Quick answer

A landlord generally cannot require more than one month’s advance rent and two months’ security deposit for a residential unit covered by the Rent Control Act. If the landlord already holds a deposit equal to two months’ rent, demanding another refundable “deposit” would exceed the statutory ceiling, even if it is given a different name.

An additional payment may be valid in limited situations—for example, when the existing deposit is below the two-month ceiling and the lease already requires a lawful top-up after a rent increase. A landlord ordinarily cannot add a new deposit obligation in the middle of a fixed-term lease without the tenant’s agreement.

For residential units outside rent-control coverage, the written lease becomes especially important. The parties may agree on a larger deposit, but an existing contract generally cannot be changed unilaterally.

The two-month limit for covered residential units

Section 7 of the Rent Control Act of 2009, Republic Act No. 9653, provides that a landlord cannot demand:

More than one month’s advance rent; or
More than two months’ deposit.

The security deposit must be kept in a bank under the landlord’s account name throughout the lease. Interest earned on it must be returned to the tenant when the lease ends.

The deposit and its interest may be applied only to the extent needed to cover the tenant’s:

Unpaid rent;
Unpaid electricity, water, telephone, or other utility bills; or
Pecuniary damage to the property’s components or accessories.

The law does not permit automatic forfeiture of the entire deposit when the actual unpaid obligation or damage is smaller. Any deduction should correspond to the amount actually due.

Which rentals are currently covered?

As of September 18, 2026, National Human Settlements Board Resolution No. 2024-01 continues rent regulation from January 1, 2025 through December 31, 2026 for covered residential units with monthly rent of ₱10,000 or less.

Residential units generally include:

Houses and apartments;
Dormitories;
Boarding-house rooms;
Individual rooms; and
Bedspaces.

Hotels, hotel rooms, motels, and motel rooms are excluded from the statutory definition. A genuinely commercial lease is also not treated as a residential lease merely because an individual signed it. Mixed-use premises require closer examination, although the law can cover premises principally used as the owner’s or tenant’s dwelling together with a home industry, retail store, or other business use.

The current resolution principally regulates rent increases for continuing tenants. A landlord may generally set the initial rent after a unit becomes vacant, subject to the parties’ agreement and other applicable laws. Once that initial monthly rent falls within the regulated amount, the statutory protections relevant to a covered residential tenancy—including the deposit ceiling—should be considered before collecting advance rent or deposits.

The present resolution ends on December 31, 2026. The rules applicable after that date will depend on any later official issuance. Tenants and landlords entering or renewing a lease for 2027 should check the latest DHSUD National Human Settlements Board policies.

When an additional deposit is not allowed

An additional deposit is generally improper when:

The landlord already holds two months’ rent as security. A third month’s deposit would exceed the ceiling for a covered unit.
The landlord tries to disguise the payment. Calling refundable security a “maintenance bond,” “damage bond,” “utility bond,” or similar name does not necessarily remove it from the deposit limit. What the payment actually secures and whether it is refundable matter more than its label.
The demand changes a fixed-term lease without authority. If the signed lease fixes the deposit and contains no lawful adjustment clause, the landlord ordinarily cannot impose a new obligation during the term merely by giving notice.
The amount is really additional advance rent. A covered landlord cannot avoid the one-month advance-rent limit by describing several months of prepaid rent as a deposit.
The demand exceeds the actual lawful cap after a rent adjustment. A contractual top-up may restore a deposit to the agreed amount—such as two months of the lawful current rent—but it cannot turn the deposit into three months’ rent.

Whether a separate nonrefundable charge is actually rent, a deposit, or payment for a distinct service depends on the lease and the real purpose of the charge. Charges created merely to evade rent-control protections may be challenged.

When a lawful top-up may be possible

A landlord may have a reasonable basis to request more money when all of the following are true:

The unit and payment remain within the applicable legal limits;
The landlord currently holds less than the maximum permitted deposit;
The written lease already states that the deposit must equal a specified number of months of current rent, or the tenant freely agrees to a written amendment; and
The request is based on a lawful rent adjustment or another event addressed by the lease.

For example, suppose the lease requires a security deposit equal to two months’ rent. If the monthly rent is lawfully increased and the contract expressly requires the deposit to remain equal to two months of current rent, the landlord may request only the difference needed to restore that amount. The total deposit held must still stay within the two-month ceiling for a covered unit.

