Lessons learned about renting property
A few years ago I had an interesting experience when renting a house. I got angry about the way the whole thing went down, but in the end, I learned a number of important lessons that I need to remember in the future. Let’s have a look at how the whole thing went down.
After moving to Davao, we had already rented a place, but it was too small, and it was too far from the main part of town. When we rented it, the housing market was quite tight, and we couldn’t find anything on the market that fitted our needs. About six months later, we found a place that was perfect for us. It was about 4 times the size of the place where we were living, and also had a big yard! In addition, it was walking distance to two malls, and other things downtown. Perfect! We simply relinquished our security deposit on the old place, not wanting to miss out on the new one by waiting for our lease to expire. It didn’t take long, we were ready to move in.
We liked the place so much, that we negotiated a long term lease – 3 years. The owner agreed that since we were making a long term commitment to the place, she would agree not to raise the rent for the duration of the contract. So, it was written into the lease, our rent was P20,000 per month for a term of 3 years. We loved the place, and we even made some improvements at our own expense. We were happy to do so, we intended to live there for a long time (longer than the 3 year lease), and we wanted the place to be to our liking. When we signed the lease, the owner took our copy and all other copies of the lease to the attorney so it could be notarized (that is standard practice here, all contacts must be notarized). After a week or so, we called to ask if we could get our copy of the lease back. We were told it wasn’t ready yet. We called again 3 or 4 times over a couple of months. After that, we sort of forgot about it, I guess.
After we had spent 2 years in the house, we got an e-mail from the owner. He said that since our lease was finished, he was raising the rent by 25%. I wrote back and told him that our lease still had one more year to run, since we had only lived there for 2 years. He said that we had been there for 3 years already. Well, I knew he was wrong, because we hadn’t even lived in Davao for 3 years yet. At that time, I realized that we never got our copy of the lease back after notary. Well, the owner then agreed that we had only been there for 2 years and had one more year to run on the lease. But, he also said he was still going to raise the rent. I argued that he couldn’t raise the rent, because the lease specified how much the rent would be. He agreed that the lease specified the rent, but he said “the lease doesn’t say that I can’t raise it if I want to.” Well, I countered that the lease also didn’t say that I couldn’t start paying half if I wanted to. He held to his guns that said that he would be raising our rent. I told him that I’d just move out, rather than be treated like this. To think of it, I made improvements in his property, always paid my rent on time, and he was going to break the lease by raising the rent. And, he was raising it more than the legal amount that he could raise it by!
Well, we moved out, and found another place, but we were never happy about what happened. As I reflect back on it, I realize that I did learn from the situation, and that is the important thing. The main thing I learned was that I had to be really diligent about making sure that I always got my copy of the lease at all times! Without the lease in my hands, I was really in a tough spot. Another thing I learned is that I will never make improvements at my expense anymore. I believe part of the reason that this happened was because the landlord wanted to get me out, so he could then charge the next renter more, given that the house had been improved (at my expense!).
Believe it or not, we moved away to another place. We didn’t like it there though. After a year, we moved again…. to the house right next door to the one that I’ve been telling you about! I suspect that we will remain in this house until we are ready to move to our own property on Samal Island!
Its a very good story Bob, the one I thing I find in the Philippines is that important documents are very slow to obtain, it always amazes me just how “They never seem to be ready” or “The Attorney is not there to do it” or “The attorney is away on holiday so they can’t finish it” I mean whats wrong with these people ? is there only 1 attorney in the office that can sign a lease or notorize it, I often wonder if they are all on vacation permanently. I find your story very true Bob, we also have the same problem, with official documents, it seems to drag on and drag on, and they don’t seem to have any concern about time management.
This is where you have to push them for the copy of your lease or buyers contract, because as you have said Bob, you have no legal recourse to fight them, if you dont have the correct documentation, in the words of Fox Mulder “trust no-one”. i THINK that just about sums it up dont you boys ?
Pete
I don’t agree, totally don’t agree, i just posted a comment on another of Bobs sites saying i had always been treated fairly in the Phils, unfortunately Bob, you had a bad one here but you sorted it out and moved on………..good luck to you Pete, sorry if you had some bad experiences
Hi Pete – I agree with a lot of what you are saying. It is important to get those papers, you can’t just forget about it like I did! I should have gotten a copy to keep while they were out for notary, and replaced them with notarized copies after they came back.
Hi Rick – I don’t think Pete is saying the treatment is unfair. He is saying that is how it is, and I agree. Everybody gets that kind of action, not just foreigners. You have to stay on top of it. I agree with you too, I am treated fairly here, just like everybody else, almost all the time.
