Definitions of Key Terms
- Rental: Payment for use or occupancy of residential units, regardless of payment basis.
- Residential Unit: Includes apartments, houses, land with dwellings used primarily for residential purposes, excluding motels, hotels, boarding houses, dormitories.
- Also includes units used for home industries or retail stores if owner and family reside therein.
- Business capitalization must not exceed ₱5,000; no hired help outside the family is allowed.
- Immediate Family Members: Spouse, direct ascendants or descendants by blood or affinity, relevant for repossession.
- Lessee: Person renting the residential unit.
- Owner/Lessor: Person leasing out, including sublessors.
- Sublessor/Sublessee: Persons involved in subleasing arrangements.
- Assignment of Lease: As defined under Article 1649, Civil Code.
Rental Payment and Security Deposit
- Rental must be paid in advance within the first five days of each month or as contract may allow.
- No advance rental can be demanded beyond this period.
- Deposit allowed not to exceed one month’s rental.
Restrictions on Assignment and Subleasing
- Assignment or subleasing requires written consent of the owner/lessor.
- Acceptance of boarders/bedspacers also requires consent.
- If consent is given, sublessors cannot charge rent higher than that of the owner/lessor.
Grounds for Judicial Ejectment
- Ejectment allowed for:
- Unauthorized assignment, sublease, or acceptance of boarders.
- Non-payment of rent for three months.
- Lessee may deposit rent with court or designated authority if lessor refuses payment.
- Legitimate need of owner or immediate family to repossess after lease expiration with 3 months’ prior notice.
- Owner/lessor may not lease the property to a third party for at least one year post-repossession.
- Lessee’s ownership of another dwelling in the same locality; 3 months’ notice required.
- Repair of the premises subject to condemnation; lessee has first lease preference post-repair.
- Expiration of lease term.
- Lessor cannot eject lessee solely because of sale or mortgage of property.
Application and Suspension of Civil Code Provisions
- Suspension of certain Civil Code provisions relating to indefinite leases during effectivity.
- Other Civil Code and court rules on leases apply except when conflicting with this Act.
Scope and Coverage
- Applies to residential units with rents not exceeding ₱480 as of enactment.
- Units exceeding ₱480 due to increases under Section 1 or prior contracts still covered.
- Does not apply to new residential units constructed or first offered for rent during the Act’s duration.
Penalties for Violations
- Fines ranging from ₱2,000 to ₱5,000 for violations of rental increase limitations or unauthorized assignment/subleasing.
Separability Clause
- Declared invalid or unconstitutional provisions do not affect the validity of remaining provisions.
Repealing Clause
- Repeals Batas Pambansa Bilang 25 and other inconsistent laws or orders.
Effectivity
- Effective immediately upon approval.
- Valid until December 31, 1987.