Submitted By: Qayes Wael M.

Al-Quqa

Rent Control under Republic Act 9653 was approved on July 14, 2009 and expired
on December 31, 2013. Upon expiration, the law mandated HUDCC to:

1.1 Continue the regulation of the rental of certain residential units, determine the
period of regulation and its subsequent extensions, if warranted, determine the
residential units covered and adjust the allowable limit on rental increases per annum;

1.2 Conduct every three (3) years from the effectivity of the Act, a review of its
implementation and study on rental regulation, and submit its recommendation to
Congress whether to continue regulating or deregulating; and

1.3 Formulate and implement a two-year transition program, which will provide for
safety measures to cushion the impact in the event of a regulation-free rental to housing
market.

2. WHAT DID HUDCC DO WHEN THE LAW EXPIRED ON DECEMBER 31,

2013?

The HUDC Council issued Resolution No. 2 in December 2013 extending the
Rent Control for another two years at status quo rates of not more than 7% per annum
for:

2.1 Renters in Metro Manila and highly urbanized areas whose monthly rates are
P10,000 and below; and

2.2 Renters in other areas whose monthly rental rates are P5,000 and below, As
long as the unit is occupied by the same lessee.

The Council’s decision was based on the preliminary study of the Philippine Statistical
Research and Training Institute of the Philippine Statistical Authority, as follows:

2.3 There are about 1.5 million renters nationwide based on the 2012 Family
Income and Expenditure Survey;

2.4 97% of said renters are renting monthly at P10,000 and below.

The status quo was adopted inasmuch as there is a need for further data and
validation, such as the Wholesale Price Index for construction materials, for a
comprehensive study.
 3. RENT CONTROL WILL AGAIN EXPIRE ON DECEMBER 31, 2015. WHAT
HAS HUDCC DONE ABOUT THIS?

The HUDC Council issued Resolution No. 1 in June 2015 which extended Rent Control
for a period of another two (2) years -
from 01 January 2016 to 31 December 2017.

4. WHAT UNITS ARE COVERED BY THE RENT CONTROL EXTENSION?

4.1 Scope of Coverage. The Rent Control covers the following residential units
nationwide, whose monthly rent is P10,000 and below:

A. Apartments;

B. Houses and/or land on which another’s dwelling is located and used for
residential purposes; and

C. Buildings or parts thereof, which are being used solely as dwelling units,
boarding houses, dormitories, rooms and bed spaces.

4.2 Exclusion. As provided in RA 9653, rented units, which are used as motels,
motel rooms, hotels, and hotel rooms including those used for home industries, retail
stores or other business purposes if the owner thereof and his or her family actually live
therein and use it principally for dwelling purposes are not covered by the Act.

5. WHAT ARE THE NEW RATES OF INCREASE UNDER RENT CONTROL?

The increase in the monthly rental rate of any residential unit shall not be more
than:

5.1 Four percent (4%) annually for those paying a monthly rent/ranging from P1.00
to P3,999.00; and

5.2 Seven percent (7%) for those paying a monthly rent of P4,000.00 up to
P10,000.00 for as long as the unit is occupied by the same lessee.
The respective Housing and Urban Development Committees of both Houses of
Congress have approved/confirmed the above recommendations.

6. WHY ARE THERE TWO TIERS NOW COMPARED TO RA 9653?

Provide lower rates of increase to low income renters. The subsequent study
done by the Philippine Statistical Research and Training Institute looked at the census
on rental units, prevailing rental rates, monthly inflation rate on rentals of
the immediately preceding year, and rental price index.

The study showed that out of the 1.5 million renters in the country, 1.27 million
(82%) are renting at less than P4,000 monthly. With regard to the rate of increase, the
study recommended to adopt the inflation rate on rentals of the immediately preceding
year, which at 2014 was at 4.1%.

Since Rent Control is intended to assist the low income families who are renting,
it was decided to lower the rate of increase to 4% for those renting below P4,000 a
month.

But should not disenfranchise those already covered. Since the existing Rent
Control covers those who are renting up to P10,000, the Council resolved to continue
covering them at the existing rate of 7% as provided in RA 9653.

7. WHAT ARE THE OTHER PROVISIONS OF RA 9653 THAT REMAIN

EFFECTIVE?

7.1 REQUIRED ADVANCE RENT AND DEPOSIT

Every lessor is allowed to impose not more than one (1) month advance rent
and not more than two (2) months deposit, which shall be deposited in a bank under the
lessor’s account name during the entire duration of the lease agreement. Any interest
that shall accrue therein shall be returned to the lessee at the expiration of the
lease contract.

7.2 FORFEITURE OF DEPOSITS

The lessor has the right to forfeit a portion or all of the one month deposit
including the interest earned in the event the lessee is unable to settle rent, electric,
telephone, water or such other utility bills or destroys any house components
and accessories.

7.3 GROUNDS FOR JUDICIAL EJECTMENT

The lessor has the right to eject the lessee on the following grounds:
A. The lessee assigns the lease or sub-leases the unit, without the written consent of
the owner/lessor;

B. The renter has accumulated arrears in rental equivalent to three (3) months;

C. After the expiration of the lease period, the lessor/owner has a legitimate need to
repossess the property for his/her own use or that of his/her family as a residential unit,
provided that the renter was notified three months in advance;

D. The lessor/owner needs to make necessary repairs on the leased premises which is
the subject of an existing order of condemnation by appropriate authorities concerned in
order to make the premises safe and habitable; and

E. The lease contract has expired. The lessee cannot be ejected on the ground that the
leased premises have been sold or mortgaged to a third person regardless of whether
the lease or mortgage is registered or not.

7.4 PENALTIES FOR VIOLATION OF ANY PROVISIONS OF THE RENT

CONTROL ACT

Any person found guilty of violating any provision of the act shall be fined of not
less Twenty Five Thousand Pesos (P25,000) nor more than Fifty Thousand Pesos
(P50,000) or imprisonment of not less than one (1) month and one (1) day to not more
than six (6) months, or both.