Renting a property as a tenant and renting out a property as a landlord come with significant responsibilities. However, disagreements between the two parties, the landlord and the tenant, are very common in the Philippines. That is why it is important to know your rights as a tenant and as a landlord.
Republic Act 9653
Republic Act 9653, known as the Rent Control Act of 2009, protects tenants from unreasonable rent increases and provides the eviction rules that both landlords and tenants must observe. The law covers housing units with a monthly rent of up to Php 10,000 in Metro Manila and other highly urbanized cities. The following are the specific rental properties that are covered by the Rent Control Act:
- Apartments
- Boarding houses, bed spaces, dormitories, and rooms for rent
- Houses and/or land
Landlords and renters who are proven to violate the law shall pay fine of PHP 25,000 to PHP 50,000 or be imprisoned for one month and one day to six months, or both.
Basic rights of a tenant
Moneymax lays out the basic rights of a tenant according to Republic Act 9653. The following are:
1. Limit on Rent Increases
Landlords cannot increase the rent by more than what the law allows. The Housing and Urban Development Coordinating Council (HUDCC), a government agency that regulates residential leases in the Philippines, has set the rental increase limits based on the Rent Control Act.
Until how much can landlords increase their rent?
|
Monthly Rent |
Maximum Rent Increase |
|
PHP 4,999 and below |
2% (only once per year) |
|
PHP 5,000 to PHP 8,999 |
7% (as long as the unit is occupied by the same tenant) |
|
PHP 9,000 to PHP 10,000 |
11% (as long as the unit is occupied by the same tenant) |
Before you sign a lease agreement, check if it has any provision on rent increase. If it does, it should be within the legal limit.
Also, the Rent Control Act allows landlords to increase rents only once a year for bedspaces, boarding houses, dorms, and rooms leased to students. In this case, no rent increase can be charged twice or more per year even if a new tenant moves into the unit within the same year.
2. No Charging of Excessive Deposit and Advance Rent
Under the Rent Control Act, landlords can only collect not more than two-month deposit and not more than one-month advance rent.
The rental law also requires them to keep the deposit payment in a bank account under the landlord’s name throughout the duration of the lease agreement. When the contract expires, the deposit and the interest it earned, plus any remaining balance from the advance rent, should be returned to the tenant.
However, landlords can use the deposit and advance rent to compensate for losses they incur when tenants fail to pay the rent, settle utility bills, and/or causes damage to any part of the property.
3. No Eviction Without Legal Ground
If your landlord tells you to vacate the house, ask for the specific reason for the eviction. You cannot be evicted for unjust reasons.
Moneymax also lays out the instances when a tenant can be evicted in the Philippines:
The decision to evict a tenant must be based on grounds specified by the rental law in the Philippines. The Rent Control Act allows eviction only for any of the following reasons:
Subleasing – The tenant rents out a portion or all of the unit to another person without the property owner’s written consent.
Overdue rental payments – The tenant has not paid the rent for three months or more.
Owner’s legitimate need to use the property – The landlord or his/her family needs to occupy the unit. In such a case, the tenant can be evicted only after the lease contract expires. The renter should also be given a formal notice to vacate three months in advance.
Necessary house repairs – The landlord has to do necessary repairs on the leased unit to make it safe and suitable to live in. When the repair is finished, the evicted tenant should be the priority in leasing the unit.
Lease contract expiration – The landlord has the option not to renew the rental agreement once it expires. This usually happens when the landlord wants to get rid of unruly or delinquent tenants.
Lastly, Moneymax also points out when eviction is illegal in the Philippines:
Renters in the Philippines cannot be asked to leave the leased property for any of the following reasons:
1. Sale or mortgage of the property
Under the Rent Control Act, if the landlord has sold or mortgaged the leased unit to a third party, the landlord or the new owner cannot evict the tenant.
2. If you’re a COVID-19 patient or frontliner
If you’re renting in a city with an anti-COVID-19 discrimination ordinance (such as Makati, Manila, Muntinlupa, Pasig, and Quezon City), you shouldn’t be forced to leave your rented unit or be denied of leasing if you’re suspected or infected with COVID-19 or any infectious disease. The same goes for healthcare and emergency workers.
3. Failure to pay rent and other reasons during the quarantine period and grace period
Property owners cannot evict tenants in ECQ, MECQ, and GCQ areas from the start of the quarantine until the end of the mandatory 30-day grace period (which starts from the last due date of rent or from the lifting of the quarantine, whichever is longer).
This rule, which is based on a Department of Trade and Industry (DTI) memorandum circular[5] under the Bayanihan to Heal as One Act, applies to residential tenants and commercial tenants in the MSME (micro, small, and medium enterprise) industry that were banned from operating during the ECQ.
Under the DTI memo, no eviction is allowed even for tenants who fail to settle their rent during the community quarantine. Landlords who refuse to comply with the grace period could be fined at least PHP 10,000, jailed for at least two months, or both.
All unpaid rents during the quarantine period can be settled in six monthly installments—without any penalties, interests, fees, and other charges—after the end of the grace period. According to the DTI, tenants who opt to do that should give their landlord a promissory note or any letter stating their intention to pay the overdue rents in installments.
Final thoughts
Rent and renting out are two different things that are interconnected and bear great responsibilities, so it is important to know your rights whether you are a tenant or a landlord. Neglecting responsibilities may result in legal action, so better be informed!
Source:
Zoleta, V. (2020, September 23). Rental Law in the Philippines: Know Your Rights As Tenant. Moneymax. https://www.moneymax.ph/personal-finance/articles/rental-law-philippines