Q&A: How Are Legal Issues Between Landlords and Tenants Settled?

Being knowledgeable about the Rent Control Act and its coverage will help secure the rights of both lessor and lessee. This is why landlords and tenants should know the rights that they have here in the Philippines. For instance, lessors may only increase the rent once a year, and can only eject the lessee based on five (5) instances. Ejecting the lessee on other grounds is invalid and can be proceeded against in a court of law.

Generally, a lessee has the right to enjoy or use a certain piece of real estate after payment of an agreed price to its owner or the lessor. The latter must deliver it in good condition, make any necessary repairs as stipulated in the contract of lease and allow the lessee to use it in peace. On the other hand, the lessee must pay the rentals as specified, use the property for the purpose agreed upon and settle the expenses made for the deed of lease. When it comes to residential units with monthly rentals no more than Php10,000, however, the parties involved have to abide by Republic Act 9653, also known as the Rent Control Act of 2009.

This article will deal with RA No. 9653 and discuss some of its aspects.

Coverage of the Rent Control Act

A: The Housing Urban Development Coordinating Council (HUDCC) issued Resolution No. 2 in 2013 to extend the period of the Rent Control Act. It likewise stated that based on a 2012 study, 1.5 million households were renters out of 21.5 million. Of this total, 97% were renting their residential dwellings at Php10,000 per month, according to data from the Philippine Statistical Research and Training Institute. 

RA No. 9653 applies to residential properties with monthly rent between Php1 and Php10,000 in the National Capital Region (NCR) and highly urbanized areas. It also covers other areas with residences priced between Php1 and Php5,000. These are apartments, houses, land (for residential purposes), dwelling units, boarding houses, dormitories, rooms, and bed spaces.

What are the rights of a tenant in the Philippines? Tenants are given protection as mandated by rental laws in the Philippines. It’s important that you know your tenants’ rights in the Philippines. 

Lessors may only increase the rent once a year, and only by a particular rate:

  • Rentals between Php1 and Php4,999 – two percent
  • Rentals between Php5,000 and Php8,999 – seven percent
  • Rentals between Php9,000 and Php10,000 – 11 percent

Violations of the Rent Control Act

Lessors who increase their rentals more than once a year or by more than the rates prescribed are in violation of RA No. 9653. Note that this also applies to residential units rented out to students. If the rental changes owners, the new owner cannot shorten the duration of the lessee’s stay on grounds of new ownership or mortgage.

A lessor may only eject a lessee based on five instances:

  • Assignment or subleasing of the unit by the lessee
  • Unpaid rent equivalent to three months
  • Legitimate need by the owner to use the unit for residential purposes after the expiration of the lease period
  • Necessary repairs has to be undertaken on the unit due to an order of condemnation given by authorities to make the property safe and habitable
  • Expiration of lease

Ejecting the lessee on any other grounds is invalid and can be proceeded against in a court of law.

On the other hand, the lessee also has responsibilities to take care of as a renter. They have to pay the agreed rentals according to the times stipulated in their lease contract. They must also pay for the utility bills and maintain the leased space in good condition or risk losing their deposit to settle such amounts.

Q: What are the penalties?

A: Anyone in violation of RA No. 9653 may be penalized with a fine or imprisonment. The fine can be anywhere between Php25,000 and Php50,000. Imprisonment, on the other hand, is set at a minimum of one month and one day to six months and one day. This is applicable to both the lessor and lessee, regardless if those that entered into the agreement was a natural or juridical (corporation) person.

Q: What is the procedure for filing a complaint?

A: The parties to the complaint based on RA No. 9653 are the lessor and the lessee. It is true that the HUDCC has the authority to regulate leases falling under the Rent Control Act. This governmental agency, however, does not hear and decide cases on this matter. Such small claims cases dealing with Contracts of Lease fall under the jurisdiction of the civil courts, which are the following:

  • Metropolitan Trial Court
  • Municipal Trial Court in Cities
  • Municipal Trial Court
  • Municipal Circuit Trial Courts

These courts can hear and decide cases regarding claims not exceeding Php 200,000. A lessee who has a legal issue with a landlord must file a Statement of Claim accompanied by corresponding evidence, along with a Certificate of Non-Forum Shopping, with the court where he or the lessor resides. The docket and legal fees must be paid before the case is heard. If there is merit in the complaint, the court will order that summons be served on the defendant.

A verified response accompanied by corresponding evidence may be made by the Defendant within 10 days from receiving the summons. Both must appear on the specified date, in person or through an authorized representative which cannot be a lawyer. If the judge cannot get the parties to settle amicably, the case will proceed accordingly. A decision in writing will be rendered within 24 hours of the hearing. This decision will be final, executory, and non-appealable.

Although a great deal of effort and research was put into the creation of this article, Lamudi Philippines always advises home buyers and future property owners to consult with professionals, such as licensed real estate brokers and attorneys, to ensure their real estate transactions are properly and promptly processed.

 

Main photo via Depositphotos

 

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