Tuesday, July 9, 2013

Owner cannot eject tenants of leased property covered by Rent Control Act

Dear PAO,

I am renting an apartment in Makati City. The property was bought last October 2012, and as I understand, it was sold again to another person in the same year, but I don’t know exactly when. In the middle of December, the last person who bought the apartment wanted us to vacate by the end of this month, because we cannot afford the increase in the rent. Are we obliged to pay and leave without even a grace period?

Thank you. I hope to hear some advice from your office.


Dear Marco,

You did not indicate the amount of rent you are paying for your apartment. This is important, as it will determine what law applies in your case. If your rent is not more than ten thousand pesos (P10,000) per month, you are covered by the Rent Control Act of 2009 or Republic Act (R.A.) No. 9653. If your rent is more than ten thousand pesos (P10,000) per month, then you are covered by the provisions on lease under the Civil Code of the Philippines.

For the purpose of our discussion, we will assume that your lease contract has not yet expired.

If you are covered by the Rent Control Act, the new owner may not be allowed to eject you from your apartment on the grounds that it has been sold or mortgaged to another person, regardless of whether the lease or mortgage is registered or not (Section 10, R.A. No. 9653).

In addition, the owner or lessor may only increase the rent by not more than seven percent (7%) annually as long as the apartment is occupied by the same lessee (Sec. 4, R.A. No. 9653).
Therefore, if your new landowner is increasing the rent by more than 7% annually, you may not agree to and refuse to pay such increase.

If you are covered by the Civil Code, Article 1676 of the Civil Code states that anyone who purchases a piece of land which is under a lease, but the lease is not under the Registry of Property, he may terminate the lease, except when there is a stipulation to the contrary in the contract or sale or when the purchaser knows of the existence of the lease. It is therefore important for you to know if your lease contract was registered in the Registry of Property, if their contract of sale states that your lease must be respected, or if prior to buying the property, the buyer knew of the existence of the lease contract.

As for the increase in rent, you must look at your lease contract to see when it is proper for a rent increase. This is in conformity with Article 1657 of the Civil Code, which states that the lessee must pay the price of the lease according to the terms in the lease contract.
We hope that we were able to enlighten you on the matter. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

source:  Manila Times' Column of Atty Persida Acosta

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