From Payment to Eviction: Tenant’s Guide to Rental Laws in the Philippines

Published: September 3, 2020 | Updated: September 23, 2020 | Posted by: Venus Zoleta | Personal Finance


Your rights as a Renter - Family of three renting a house

I can’t pay my rent because I’ve lost my job. Can I be evicted?

Rental law questions in the Philippines during the COVID-19 crisis are usually about eviction. As more families have lost their income due to the lockdown, the fear of losing one’s home becomes real. Small businesses are also struggling with their rental payments after being closed throughout the enhanced community quarantine (ECQ).

Disagreements between landlords and tenants have been common even before the pandemic broke out—the current crisis has made them worse. If you’re in such a situation, it helps to know that rental laws in the Philippines exist to protect your rights as a tenant.

Rental Law Philippines: What You Need to Know

rental law in the philippines 2020 - rights of tenants

Two laws regulate residential and commercial leases in the Philippines: the Rent Control Act and the Civil Code. Here are the key differences between the two rental laws in the Philippines.

Rent Control Act in the Philippines

Republic Act 9653[1], better known as the Rent Control Act of 2009, is the law that protects housing tenants (especially in the lower-income class) against unreasonable rent increases. It also provides the eviction rules that both landlords and tenants must observe.

This rental law in the Philippines covers housing units with a monthly rent of up to PHP 10,000 in Metro Manila and other highly urbanized cities nationwide.

Particularly, the following rental properties are covered by the Rent Control Act:

  • Apartments
  • Boarding houses, bedspaces, dormitories, and rooms for rent
  • Houses and/or land

Landlords and renters who violate any provision of the rental law face penalties—a fine of PHP 25,000 to PHP 50,000, imprisonment of one month and one day to six months, or both.

Civil Code of the Philippines

The Civil Code[2] has lease provisions that cover rentals above PHP 10,000 and those not covered by the Rent Control Act of 2009, including commercial spaces and rent-to-own units.

The lease provisions in the Civil Code are rather lengthy and too technical for common people to understand. If you’re covered by this rental law in the Philippines and you think your landlord has violated your tenant rights, it’s best to consult a lawyer who specializes in this field.

What are the Rights of a Tenant in the Philippines?

Tenants are entitled to protection as mandated by rental laws in the Philippines. Based on data from the Philippine Statistical Research and Training Institute[3], the majority or 97% of renters in the country are paying monthly rent at PHP 10,000 and below. Thus, in this article, we’ll focus on the tenant rights provisions under the Rent Control Act.

Here are the basic rights you should know if you’re renting a home.

1. Limit on Rent Increases

rental law in the philippines 2020 - 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[4] based on the Rent Control Act.

Until how much can landlords increase their rent?

Monthly RentMaximum Rent Increase
PHP 4,999 and below2% (only once per year)
PHP 5,000 to PHP 8,9997% (as long as the unit is occupied by the same tenant)
PHP 9,000 to PHP 10,00011% (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

rental law in the philippines 2020 - 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

rental law in the philippines 2020 - legal process to evict a tenant

If your landlord tells you to vacate the house, ask for the specific reason for the eviction. You cannot be evicted for unjust reasons.

When Can a Tenant 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.

When is Eviction Illegal?

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.

Related: 5 Ways to Save Your Small Business from a Pandemic

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.

Related: 9 Helpful Family Budgeting Tips in the New Normal

What Should I Do If My Tenant Rights are Violated?

Rental laws are not clear about what you can do in case your rights as a renter are violated. You can first try to negotiate with your landlord for a settlement. If you don’t reach an agreement, seek the assistance of your barangay chairman or lupon[6], which has the authority to protect landlord and tenant rights.

If your landlord evicts you during the quarantine period, it’s a clear violation of the DTI guidelines on residential and commercial rents[7]. You can file a complaint with the DTI through email or in person. The DTI will then issue a notice of violation to the landlord and require a written reply. Once the violation is confirmed, an appropriate criminal case will be filed with the Department of Justice against the erring landlord.

Final Thoughts

Especially during a crisis, the law gives special consideration to renters struggling to settle their rent. Knowing your tenant rights under the rental laws in the Philippines certainly helps you avoid unfair and stressful situations like illegal eviction.

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