Congress of the Philippines Twelfth Congress REPUBLIC ACT NO. 9161 De e!

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AN ACT E&TABLI&'IN( RE)OR*& IN T'E RE(ULATION O) RENTAL& O) CERTAIN RE&IDENTIAL UNIT&$ PRO+IDIN( T'E *EC'ANI&*& T'ERE)OR AND )OR OT'ER PURPO&E& Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: &e tion 1. Short Tittle. This ACT shall be known and cited as the "Rental Reform Act of 2002" &e tion #. Declaration of Policy. The State shall for the common good, undertake a continuing of urban land reform an housing which will make a ailable at affordable cost decent housing and basic ser ices to under!ri ileged and homeless citi"ens in urban centers and resettlement areas. Toward this end, the State shall establish reforms in the regulation of retails of certain residential units. &e tion ,. Monthly Rental and Ma imum !ncrease. #eginning 0$ %anuar& 2002 and for a duration of three '() &ears thereafter ending on ($ *ecember 200+, the monthl& rentals of all residential units in the ,ational Ca!ital Region and other highl& urbani"ed cities not e-ceeding Se en thousand fi e hundred !esos './,000.00) and the monthl& rentals of all residential units is all other areas not e-ceeding 1our thousand !esos '.+,000.00) shall not be increased annuall& b& the lessor, without !re2udice to e-isting contracts, b& more than ten '$03). &e tion -. Definition of Terms. The following terms as used in this Act shall be understood as4 'a) "Rental" shall mean the amount !aid for the use or occu!anc& of a residential unit whether !a&ment is made on a monthl& or other basic. 'b) "Residential unit" shall refer to an a!artment, house and5or land on which another6s dwelling is located and used for residential !ur!ose and shall include not onl& buildings !arts or units thereof used solel& as dwelling !laces, boarding houses, dormitories, rooms and beds!aces offered for rent b& their owners, e-ce!t motels, motel rooms, hotels, hotels rooms, but also those used for home industries, retail stores or other business !ur!oses if the owner thereof and his or her famil& actuall& li e therein and use it !rinci!all& for dwelling !ur!oses. 'c) "7mmediate members of famil& of the lessee or lessor" for !ur!oses of re!ossessing the leased !romises, shall be limited to his or her s!ouse, direct descendants or ascendants, b& consanguinit& or affinit&. 'd) "8essee" shall mean the !erson renting a residential unit. 'e) "9wner58essor" shall include the owner or administrator or agent of the owner of the residential unit. 'f) "Sublessor" shall mean the !erson who leases or rents out a residential unit leased to him b& an owner. 'g) "Sublessee" shall mean the !erson who leased or rents out a residential unit from a sublessor. 'h) "Assignment of lease" shall mean the act contem!lated in Article $:+; of the Ci il Code of the .hili!!ines. &e tion .. Rental and Deposit. Rental shall be !aid in ad ance within the first fi e '0) da&s of e er& current month or the beginning of the lease agreement unless the contract of lease !ro ides for a later date of !a&ment. The lessor cannot demand more than one '$) month ad ance rental and two '2) month6s de!osit. &e tion 6. "ssignment of #ease of Subleasing. Assignment of lease of subleasing of the whole or an& !ortion of the residential unit, including the acce!tance of boarders or beds!acers, without the written consent of the owner5lessor is !rohibited.