It’s the Philippines, everyone is on permanant vacation LOL, love it or leave it. It’s taken me a month to get together all the paperwork from my upcoming marriage, and they just seem to want copies of everything in triplicate. As for renting, my landlord is ok. I’m renting a 3br, 3cr townhome in lanang for 18,000/month, complete with maids quarters. Back in April the the landlord approached about me about buying the place outright, seems he’s tired of taking care of this row of townhomes as they were built in 1963, and getting quite old by philippine standards. I will pay 1.5milyon maybe 2 for the place but no more… it needs some serious cosmetic work to make it look nice and I hope he takes that into consideration when fixing a price, but I won’t hope too much.
Hi Rick, well what can I say, glad for once someone does not agree with me, thats the beauty of Blogging, my point though is that I am someone who works for a professional company, we treat our clients like they are the only client we have, I guess I am used to a way of working that involves superb time management, if we didn’t operate that way, we would not secure the clients that we do, we pride ourselves on being shakers and doers, when customers want things, we move it for them, I’m not sure if that has ever got through to the Philippines ? my experience with the Philippines is that they are a “Manana” country.
“You want it when ?”
I only state it as I find it, even now we are still waiting for land titles and other documents, we keep asking every week where they are ? we are always told the same thing, they are being processed, or its in Manila ? or the attorney is away, or the attorney has not looked at it yet ? I am sorry to tell them, “If you trade like this in my country, you would loose all your clients, they will simply dump their attorney and go elswhere, time is money, and time waits for no man”
Now I know what youre thinking, I am not in my country, and you would be correct to say that, its the Philippines or as my good freind and member of the freindsofmindanaobob .com would say “WELCOME TO THE PHILIPPINES” you have just been tangoed by the Philippine factors.
The simple fact is..I am not in my country, things don’t move fast, and everything happens in its own time, its what we have to live with whether we like it or not, but PLEASE PLEASE PLEASE Rick, dont ask me to like it…but only to accept it.
Last time I checked the USA is becoming a “Manana” country too
Pete / Bob
You make some persuasive points and to be honest i can’t argue with the points you have made and it certainly is radically different way of doing things…………… i just enjoy the differences and smile rather than being frustrated, because…..it makes it better for me and i find frustrated and even angry westerners in the Phils clash with the local way of doing things, i have seen some examples and the clash can be ugly
however, i do really get your general point and it is one of the reasons Phils will be a poor country for the foreseeable future, as visitors, lets enjoy it for what it is
and no i will not ask you to like it
very best regards
In the Philippines everything other than your peso moves on a slow pace. We would like them to be faster. But, there are a maze of red tape and desks that needs to navigated. Even by a lawyer. Speed is expensive(Bob knows what I mean) the cost depending on haw fast you want your documents back. I miss the laid back, Island lifestyle of the Philippines. Time is what we seem to lack here in the US.
Hi,
You should have kept the receipts for the improvements you made, then presented them to your landlord. If he refused to give you the money for the improvements then I’m sure you could have removed a lot of it.
This is a time when the classic ‘place a smelly fish in a curtain pole’ trick comes in handy!!
Phil
Hi Louis – Sounds like maybe you can get a deal on the place! Good luck.
Hi Pete – I am like you… a lot of the stuff, I don’t like, but I just go along. What else can you do? One person can’t change the system, and it isn’t our country after all. Funny thing is, when you sit down and talk with Filipinos, they are aggravated at many of the same things that we are! Maybe the system is due for a change.
Hi Louis – Not sure how you could say that the US is becoming a manana country. For me, a manana country means a place where it is common to “just do it tomorrow” and such. In the USA, everything is very “hurry up and go” oriented. Maybe we have different concepts of what manana means.
Hi Rick – Yep… unfortunately, many of the reasons that make the Philippines a poor country are really ingrained in the culture. It will take generations for change to happen.
Hi Bobby – Yes, I do understand what you mean! Problem is – things move too fast in the USA, and too slow in the Philippines! Ha ha… as human beings we will never be satisfied!
Hi Phil – Yeah, that would have been a good way to go!
Let’s face it folks, landlords are the same the world over and I don’t think Bob’s experience is unique to the Philippines.
As for delays….be thankful that you’re dealing with a human being and not a voice recognition system.
Well, just remember that the things that make this country a frustrating place to do business and the same things that makes it an inexpensive place to live for expats. If things were efficient, services complete and so on, the place would be booming, rent would be high and prices higher.
Another solution to the problem of getting things notarized is to build a relationship of your own with a local lawyer. Then, when you need something done (such as Bob’s rental contract) you can say that you will be the one to take it to your lawyer and get it
done. Or, go together to his lawyer. Then you know who the lawyer is, and where the office is so you can also follow up.
