Here’s a clear, practice-oriented explainer on charging interest on late rent in the Philippines when the lease has no interest clause.

Charging Interest on Late Rent Without a Lease Stipulation (Philippines)

The short answer

You can’t impose “contractual” interest or late fees on your own if the lease is silent.
You may still recover “legal” interest as damages once the tenant is in delay. This is awarded by a court (or agreed to later in writing).
The moment legal interest starts running depends on when delay (mora) begins—usually upon demand.

Why: the Civil Code rules that control

No interest unless written (conventional interest)
- The Civil Code requires that interest must be expressly stipulated in writing to be collectible as a matter of contract. Without that clause, you can’t unilaterally add “5% late fee,” “₱500/day,” etc., to your monthly billing.
But legal interest may be awarded as damages (moratory interest)
- When an obligation is to pay money (like rent) and the debtor is in delay, the damages are the legal interest rate if no rate was agreed.
- This is not “because the contract says so” but because the law awards damages for delay.
When does “delay” (mora solvendi) start?
- As a rule, after demand (judicial or written extrajudicial), unless:
  - the obligation or law says demand isn’t needed,
  - time is of the essence, or
  - demand would be useless.
- In landlord–tenant disputes, courts commonly count from the date of your written demand to pay (or from the filing of the case if no prior demand is proven).
What rate is the “legal interest”?
- Philippine courts apply a single legal rate to monetary obligations in default where no rate is agreed. (In modern jurisprudence, that rate has been 6% per annum, simple interest.)
- Compounding (interest on interest) does not apply unless separately allowed by law or expressly stipulated; interest generally does not earn interest without a written agreement.

What you may and may not do (if the lease is silent)

You may:

Send a written demand specifying the unpaid rent and giving a clear deadline. This starts the clock for delay.
Claim legal interest as damages in a lawsuit (e.g., in ejectment or a separate collection action). Courts can award 6% per annum on the unpaid rentals from the date of demand (or from filing, if that’s the first proven demand) until fully paid.
Agree later in writing on an interest/late-fee arrangement (an amendment). From that point forward, the agreed rate applies.

You may not:

Unilaterally impose a “late fee” or penalty that was never in the lease. You can bill it, but it’s not legally enforceable on its own.
Capitalize interest (charge interest on interest) without a written stipulation or a basis in law.

Residential vs. commercial leases

The Civil Code rules above apply to both.
Special or temporary rent-control laws and local ordinances (e.g., moratoria during calamities) can affect evictions, rent increases, and timelines, but they don’t create a late-interest right where the lease is silent. Always check current special laws and local rules that may adjust remedies or timing.

Practical playbook for lessors (no interest clause)

Document the default
- Keep the lease, official receipts/ledgers, and all communications.
Send a formal written demand
- Itemize arrears, give a definite due date, and state that legal interest as damages will be pursued if unpaid.
- Keep proof of service (registered mail with registry receipt, courier proof, or personal service acknowledgment).
Choose your remedy path
- Unlawful detainer (ejectment) if you want possession back and unpaid rent (plus damages/legal interest). Must be filed within one year from last demand/last default that ripened into unlawful detainer.
- Collection case if you want to focus on money.
- Barangay conciliation (for covered barangays and parties) is often a mandatory pre-condition before filing.
Ask the court for legal interest
- In your prayer, specify legal interest from the date of your demand (or from filing, if applicable) until full payment.
Consider a written amendment
- If you’ll keep the tenant, propose a lease addendum with a reasonable late-payment interest or penalty clause going forward.

Practical playbook for lessees (no interest clause)

If billed late fees that weren’t in the lease, you can contest them.
If you receive a demand, act quickly: pay, negotiate a payment plan, or document valid defenses.
To avoid interest as damages, cure within the demand period or before suit.

Drafting tips for future leases

If you want enforceable late-payment protection:

Write it clearly
- “Rent is due every ___ day of the month. Any unpaid rent after ___ days from due date shall earn interest at % per month (% p.a.). In addition, a penalty of ₱___ per day/month will be due as liquidated damages.”
Separate interest and penalties
- Interest compensates for the use/forbearance of money.
- Penalty/Liquidated damages compensates for breach. Courts may reduce unconscionable penalties.
No compounding unless intended
- If you truly want compounding, it must be express and in writing (and still subject to judicial scrutiny for unconscionability).
Reasonableness matters
- Even though statutory usury ceilings are suspended, Philippine courts strike down exorbitant rates. Keep rates moderate and defensible.
Include demand and default mechanics
- State when the tenant is in default (e.g., “automatically upon lapse of ___ days from due date without need of demand”) to help interest run without a separate demand. (Courts still look for fairness and clarity.)

Computation snapshot (no interest clause)

Scenario: ₱50,000 rent due June 1; unpaid. Landlord serves written demand on July 10 giving 5 days to pay; unpaid; suit filed August 1.
Legal interest: Court may award 6% p.a. on ₱50,000 from July 10 (date of extrajudicial demand) until fully paid (with further 6% p.a. on the total judgment amount from finality of judgment until satisfaction—standard post-judgment rule).
No late fees or compounding are allowed absent a written clause.

(Numbers here are illustrative. Courts apply the current legal rate and standard post-judgment interest rules.)

Evidence and procedure pointers

Keep proof of delivery of the demand letter. Without it, interest might only run from filing of the complaint.
In small-value disputes, consider the Small Claims route if within the prevailing monetary threshold (check the latest limits).
For ejectment, file in the MTC with demand to pay and vacate attached.

FAQs

Can a landlord add “late interest” on an invoice if the lease is silent? You may state it, but it’s not legally enforceable as a contractual term unless the tenant agrees in writing. A court can still award legal interest as damages for delay.

Is a verbal agreement on interest enough? No. Interest must be in writing to be contractually due.

Can a court reduce an excessive rate if we add one later? Yes. Courts may reduce unconscionable interest or penalty rates.

Does a grace period stop legal interest? If the lease or your demand gives a grace period, delay starts after that period; legal interest runs thereafter.

Bottom line

No interest clause = no contractual late interest/fees.
You can recover legal interest as damages once the tenant is in delay, typically from demand.
For future protection, amend or redraft your lease to include a clear, reasonable late-payment clause in writing.

Not legal advice. For a specific case, consult counsel with your lease, demand letters, receipts, and timeline so they can align the claim (and legal interest dates) with current rules and any special/local measures that might apply.