&e tion /. $rounds for %udicial &'ectment. <2ectment shall be allowed on be the following grounds= 'a) Assignment of lease or subleasing of residential units in whole or !art, including the acce!tance of boarders or beds!acers, without the written consent of the owner5lessor. 'b) Arrears in !a&ment of rent for a total of three '() months .ro ided. That in the case of refusal b& the lessor to acce!t !a&ment of the rental agreed u!on, the leased ma& either de!osit b& wa& of consignation, the amount in court, or with the cit& or munici!al treasurer, as the case ma& be, or in a bank in the name of and with notice to the lessor, within one '$) month after the refusal of the lessor to acce!t !a&ment. The lessee shall thereafter de!osit the rental within ten '$0) da&s of e er& current month. 1ailure to de!osit the rental for three '() month shall constitute a ground for e2ectment. 7f an e2ectment case is alread& !ending, the court u!on !ro!er motion ma& order the lessee or an& !erson or !ersons claiming under him to immediatel& acate the leased !remises without !re2udice to the continuation of the e2ectment !roceedings. At an& time, the lessor ma&, u!on the authorit& of the court, withdraw the rentals de!osited. The lessor, u!on authorit& of the court in case of consignation or u!on 2oint affida it b& him and the lessee to be submitted to the cit& or munici!al treasure and to the bank where de!osit was made, shall be allowed to withdraw the de!osits= 'c) 8egitimate need of the owner5lessor to re!ossess his or her !ro!ert& for his or her own use or for the use of an& immediate member of his or her famil& as a residential unit4 Provided( ho)ever. That the lease for a definite !eriod has e-!ired4 Provided( further, That the lessor has gi en the lessee formal notice three '() months in ad ance of the lessor6s intention to re!ossess the !ro!ert& and4 Provided finally= That the owner5lessor is !rohibited from leasing the residential unit or allowing its use b& a third !art& for a !eriod of at least one &ear from the time of re!ossession= 'd) ,eed of the lessor to make necessar& re!airs of the leased !remises which is the sub2ect of an e-isting order of condemnation b& a!!ro!riate authorities concerned in order to make the said !remises safe and habitable4 Provided. That after said re!air, the lessee e2ected shall ha e the first !reference to lease the same !romises4 Provided( ho)ever. That the new rental shall be reasonabl& commensurate with the e-!enses incurred for the re!air of the said residential unit and4 Provided( finally= That if the residential unit is condemned or com!letel& demolished, the lease of the new building will no longer be sub2ect to the aforementioned first>!reference rule in this subsection= and 'e) <-!iration of the !eriod of the lease contract. &e tion 0. Prohibition "gainst &'ectment by Reason of Sale or Mortgage. ,o lessor or his successor>in>interest shall be entitled to e2ect the lessee u!on the ground that the leased !remises ha e been sold or mortgaged to a third !erson regardless of whether the lease or mortgage is registered or not. &e tion 9. Ret*to*+)n Scheme, At the o!tion of the lessor, he or she ma& engage the lessee in a written rent>to> own agreement that will result in the transfer or ownershi! of the !articular dwelling in fa or of the latter. Such an agreement shall be e-ce!t from the co erage of Section ( of this Act. &e tion 1%. "pplication of the Civil Code and Rules of Court of the Philippines, <-ce!t when the lease is for a definite !eriod, the !ro isions of !aragra!h '$) of Article $:/( of the Ci il Code of the .hili!!ines, insofar as the& refers to residential units co ered b& this Act, shall be sus!ended during the effecti it& of this Act, but other !ro isions of the Ci il Code and the Rules of Court on lease contracts, insofar as the& are not in conflict with the !ro isions of this Act shall a!!l&. &e tion 11. Coverage of this "ct. > All residential units in the ,ational Ca!ital Region and other highl& urbani"ed cities the total monthl& rental for each of which does not e-ceed Se en thousand fi e hundred !esos './,000.00) and all residential units in all other areas the total monthl& rental for each of which does not e-ceed 1our thousand !esos '.+,000.00) as of the effecti it& date of this Act shall be co ered, without !re2udice to e-isting contracts. &e tion 1#. Penalties. > a fine of not less than 1i e thousand !esos '.0,000) nor more than 1ifteen thousand !esos '$0,000.00) or im!risonment of not less than one '$) month and '$) da& to not more than si- ':) month or both shall be im!osed on an& !erson,natural or 2uridical, found guilt& of iolating an& !ro ision of this Act.

&e tion 1,. !nformation Drive. > The *e!artment of the 7nterior and 8ocal ?o ernment and the @ousing and Arban *e elo!ment Coordinating Council, in coordination with other concern agencies, are hereb& mandated to conduct a continuing information dri e about the !ro isions of this Act. &e tion 1-. Transition Program. > The @ousing and Arban *e elo!ment Coordinating Council is hereb& mandated to formulate, within si- ':) months from effecti it& hereof, a transition !rogram which will !ro ide for safet& measures to cushion the im!act of a free rental market. &e tion 1.. Separability Clause. > 7f an& !ro ision or !art hereof is held in alid or unconstitutional, the remainder of the law or the !ro ision not otherwise affected shall remain alid and subsisting. &e tion 16. Repealing Clause. > An& law, !residential decree or issuance, e-ecuti e order, letter of instruction, administrati e order, rule or regulation contrar& to or inconsistent with, the !ro isions of this Act is hereb& re!ealed, modified or amended according. &e tion 1/. &ffectivity Clause. > This Act shall take effect on 0$ %anuar& 2002 following its !ublication in at least two '2) news!a!ers of general circulation. A!!ro ed, 'Sgd)

)RAN1LIN *. DRILON .resident of the Senate

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2O&E DE +ENECIA$ 2R. S!eaker of the @ouse of Re!resentati es This Act which is a consolidation of @ouse #ill ,o. $;+; and Senate #ill ,o. 2$+ was finall& !assed b& the @ouse of Re!resentati es and the Senate on 20th *ecember 200$

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