- March 31, 2020
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Lease agreement of an immovable property can be created by two methods:
1. Registered lease agreement in cases where the lease is from year to year or exceeding one year rent or reserving yearly rent. In such cases the instrument must be executed by both the lessor and the lessee.
2. Oral agreement followed by delivery of possession in other cases.
If a lease agreement does not contain an escalation clause, can the lease amount still be escalated upon renewal?
There is a provision in the Rent Control Act that entitles the lessor to an escalation of minimum 10% on previous amount after every 3 years. The escalation percentage may vary subject to lease agreement and terms agreed upon mutually between lessor and lessee.