We have talked to our landlords and come to an agreement before moving in about improvements. Landlords often expect to fix things and make improvements before people move in, so this is the best time for bargaining. You can ask them to do certain things (like plumbing repairs, leaking roof, and sometimes painting) before you move in. You can also make some sort of agreement about repairs you make being taken from the rent by submitting receipts. Usually these improvements need to be agreed upon in advance. There have been improvements we have made from our own pocket as well, for the sake of our quality of life. Labor is cheap, and we felt it was worth the expense to have things the way we like it.
Hi Laurence – Yep, I agree.
Hi AmericanLola – I agree with what you are saying about the notary/lawyer problem. Only hitch on this particular incident is that the owner of the house was in Manila, and the lawyer to be used was there.
Also, regarding the improvements, I just want to clarify. We made the improvements knowing that it was our expense. We didn’t expect the landlord to do it. We had an agreement up front, and there was some consideration given by lowering the rent a bit, and we would do some improvements. My only problem was that I was hoping to hang around and enjoy the improvements that we had made, but instead was kind of pushed out of the house even before the contract expired.
always always always get a copy of any legal paper work before it leaves the room, with BOTH signatures on it even if it is not notorized. This is your reference point for the original, and counter claim to any ‘doctored’ documents. On long term leases owners are usually so esctatic that adding in a 3 or 5 yr. option at 5% ( or whatever % & term ) rent esculation clause for X amount of yrs. creates a future option for the leasee. Usually your first conversation with the leasor as you view a rental property is your BEST opportunity to ‘fish around’ for thier rental perimeters for future negotiation. I make it a habit when dealing with managers that I WILL NOT look at the property without the owner present. You want to get answers before they have time to think about them, write em down and re-iterate the high points so you know they’ve heard them from you ( ….lol sorry Bob..I get carried away on anything related to property investing or management…
interesting Bob, my wife and I own a lot on Samul..its a few kilometeres from Paradise Beach.
Thanks for your tips, Brian! I appreciate it.
Where is your lot at on Samal? Earlier this year we purchased 7 lots in Barangay Limao, which is a few kilometers south of Paradise Island. Maybe we are neighbors.
Hi Bob,
Have you any advice regarding paying deposits/rent in advance, I’m a bit concerned if I pay 2 months as a security deposit and 2 months up front that the landlord may be slow in repaying me at the end of the rental. Especially as I will be 7,000 miles away. I’ve read that they are not that fast in repaying your deposit etc.
Any suggestions ?
Gerry
With a digital camera, a copy of the document can be made. And now that cameras are starting to be Wi Fi, you can take a picture of the document, walk over to nearest Internet Cafe, and transmit it, print it, and be done. This link is the the Nikon Coolpix S6, which is an example of what I’m talking about.
Bob, lot is also south of paradise several kiliometers, if u take road south (dirt rd.) where it hits an intersection that goes north ( i beleive ) its just past that split.
Hello Bob and Feyma
@ KEVIN -
As both a Philippine landlord and renter, I would say, “scan” a copy of the signed document, assuming the owner always sign first. Send the scanned copy (as a PDF file) and make sure the owner gets a copy via notification (use email notification button on software). I am sorry that this incident had to happen to you and your family, and wish it does not happen to anyone else.
@ GERRY – make sure the contract states terms of payment and specifications on returning deposit. That way, owner is bound by law.
I hope this does not spoil your life in the islands. Davao is beautiful and a great place to live. It sure is a lot more secure than Manila.
Mabuhay !!
Nestor
Chicago, IL
Hi Gerry – I’ll give you a tip that has always worked for me. If you have placed 2 months deposit, or whatever, when you are getting ready to move, let the landlord know two months or more in advance of your move. At that time, ask him how he wants to handle the deposit. In every case that I’ve experienced so far, they will just let you stay for the additional two months without paying rent, to sort of “eat up” your deposit. Try it – it works!
Hi Kevin – Good idea about taking a hi res digital shot of the contract.
Hi Brian – It sounds like we must be close to each other in our Samal lots!
Hi Nestor – Thanks for your participation! You have some good thoughts to share there. Don’t worry, these are just minor headaches, and have certainly not ruined my wonderful life here in the Philippines!
have you moved to samal island yet? that’s a 45 min boat ride from davao….
Hi ronnie – I am sorry, but whoever gave you your information is incorrect. The boat ride from Davao City to Samal takes between 10 and 15 minutes (I have made the ride at least 100 times, so I know). As I have said on this site many times, our plans are to move to Samal around 2017 or so, because we want all of our kids to finish school first, before we move. We have already purchased land there and we will start building on our land in the near future.