The past few years have witnessed a significant increase in the number of inhabitants in the Philippines who prefer renting units or bed spaces instead of owning a house. Renting offers various advantages compared to buying a house or a space, including greater flexibility in terms of location changes, lower upfront costs, and relief from major maintenance expenses as landlords typically handle repairs.
Renting allows individuals to explore different living arrangements, test locations, and enjoy prime areas that might be financially out of reach for buyers. The decision between renting and buying ultimately depends on personal circumstances, financial considerations, and long-term goals.
Particularly in the Philippines, the rental market for properties, especially in the National Capital Region (NCR), is thriving and robust. By the conclusion of 2022, the number of residential units accessible in Metro Manila, Philippines, had reached approximately 151.16 thousand. Projections indicated that this number was anticipated to rise to approximately 172 thousand by the year 2025. This includes rental houses, apartments, boarding houses, condominium units, and rent-to-own units.
However, due to the long lockdowns brought about by the pandemic that put the Filipinos' income in a precarious situation, renters experience a warranted insecurity concerning rental property issues such as arbitrary rent increases, privacy, and protection against eviction due to unpaid rent without formal notice.
Fortunately, there are enough laws in the Philippines that cover rentals and specify the rights and obligations of both leasers and leasees, guiding them toward a harmonious relationship characterized by security and respect for one another. This brief article will lay out everything you need to know about rental property laws that protect tenants as well as landlords before you sign that lease agreement.
Before Signing that Lease Contract: Rental Law Philippines
In the Philippines, two laws govern residential and commercial leases: the Rent Control Act and the Civil Code. Below are the details about the primary rental law governing housing units whose rent does not breach the 10,000 PHP per month mark.
More Than Paying Monthly Rent: The Rent Control Act of 2009
Republic Act 9653, known as the Rent Control Act of 2009, was created to make changes in how the rent of certain residential units is regulated. This particular law in the Philippines sets up new rules and methods for this purpose and covers various other matters such as tenant eviction procedures, lease contract termination, and penalties for reported violators.
A lease agreement does not give ample protection for tenant rights and does not provide detail on tenant and landlord obligations, so this mandate fills in that gap. This act covers residential and commercial spaces with a rent of 10,000 PHP and below in Metro Manila and other highly urbanized cities across the country.
The Rent Control Act of 2009 serves as the Housing and Urban Development Coordinating Council's (HUDCC) guide in regulating rent increases through quantity and frequency in accordance with its primary mandate as the government agency in charge of housing and human settlements in the country.
The residential units under the scope of this law include houses and lots, apartments, and buildings or parts thereof: boarding units, dormitories, rooms, and bed spaces.
However, it does not specifically address units with the rent-to-own scheme. Instead, the Act covers rental units and imposes limitations on rental rate adjustments to prevent arbitrary and excessive rental fees.
1 month's Advance Rent and 2 Months Deposit
This act makes it clear that anything beyond the 1-month advance and 2-month deposit provisions is prohibited. Additionally, the deposit fee can be redeemed by the lessee once after the lease contract's expiration. This security deposit can also be used for necessary repairs in the unit or in the event the tenant fails to comply with overdue rental payments and other utility bills. However, when it is necessary to use the security deposit, landlords must inform the lessee beforehand.
Allowable Rental Fees increase.
Units whose monthly rent does not breach the 5,000 PHP per month rent are only allowed a two percent (2%) price increase every year. Pay rent increases of more than seven percent (7%) are inhibited for houses priced between 5,000 PHP and 8,999 PHP. Finally, for rental units priced between 9,000 PHP and 10,000 PHP, rent payments can only increase by eleven percent (11%) per year. Anything more than these figures is considered unreasonable rent increases, which can be reported to the appropriate authorities.
Lease Agreement Termination
The Philippine Rent Control Act provides protection for landlords and tenants alike. If you are a lessor, these are the situations in which you can legally terminate a lease agreement and remove a tenant from the property.
- Illegal subletting Subletting the leased property without prior formal notice from the owner, which gives the owner the right to evict tenants, is illegal.
- Overdue Fees If the tenant has three (3) months' worth of unpaid rent or overdue rental payments, they owe the landlord.
- Expiration of the rental agreement The owner has a legitimate reason to reclaim or repossess the property after the lease contract expires, provided that the renter was informed three months in advance.
- Security and safety hazards The unit owner must make the necessary repairs if the appropriate authorities have now condemned the unit and declared it unsafe and uninhabitable.
In cases of unlawful eviction or unreasonable termination of the lease agreement, the evicted tenant is recommended to seek legal help from a lawyer and reach out to the Housing and Urban Development Coordinating Council.
The same goes for landlords who wish to report a tenant that violates the provisions in the lease agreement, such as inability to pay long overdue rent, major destruction of rental properties, or refusal to yield to a lease agreement termination that is backed by ample reason.
The Rent Control Act of the Philippines will serve as a reliable legal basis for dealing with such instances.
Protect Your Personal Space: Privacy Measures Landlords and Tenants Must Know
Another pressing concern when it comes to renting a residential unit is the tenant's right to privacy. Residential tenants are entitled to privacy within the leased premises without interference or surveillance by the landlord. Your lessor might be renting you the space, but you still own the place.
Here are a few instances in which your property manager is allowed to enter your leased unit:
- During emergencies This includes fires or when there is an accident within the vicinity.
- Repairs: The lessor can enter the rental unit to observe necessary house repairs as requested by the tenants and supervise the fixing itself. This includes the makeup of the unit, the furniture it comes with, and other components of the house.
- Security issues The landlord can also conduct regular inspections to ensure the stability of the building. They can also request entry if a report has come to them that the tenant violates any ground rules they have set up in the lease agreement. Security issues also include warrants of arrest that the landlord could promptly respond to if needed.
- Showings for prospective tenants When rooms leased are bound to be vacated after the lease contract expires, the lessor may also schedule showings for interested renters with the permission of the outgoing lessee.
Nevertheless, in the case of non-urgent matters, the lessor must provide proper notice to the current lessee at least 24 hours prior to entering the rented space, and the lessee must acknowledge this. Restricting guests, unnecessary spying, upgrading utilities, changing locks, and more grave forms of harassment are considered breaches of the tenant's rights to privacy.
In the event that you, as a lessee, feel that your privacy was invaded in your rented unit, the first thing you must do is check your rental agreement or contract. Check if there is any provision that was violated. Oral agreements upon move-in also count.
If it is just a minor issue, try speaking with your landlord first. Make an attempt to clarify the privacy provision of your lease agreement and request an improvement if deemed necessary. In cases where reviewing the lease agreement privately won't work, it is recommended to consult with a professional like a lawyer.
Build Your Dream Home: The Thriving and Secure Rental Market in the Philippines
In a nutshell, there are legal provisions in the Philippines that are authored to create safe living conditions for tenants as well as provide equal protection for lessors. It is important to review these before signing a lease agreement to avoid unfair and stressful situations. Landlords are obligated to craft their contracts in accordance with State-mandated laws on rental property to ensure the legality of the terms they present to their prospective tenants.
Both tenants and landlords must work together to create a safe and wholesome home. Recognize that respect is always a two-way street, act and make decisions based on your understanding of your rights and obligations, and you can live happily ever after in the rental home you choose.
For more information on Vista Residences, email [email protected], follow @VistaResidencesOfficial on Facebook, Twitter, Instagram, and Youtube, or call the Marketing Office at 0999 886 4262 / 0917 582 5167.
