Rent Control Act Extended for Another 2 Years

The Housing and Urban Development Coordinating Council (HUDCC) has

extended the rent control regulation for residential units occupied by low-income
brackets for another two years until December 2017.

Effective January 1, 2016 until December 31, 2017, the rent of any residential
unit for those paying monthly rent of up to P3,999.00 shall not increase by more
than 4% per annum. On the other hand, monthly rentals of P4,000 up to P10,000.00
shall not be increased by more than 7% per annum provided that the unit is
occupied by the same lessee. This regulation applies to all residential units covered
by the specified monthly rent, across the country.

The rent control regulation was extended pursuant to the authority given to
the HUDCC under Republic Act 9653 or the Rent Control Act of 2009 to determine
whether to continue or discontinue the regulation based on a study of its
implementation and to adjust the yearly rate increase accordingly. The law aims to
protect poor and middle-income families from unreasonable rent increases.

Based on the original provisions of the law, the rent of any residential unit for
those paying monthly rent of up to P10,000.00 in highly urbanized cities, or up to
P5,000.00 in all other areas shall not increase by more than 7% per annum provided
that the unit is occupied by the same lessee.

The said rental regulation provisions expired on December 31, 2013. The
HUDCC first extended rent control at status quo rates for two years or up to
December 2015.

For the benefit of the poor and middle-income families, HUDCC yet again
extended the rent control up to December 31, 2017 based on a study undertaken by
the Philippine Statistical Research and Training Institute of the Philippine Statistical
Authority.

The study found that 82% of the renters in the country are renting at less than
P4,000 per month. Based on the requirement of the rent control law to consider
inflation rate in determining any adjustment of the rental rates, the study noted
that the average inflation rate in 2014 is at 4.1%, which was used as basis for the
annual increase in rent for families renting at below P4,000 per month.

The said cap for the increase in rent will benefit the entire low-income family
renters and is consistent with the intent of RA 9653.

http://www.hudcc.gov.ph/pr010516

REPUBLIC ACT 9653: A GUIDE ON THE PHILIPPINE RENT

CONTROL ACT
JUNE 20, 2017 BY CATEGORY INDUSTRY NEWS
SHARE:

The Rent Control Act of 2009, or Republic Act 9653, was created for the sole purpose of
protecting both landlord and tenant from conflicts when it comes to properties for rent.
The law, which has since been extended until December 31, 2017, has since limited the
increase of rental payments for residential units in the Philippines. It also has provided
limitations regarding advances and deposits, and grounds a landlord or owner is allowed
to evict a tenant.

Here’s a guide to understand the effects of the Rent Control Act of 2009 before renting a
property in the Philippines:

RENTAL PAYMENT INCREASE

Under the law, the annual increase should not be over 7% of the actual rent. However,
this is only applicable to long-term tenants. Moreover, rental rates on properties that are
leased out to students should only be increased once a year.

Landlords/owners still have the right to increase the rent for the new tenant once the unit
for lease has been vacated by the original tenant.

ADVANCES AND DEPOSITS

Landlords or owners are not allowed to demand more than one (1) month advance rent
and more than two (2) months deposit, according to the law. At the end of the rental
agreement, landlords or owners are required to return any accumulated interest of the
tenant’s deposit, unless the latter has failed to settle outstanding utility bills or if there was
legitimate damage done to the property by the tenant.

TENANT EVICTION GROUNDS

To address the conflict arising immediate eviction, Rent Control Act of 2009 has
established reasons and remedies a landlord or owner is allowed to evict a tenant:

 Lease or contract expiration.

 Non-payment of rent for a total of three (3) months.
o If payment is not accepted by the landlord or owner, tenant can deposit
the rental payment by depositing it directly on the former’s bank account,
by way of consignment to the barangay chairman, city treasurer or the
appropriate court within one month of refusal. The tenant should also
make rental deposits every ten days of the current month after the
payment.
 Legitimate use by owner or landlord or immediate family members, under certain
conditions:
o Rent has already expired;
o Owner/landlord has advised the tenant three months in advance; or
o Property rental in question will not be leased to another tenant for at least
a year.
 Property has been seized by the government or proper authorities due to the
property’s physical state and the owner/landlord has to do repairs to make the
place safe and livable, provided that:
o Tenant should be given the option to lease back the unit after repairs.
 o Rent increase should be “reasonably appropriate” to the costs incurred in
the repairs.
o Tenant renting privileges forfeited if the property is to be demolished
instead.

If the property for rent was mortgaged or sold to another owner, the new owner would still
need to follow the provisions regarding eviction.

PENALTIES
Guilty parties will be fined not less than Php25,000, but not more than Php50,000, or
subject to not less than one (1) month and one (1) day but not more than six (6) months
imprisonment, or both.

https://housal.com/blog/2017/06/republic-act-9653-a-guide-on-the-philippine-rent-control-
act