A landlord who has properly applied part of the deposit to an obligation during the lease may also request replenishment if the lease authorizes it. The validity of that demand depends on proof of the obligation, the wording of the lease, and the statutory ceiling.

What if the unit is outside rent-control coverage?

For a lease not covered by the statutory deposit limit—such as a residential unit above the current coverage threshold or a genuine commercial lease—the parties’ contract normally controls.

Under the Civil Code:

Article 1159 says contractual obligations have the force of law between the parties and must be performed in good faith.
Article 1306 permits the parties to set their own terms, provided those terms are not contrary to law, morals, good customs, public order, or public policy.
Article 1308 requires the contract to bind both parties; its validity or performance cannot be left solely to one party’s will.

Accordingly, a landlord may propose a larger deposit before a new lease or renewal is signed. But during an existing fixed term, the landlord generally cannot create a new deposit requirement unless:

The lease clearly authorizes the adjustment;
The stated contractual conditions have occurred; or
The tenant agrees to an amendment.

A broadly worded clause allowing the landlord to impose any additional deposit at any time may still be questioned if it effectively leaves the tenant’s obligation entirely to the landlord’s will.

A sale or change of landlord does not automatically create a new deposit

A new owner or property manager should first obtain the existing lease and an accounting of the deposit from the former landlord. A transfer of ownership does not, by itself, cancel the tenant’s proof of payment or automatically entitle the new owner to collect the same security twice.

The tenant should send copies—not the only originals—of the lease, deposit receipt, bank transfer record, and previous landlord’s acknowledgment. If the former and new owners disagree over who holds the money, obtain legal advice before paying a duplicate deposit.

How the deposit should be handled and returned

For a covered unit, the deposit must be kept in a bank under the landlord’s account name. Interest belongs to the tenant when the lease expires.

The Rent Control Act does not establish a universal 30-day return period. The lease may provide a reasonable timetable for inspection, final utility billing, deductions, and refund. Any contractual period must still be applied in good faith.

At move-out, the tenant should ask for:

A joint inspection;
A signed turnover or surrender form;
Final meter readings;
An itemized list of deductions;
Copies of unpaid bills, invoices, quotations, or receipts supporting each deduction;
The computation of bank interest, if the unit is covered; and
Payment of the undisputed balance.

Article 1665 of the Civil Code recognizes that a tenant does not answer for deterioration caused by the passage of time, ordinary wear and tear, or an inevitable cause. The tenant may, however, be liable for deterioration attributable to the tenant, household members, guests, or visitors.

A landlord should distinguish genuine damage—such as a broken fixture caused by misuse—from ordinary fading, minor scuffs, aging sealant, or normal deterioration. The age and pre-existing condition of an item may affect the proper amount of any deduction.

What tenants should do after receiving a demand

1. Check whether the unit is covered

Confirm:

The unit’s residential character;
The current monthly rent;
The location and type of accommodation;
Whether the payment is advance rent, refundable security, or a genuine separate charge; and
Whether the tenancy falls within the current NHSB resolution.

2. Review the signed lease

Look for provisions on:

The original deposit;
Deposit top-ups;
Rent adjustments;
Utilities and association dues;
Pets, keys, furnishings, and parking;
Renewal;
Deductions and forfeiture; and
Return of the deposit.

Do not rely only on verbal statements from an agent or caretaker.

3. Ask for a written explanation

Request the amount, purpose, contractual basis, due date, and intended treatment of the money. Ask whether it is refundable and whether it will form part of the security deposit.

A practical written response is:

I have already paid a security deposit of ₱___ under our lease dated . Please identify the lease provision and legal basis for the additional ₱, state whether it is refundable, and provide an updated deposit accounting. If this is a proposed lease amendment, I do not agree to any amendment unless it is put in writing and complies with applicable rent-control rules.

4. Preserve evidence

Keep copies of:

The lease and all amendments;
Official receipts and acknowledgment receipts;
Bank, e-wallet, and remittance records;
Advertisements describing the original move-in terms;
Messages, emails, and written notices;
Photos and videos showing the unit’s condition at move-in and move-out;
Inventory and inspection sheets;
Utility statements; and
Any threat to disconnect utilities, change locks, seize belongings, or remove the tenant.

Back up important files somewhere outside the rented unit.

5. Continue paying undisputed rent properly

Do not simply stop paying rent because the additional deposit is disputed. Nonpayment may create a separate ground for ejectment.

