Adulting 101: Know Your Rights As A Tenant With This Handy Guide To Philippine Rental Laws6 min read
What do you do when your landlord is becoming cumbersome?
According to global real estate resource Global Property Guide, “the Philippine law is generally pro-landlord in the luxury segment but it is neutral as between landlord and tenant for the rest of the market.”
Whether you’re a first-time mover or you’ve been leasing your very own space for a while now, it pays to know what your rights as a tenant are under the law. This way, you can defend yourself, your property, and your hard-earned cash from unscrupulous owners who find ways to exploit their tenants.
These are the rights you have to know when you’re renting a property regardless of the segment.
The Rent Control Act of 2009
In a previous article, we stressed the importance of the lease. If the lease is the covenant between the landlord and the tenant, then the Rent Control Act of 2009 is basically the word of god, albeit with an expiration date.
Republic Act No. 9653, or more commonly known as the Rent Control Act of 2009, ensures that the law will be fair and just for both parties. For lessors, this law will give them the necessary safeguards to ensure that their business won’t be compromised in any way due to delinquent tenants. Meanwhile, lessees can use the law to protect them from abusive practices committed by some landlords.
Every three years, since the Rent Control Act lapsed in 2013, the Housing and Urban Development Coordinating Council (HUDCC) has been submitting to the Congress its recommendations on whether or not the rates are still justified. With the law about to lapse again in 2020, there may or may not be new rates in 2021.
Let’s delve deeper into your rights under the Rent Control Act.
Who are the people covered by the Rent Control Act?
For residential units for rent in the National Capital Region and other urban locations, the Rent Control Act covers tenants paying up to P10,000. Meanwhile, in other areas, residential units are under the law only if the rent doesn’t exceed P5,000.
What about those who are paying more than P10,000 monthly for their rent? For the middle and luxury segments of the rental market, the usual custom is that both parties can freely negotiate the contract. These segments are not covered by the Rent Control Act as the focus of the law is making rental at the lower segments more amenable to the general public.
How much can lessors increase their rent?
Under the Rent Control Act, landlords can only impose the following increases to their rent every year:
- Not more than a two-percent increase for renters paying between P1 and P4,999 every month
- Not more than a seven-percent increase for renters paying between P5,000 and P8,999 every month
- Not more than an eleven-percent increase for renters paying between P9,000 and P10,0000
For the upper bracket, the specifics of the rent increase schedule are specified in the lease. However, both parties can create an agreement on how the rent will be hiked after the lease has expired. Review of the rent and how frequent it can be conducted is also part of the written agreement between both parties.
How much is the allowable minimum deposit?
To make leasing more accessible to the lower segment of the market, the Rent Control Act only allows up to three months’ worth of rent, which will be divided into the following: one month there will serve as the advance rent and up to two months’ worth of rent will serve as the deposit.
For the deposit, the lessor is responsible for keeping the deposited amount in a bank under his account for the entire duration of the stay. If the amount has accumulated interest in any way while it is in a savings account of the landlord, “any and all interest that shall accrue therein shall be returned to the lessee at the expiration of the lease contract.”
For the more affluent market, the down payment can also be freely negotiated. However, there are standard practices enforced by the market.
One of the most common agreements on deposits is landlords usually require an amount that is equal to three months’ rent as a security deposit, while the rent is paid in advance through postdated checks.
If you’re scouting for a place in the higher segment of the housing market, you may want to discuss with your real estate agent on how you can come to an agreement regarding the lease.
Can I get my security deposit back in full?
If you’re a good tenant, then you don’t have to worry about getting your security deposit back. Usually, landlords will return your deposit once your contract ends and you don’t renew your lease. However, others give you back your money a month after the contract has expired.
However, tenants who are delinquent with electricity, water, and other utility bills will see the said amount chipped off from their deposit. Repairs on the unit due to damages caused by the lessee will also be deducted from the security deposit.
What are the grounds for me to get evicted?
Landlords have their own rules and regulations and upon signing the contract and moving in. It is your responsibility to follow these. However, there are instances where lessors have to forcefully kick out tenants.
In addition to the violation clauses in your lease contract, the Rent Control Act also has other measures that will make it possible for you to get evicted prematurely.
Under the law, you can be judicially evicted because of the following reasons:
- You are subleasing your unit to other people without the landlord’s consent
- You are behind rental payment for three months
- The landlord must use the unit as his residential unit after the lease expires
- The unit has been deemed condemned and repairs must be undertaken
- The lease contract expired
The landlord can request the assistance of the barangay authorities to forcefully eject you by filing a complaint
Are there grounds where I cannot be forcefully ejected out of my rented residence?
Section 10 of the Rent Control Act protects you from getting evicted because the property has been sold or mortgaged.
According to the law, “no lessor or his successor-in-interest shall be entitled to eject the lessee upon the ground that the leased premises have been sold or mortgaged to a third person regardless of whether the lease or mortgage is registered or not.”
Is there a way for me to own the property I’m currently renting?
Yes. The Rent Control Act allows the lessor and the lessee to enter a rent-to-own scheme that will allow the former to transfer the ownership of the unit to the latter. However, this will only happen if the owner agrees to enter the said scheme.