when.

But an e-signature is not a substitute for notarisation when you need a public document, as with recording at the Registry of Deeds or when another office asks for one. The practical route is to sign electronically first so the tenancy can start, then print and have it notarised if you need to.

What about tax on a lease?

Some taxes can fall on a lease, documentary stamp tax among them, and the rent bears on your income tax as well. We are not putting rates here, because they change and they depend on the situation. Ask the BIR or an accountant.

How MagpaUpa helps

In MagpaUpa, landlord and tenant can e-sign the contract, with an audit trail of who signed and when. When it does have to go to a notary, there is a print-ready copy that already includes a notarial acknowledgment page, so all you carry to the notary public is that and the IDs. Try MagpaUpa.