Tenant’s Guide to Philippine Rental Laws

Discussions about rental legislation in the Philippines typically center on eviction. The dread of losing one’s home grows more serious as more families have lost their source of income as a result of the lockdown. After being shut down during the expanded community quarantine, small companies are also having trouble paying their rent (ECQ).

Even before the pandemic began, landlord and tenant disputes were frequent; the current situation has just exacerbated them. Knowing that the Philippines has rental laws in place to safeguard your tenant rights is helpful if you find yourself in a situation like this.

Philippine Rental Law

The Rent Control Act and the Civil Code are the two laws that govern residential and business leases in the Philippines. These are the main variations between the two Philippine rental laws.

Philippines Rent Control Act

The Rent Control Act of 2009, also known as Republic Act 9653[1], is the statute that guards tenants of rental properties—particularly those in lower-income brackets—against excessive rent hikes. It also outlines the procedures for eviction that both landlords and tenants must follow.

In Metro Manila and other heavily populated locations around the country, this rental rule in the Philippines applies to housing units with a monthly rent of up to PHP 10,000.

The following rental properties are specifically protected under the Rent Control Act:

• Apartments
• Boarding homes, dorm beds, bed spaces, and rental rooms
• House or land

Any violation of the rental law by a landlord or tenant is punishable by a fine of PHP 25,000 to PHP 50,000, one month and one day to six months in jail, or both.

Philippines Civil Code

Rentals beyond PHP 10,000 and those not covered by the Rent Control Act of 2009, such as commercial spaces and rent-to-own properties, are covered under lease regulations in the Civil Code.

The Civil Code’s leasing clauses are rather complex and wordy for the average person to understand. It is important to speak with a lawyer who specializes in this area if you are protected by this rental law in the Philippines and believe your landlord has violated your tenant rights.

What are Tenant’s Rights in the Philippines?

As required by Philippine rental legislation, tenants are entitled to protection. According to information from the Philippine Statistical Research and Training Institute, 97% of renters in the nation pay monthly rent of PHP 10,000 or less. Therefore, the tenant rights clauses of the Rent Control Act will be the main topic of this paper.

Here are some fundamental rights that anyone renting a home should be aware of.

The maximum increase in rent

Rent increases are limited to what is permitted by law. The rental rise caps were established based on the Rent Control Act by the Housing and Urban Development Coordinating Council (HUDCC), a government entity that oversees residential leases in the Philippines.

Check for any provisions regarding rent increases in a lease agreement before you sign it. If it does, it ought to be within the permitted range.

Additionally, the Rent Control Act limits landlords’ ability to raise rents for student-lease beds, boarding homes, dorms, and rooms to just once each year. In this situation, even if a new tenant moves into the apartment during the same year, no rent increase can be levied twice or more per year.

No excessive advance rent or deposit fees are charged

Landlords are only permitted to request a two-month deposit and a one-month advance rent under the Rent Control Act.

The deposit must be kept in a bank account under the landlord’s name for the entire term of the lease, as required by rental legislation. The deposit and any interest gained on it, along with any unpaid advance rent, should be returned to the tenant at the conclusion of the lease.

However, when renters are late on rent, fail to pay utility bills, or damage any component of the property, landlords may utilize the deposit and advance rent as compensation.

No Eviction Without a Justification

Ask your landlord for a detailed explanation of the eviction if they order you to leave the property. No just cause can be used to evict you.

When Can a Tenant in the Philippines Be Evicted?

The Philippines’ rental legislation specifies the reasons that must be used to remove a renter. Only one of the following grounds may be used to evict a tenant under the Rent Control Act:

• Subleasing is when the tenant rents out the entire apartment or just a piece of it to someone else without getting the owner’s permission in writing.
• Rent that is past due is when it has been unpaid for three months or more.
• Owner’s justifiable need to utilize the property: The landlord or his or her family must reside in the apartment. In this situation, the renter cannot be removed before the lease has expired. Additionally, the tenant must get a formal notice of termination three months in advance.
• House repairs that must be made in order for the rented space to be safe and habitable are the landlord’s responsibility. Priority should be given to re-leasing the space to the evicted tenant once the repairs are complete.
• Expiration of the lease contract – When the lease is up, the landlord has the option of not renewing the lease. This typically occurs when a landlord wants to evict troublesome or unruly tenants.

When is eviction prohibited?

For any of the following reasons, tenants in the Philippines cannot be compelled to vacate the rented property:

Mortgage or sale of the property

In accordance with the Rent Control Act, neither the landlord nor the new owner may evict a tenant if the landlord has sold or mortgaged the leased apartment to a third party.

If you are a frontliner or patient with COVID-19

If you’re renting in a city (like Makati, Manila, Muntinlupa, Pasig, or Quezon City) that has an anti-COVID-19 discrimination ordinance, you shouldn’t be required to vacate your rented home or be rejected a lease if you have a COVID-19 infection or are even only suspect of having one. The same is true for emergency and healthcare personnel.

Rent arrears and other issues during the grace period and quarantine

In ECQ, MECQ, and GCQ regions, landlords are prohibited from evicting tenants from their homes between the beginning of the quarantine and the end of the required 30-day grace period (which starts from the last due date of rent or from the lifting of the quarantine, whichever is longer).

The MSME (micro, small, and medium enterprise) industry tenants who were prohibited from conducting business during the ECQ are covered by this rule, which is based on a Department of Trade and Industry (DTI) memorandum circular[5] issued under the Bayanihan to Heal as One Act.

Conclusion

The law offers tenants who are having a hard time paying their rent additional consideration, particularly in times of crisis. Knowing your rights as a tenant under the Philippines’ rental laws will undoubtedly help you avoid unfair and stressful situations like an unlawful eviction.