Pay the agreed rent on time and keep proof. If the landlord refuses to accept it, obtain legal advice promptly about the formal deposit or consignation options under Section 9 of Republic Act No. 9653. Those procedures have specific recipients, notice requirements, and deadlines; merely setting the money aside is not the same as legally depositing it.

6. Try written resolution, then formal remedies

A tenant may send a written demand withdrawing the unlawful charge or requesting a refund and accounting. Barangay conciliation may be required before filing a court action when the parties fall within the territorial and personal coverage of the Katarungang Pambarangay rules, subject to statutory exceptions.

For official guidance, contact the DHSUD central or regional office and the appropriate local housing or barangay office. Recovery of a definite sum may qualify for the judiciary’s small-claims process, depending on the amount and nature of the claim. More complex disputes—especially those involving possession, lease cancellation, injunctions, or substantial damages—may require an ordinary civil case and advice from a Philippine lawyer.

Common mistakes to avoid

Paying a second deposit without asking for a receipt or written amendment;
Treating a refundable deposit and advance rent as interchangeable;
Assuming every unit is covered without checking the current rent and actual use;
Withholding monthly rent as a self-help remedy;
Signing a renewal without checking new deposit and forfeiture clauses;
Accepting an unexplained “automatic forfeiture” of the entire deposit;
Moving out without photos, meter readings, and a turnover record;
Deducting the deposit from the final months’ rent without the landlord’s written agreement;
Ignoring a formal demand, summons, or barangay notice; and
Relying on screenshots of outdated rent-control announcements instead of the current DHSUD issuance.

When legal help is urgent

Seek prompt help from a lawyer, the Public Attorney’s Office if eligible, or the appropriate government office when:

The landlord threatens or carries out a lockout;
Utilities are disconnected to force payment or eviction;
The landlord enters without authority, removes belongings, or uses intimidation;
You receive a barangay summons, demand to vacate, or court papers;
The landlord refuses rent and is preparing an ejectment case;
A large deposit is being withheld without an accounting;
The lease involves a company, commercial use, multiple owners, or a sale of the property; or
The deadline stated in a legal notice is approaching.

A landlord ordinarily must use the proper legal process to recover possession. A dispute over an additional deposit does not authorize physical eviction, seizure of belongings, or other coercive self-help.

Frequently asked questions

Can the landlord ask for three months’ deposit?

Not for a residential unit covered by the Rent Control Act. The maximum security deposit is two months’ rent. One month’s advance rent is separate, but it cannot be converted into another security deposit.

Can a landlord increase the deposit whenever rent increases?

Only if the increase is lawful and the lease requires the deposit to track the current rent, or the tenant agrees to a valid amendment. The total deposit for a covered unit cannot exceed two months of the lawful current rent.

Can a pet deposit or utility deposit be charged separately?

It depends on the payment’s real purpose. If it is refundable money held as security for possible tenant obligations, treating it as a separate label may not take it outside the two-month limit. A genuine payment for a distinct service or actual consumption may be treated differently. Review the documents and total amount collected.

Can the landlord require another deposit at renewal?

For a covered unit, the total deposit remains subject to the two-month ceiling. Outside coverage, the landlord may propose new terms for a genuine renewal, but the tenant must agree before the new contract is formed.

Can the tenant use the security deposit as the last two months’ rent?

Not automatically. A security deposit is normally held to answer for obligations identified by law and the lease. Applying it to rent without written agreement may place the tenant in arrears.

Must the landlord return the entire deposit?

The landlord may deduct proven unpaid rent, utilities, and compensable damage. For a covered unit, deductions and any forfeiture must be commensurate with the actual pecuniary loss. The balance and accrued bank interest should be returned.

Is ordinary wear and tear deductible?

Generally, no. Article 1665 of the Civil Code excludes deterioration caused by time, ordinary wear and tear, or an inevitable cause from the tenant’s return obligation. Whether a particular condition is ordinary wear or tenant-caused damage depends on evidence such as photos, inventories, age, and repair records.

What if there is no written lease?

The absence of a written lease does not necessarily mean there is no tenancy. Receipts, transfers, messages, possession of the unit, and the parties’ conduct may prove the arrangement. However, the lack of written terms makes disputes harder, so all communications and payments should be documented immediately.

Official sources

This article provides general legal information, not legal advice for a particular dispute. Coverage and remedies can depend on the lease, rental amount, use of the premises, payment records, and later government issuances. Official sources were checked through September 18, 2026.