KINDNESS DOESN'T PAY

Once upon a time, a lessor rented out a unit to a lessee. The lessee, in turn, subleased the unit on Airbnb.

Then the pandemic hit—and the subleasing business collapsed.

When the lessor tried to deposit the tenant’s checks, they bounced. Attempts to contact the lessee became increasingly difficult, with communication turning inconsistent.

As the lease neared expiry, the lessor repeatedly reached out to ask whether the tenant intended to renew. There was no response—until a few days after the lease had already expired.

At that point, the tenant replied, saying they would renew and settle payment within a few days.

No payment came.

A month passed with no rent. The tenant then said they planned to sell their furniture to fund the renewal. Another month went by—still nothing. By the third month, the tenant finally said they would no longer continue and would terminate the lease.

The lessor continued sending emails requesting turnover of the unit—specifically, for the tenant to remove their belongings and return the keys. With no action from the tenant, the lessor eventually entered the unit.

Upon inspection, there were unpaid dues, missing items, and damage requiring repairs. The lessor informed the tenant that the two-month security deposit would be applied against unpaid rent, utility bills, lock replacement, and restoration costs. Any remaining shortfall, the lessor chose to absorb just to move on.

A month later, the situation escalated.

The tenant sent a demand letter asking for the return of the security deposit. Eight months later, the lessor received a summons from the Small Claims Court.

During the hearing, the narrative shifted.

The tenant alleged that they had intended to retrieve their belongings upon lease expiry—but that the lessor had already taken possession of them, effectively claiming the items as her own.

*****

Here are the lessons from yesterday’s horror story.

1. Being “nice” can be expensive.

Extending deadlines without structure or consequence may feel reasonable—but it weakens your position. What starts as goodwill can later be interpreted as tolerance.

If a tenant misses a payment, enforce the contract. Apply penalties (if any) as agreed and document that these will be deducted from the security deposit at lease end. If the tenant intends to renew, apply the deductions and require them to replenish the security deposit.

Discipline early avoids bigger problems later.

2. Renewal is proven by action, not intent.

A lease renewal should never rely on words alone. Signed contract but no payment = no renewal. Everything else is just noise.

3. Choose your communication channel wisely.

Screenshots from messaging apps can be used as evidence—but they’re easier to challenge. Emails carry more weight. They provide timestamps, headers, and traceability—making them far more defensible in legal settings.

4. Lock in a formal communication channel.

Your lease should clearly specify a designated email address for official notices. This removes ambiguity around whether a message was sent, received, or acknowledged.

5. Know your legal battleground.

The Supreme Court of the Philippines created the Small Claims Court system to make disputes faster and more accessible.

The process for Small Claims Court is designed to be simple, speedy, and low-cost. Cases are typically resolved in a single hearing, and parties are not required to be represented by lawyers. It covers money claims—including rental disputes—of up to Php1 million in principal amount.

Conflicts like this don’t just disappear—they escalate. And owners often end up defending decisions they thought were already settled.

This works both ways: If a tenant can go after you, you can go after them.

Final thought: Documentation beats intention every time. Real estate leasing isn’t for the kind-hearted—it rewards clarity, discipline, and boundaries.