Law Summary
Definitions
- Rental: payment for the use or occupancy of residential units, on any payment basis.
- Residential unit: includes apartments, houses, or land with dwellings for residential use; excludes motels, hotels, boarding houses, dormitories, and rented rooms/bedspaces.
- Residential units used partly for business (home industries, retail stores) are included if owner and family reside and the business capitalization is ≤ PHP 5,000 without hiring outside help.
- Immediate family: direct ascendants/descendants and relatives within second degree by consanguinity or affinity.
- Lessee: person renting a residential unit.
- Owner/Lessor: owner, agents, or administrators of the residential unit.
- Sublessor: person who leases from owner and rents to another.
- Sublessee: person who leases from sublessor.
- Assignment of lease: as defined in Article 1649 of the Civil Code.
Advance Rental and Deposit
- Lessors/sublessors may demand advance rental only up to one month’s rent.
- Deposits may also be demanded not exceeding one month’s rent.
Subleasing and Assignment of Lease
- Prohibited without written consent of owner/lessor.
- Sublessors/assignors cannot charge rent exceeding what owner charges.
- Rental for subleased or assigned portions proportional to area leased.
Grounds for Judicial Ejectment
- Unauthorized subleasing or assignment.
- Non-payment of rent for three months.
- Owner/lessor needs property for personal or immediate family residential use after lease expires, with three months’ advance notice, and one year residence requirement (except justifiable cause).
- Lessee owns another residential unit suitable for residence.
- Lessors’ necessary repairs following condemnation orders, with lessee’s right of first refusal post-repair.
- Expiration of written lease.
- Ejectment not allowed solely because the leased premises was sold or mortgaged.
Application of Civil Code and Rules of Court
- Suspension of Article 1673(1) of the Civil Code for residential units covered by this Act during its effectivity, except leases for definite periods.
- Other Civil Code and Court Rules provisions on leases apply unless conflicted with this Act.
Coverage
- Covers all residential units with monthly rents ≤ PHP 300 as of the Act’s effectivity.
- Units exceeding PHP 300 rental due to permitted increases remain covered.
- New residential units built during the Act’s effectivity are not covered.
Penalties
- Violation results in imprisonment from 3 months to 2 years and fines from PHP 1,000 to PHP 2,000.
- Corporate offenders’ President or General Manager liable, in addition to penalties on the entity.
Separability Clause
- Invalidity or unconstitutionality of any provision does not affect the rest of the Act.
Repealing Clause
- Repeals Presidential Decree No. 20 and any inconsistent laws, decrees, or orders.
Effectivity
- The Act took effect immediately upon approval and remains in force for five years thereafter.