Regulation of residential unit rentals reforms

"Rental" refers to payment for use or occupancy of residential units.
"Residential unit" includes apartments, houses, land with a dwelling, boarding houses, dormitories, rooms, and bedspaces used principally for residential purposes.
Excludes motels, hotels, and commercial establishments not primarily used as dwellings.
"Immediate family members" limited to spouse, direct descendants or ascendants for repossession purposes.
"Lessee" is the person renting the unit; "Owner/Lessor" includes owners, administrators, or agents.
"Sublessor" and "Sublessee" denote parties engaged in subleasing.
"Assignment of lease" references Article 1649 of the Civil Code.

Rent must be paid in advance within the first five days of the rental month or lease start unless otherwise agreed.
Lessors cannot demand more than one month advance rental and two months deposit.

Assignment or subleasing of whole or part of the residential unit prohibited without written consent of owner/lessor.
Acceptance of boarders or bedspacers also prohibited without owner consent.

Unauthorized assignment or subleasing.
Rental arrears totaling three months.
- Lessee may deposit rent in court or authorized institutions if lessor refuses payment.
- Failure to deposit three months' rent may lead to ejectment.
Legitimate owner need to repossess for own or immediate family use after giving three months’ prior notice, only upon lease expiration.
Owner must not lease to third parties within one year after repossession.
Need for essential repairs ordered by authorities;
- Lessee ejected must be offered first preference to lease after repair at reasonable rent commensurate with repair costs.
- No preference if unit is condemned or demolished.
Expiration of lease term.

Lessees cannot be ejected because the leased premises have been sold or mortgaged, regardless of registration status.

Lessors may offer written rent-to-own agreements transferring ownership to the lessee.
Such agreements are exempt from rental increase restrictions.

Suspension of Article 1673(1) of the Civil Code regarding indefinite leases while this Act is effective.
Other Civil Code provisions and Rules of Court on leases apply unless inconsistent with this Act.

Applies to residential units in NCR and highly urbanized cities with monthly rent not exceeding P7,500.
Applies to units in other areas with monthly rent not exceeding P4,000.
Existing contracts remain unaffected.

DILG and HUDCC, in coordination with other agencies, must conduct ongoing information campaigns on the Act's provisions.

HUDCC must formulate a transition program within six months to mitigate impacts of freeing the rental market.

Invalidity of any provision does not affect the validity of other parts of the law.

Conflicting laws, decrees, rules, or regulations are repealed or amended accordingly.

The Act took effect on January 1, 2002, following publication in two newspapers of general circulation.