What landlords & tenants need to know

Last December, the Housing and Urban Development Coordinating Council (HUDCC), under the leadership of Jejomar Binay, extended RA 9653 or the Rent Control Act of the Philippines.

A tenant may be ejected if he or she does not comply with the terms of the contract and regulations of RA 9653.

The law was supposed to expire at the end of the year but was retained upon review of a survey and research conducted by the HUDCC. The survey revealed that 97 percent of renters in the Philippines paid around P10 000 or less in monthly rent. RA9653 will be extended until December 2015.

The Rent Control Act of the Philippines declares that residential units that are rented out for P10 000 or less each month are not allowed to increase their rent by more than seven percent per year if the unit is occupied by the same tenant. Landlords are not allowed to demand more than one month’s advanced rent and more than two months’ advance deposit.

The law also covers rent, the deposit, subleasing and eviction. The deposit should be kept in a bank in the tenant’s name during the lease agreement period, with the interest from the deposit being given to the tenant upon expiration of the contract. In the event that the unit is damaged or utilities are not paid by the tenant, such payments may be taken out of the deposit.

The tenant cannot assign lease of the unit or any part of it, sublet or accept boarders and bedspacers without written consent from the landlord.

A tenant may be ejected if he or she does not comply with the terms of the contract and regulations of RA 9653. A tenant may also be ejected if he fails to pay up rent for three months. If the landlord needs to take on the unit for his own use or use of immediate family while a contract is ongoing, the landlord needs to inform the tenant three months in advance of his or her intent to repossess.

The law goes on to discuss the law for instances such as a landlord's refusal to accept rent and the ejection of a tenant in the event of the sale of a property.

Failure to comply with the law will result in a fine of P25 000 to P50 000, or imprisonment for up to one month and one day.

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