Law Summary
Defense Against Ejection and Rent Collection
- In suits for ejection or rent collection of buildings solely used as dwellings (excluding hotel rooms) and lots, unjust or unreasonable rent is a valid defense.
- Ejection is only allowed for willful nonpayment of rent or if the lessor needs to occupy the building, except as provided in section 12.
Presumption of Unjust Rent and Filing Requirement
- Rent exceeding 20% of the annual assessed value of the building and lot (if owned by lessor) or building plus lot rent (if lot owned by another) is presumed unjust.
- For leased lots, the same 20% rule applies based on the lot's assessed value.
- Proportional assessment is applied if only part of the building or lot is occupied.
- Both lessor and lessee must file affidavits with the mayor’s office within 5 days of lease execution or occupation, stating location, party details, lease duration, assessed value, and agreed rent.
- Existing leases must file affidavits within 10 days after the Act's approval.
Suspension of Ejection Orders
- Courts can suspend ejection orders for up to six months on lessee’s petition if conditions are met.
Conditions for Suspension
- Suspension granted if the building or lot is solely for dwelling.
- Lessee cannot secure another dwelling and shows due diligence.
- Petition filed in good faith and willingness to comply with court orders.
Penalties for Lessors’ Malpractices
- Lessors or agents falsely claiming need for personal use to eject lessees, or exposing lessees to unsafe/insanitary conditions or undue burdens, face fines up to ₱1,000, imprisonment up to 1 year, or both.
- Leasing to another party within one year after ejecting a former lessee on personal use claim is prima facie evidence of falsehood.
Penalties for Excessive Rent and Unlawful Ejection
- Collecting rent above authorized amounts or extrajudicially ejecting lessees can result in fines up to ₱2,000, imprisonment up to 2 years, or both.
Penalties for Evasion through Contracts or Arrangements
- Entering contracts involving bonuses or other considerations to evade the Act, fictitious sales, or schemes to increase rent are punishable by fines up to ₱1,000, imprisonment up to 1 year, or both.
- Possible filing of perjury charges if applicable.
Prohibition on Subleasing
- Lessees may not sublease without written consent of the proprietor.
- Violation is grounds for ejection and a fine up to ₱100.
Effectivity and Duration
- The Act is effective upon approval.
- The law is in force for four years after approval.