Quick answer

A landlord may ask for an additional rental deposit only in limited circumstances.

If the residential unit is covered by the Rent Control Act, the landlord cannot demand more than a total of two months’ rent as deposit, in addition to no more than one month’s advance rent. Calling the extra payment a “bond,” “guarantee,” “damage fund,” or similar name does not necessarily avoid the limit if the payment actually functions as security for the lease.

For residential units outside rent-control coverage, the lease contract generally governs. A landlord may propose a larger or additional deposit for a new lease or renewal, but ordinarily cannot impose it unilaterally in the middle of a fixed-term lease unless the existing contract clearly permits the adjustment. The tenant’s consent, the wording of the lease, and the purpose of the payment are critical.

The rule for rent-controlled residential units

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

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

The deposit must be kept in a bank under the lessor’s account name for the duration of the lease. At the end of the lease, the deposit and the interest it earned must be returned to the tenant, except for amounts properly applied to:

Unpaid rent;
Unpaid electricity, water, telephone, or other utility bills; or
Pecuniary loss caused by destruction of components or accessories of the rented premises.

Any forfeiture should be limited to the amount corresponding to the actual financial loss. The law does not authorize automatic forfeiture of the entire deposit simply because the landlord alleges a breach. (lawphil.net)

Current coverage

As of September 22, 2026, rental regulation has been continued through December 31, 2026 under National Human Settlements Board Resolution No. 2024-01.

For 2026, the rent-increase limit applies to residential units occupied by the same tenant whose monthly rent was ₱10,000 or less in 2025 and who continues or renews the lease in 2026. The maximum increase for 2026 is 1%. Units rented for more than ₱10,000 per month in 2025 are outside that rent-increase coverage. The official resolution is available from the Department of Human Settlements and Urban Development. (dhsud.gov.ph)

The statutory definition of a residential unit includes apartments, houses, dormitories, boarding-house rooms, rooms, and bedspaces used for residential purposes. Hotels, hotel rooms, motels, and motel rooms are excluded. Mixed residential and small-business use may be covered when the owner and family actually live there and use it principally as their dwelling.

Because coverage can depend on the applicable NHSB resolution, the rent at the relevant time, occupancy, and the character of the premises, tenants should not assume that every residential lease is covered merely because the current rent is ₱10,000 or less.

What counts as an “additional deposit”?

The substance of the charge matters more than its label. A payment is likely to be treated as part of the security deposit when it is refundable and is held to answer for unpaid rent, utilities, damage, or another tenant obligation.

Examples that may count toward the two-month ceiling include:

A regular security deposit;
A damage deposit;
A rental guaranty deposit;
A “performance bond” securing compliance with the lease;
An additional refundable amount demanded because the tenant has a pet, appliance, or added occupant; or
A replenishment that would cause the landlord to hold more than two months’ rent in security.

A genuine payment for a separate, documented service or expense—such as an actual utility connection charge or condominium access-card replacement—may be different. But a landlord cannot reliably avoid the statutory limit merely by changing the name of a security charge.

Whether a particular fee is really a deposit depends on the lease, receipts, communications, refund conditions, and actual purpose of the payment.

Advance rent is different from a security deposit

Advance rent is rent paid before the period it covers. A security deposit is money held to secure the tenant’s obligations.

For a covered unit, the landlord cannot require more than:

One month’s advance rent; plus
Two months’ security deposit.

Thus, a demand for “two months’ advance and two months’ deposit” is inconsistent with Section 7 if the unit is covered. Postdated checks for future monthly rent are not automatically the same as advance rent because the money has not necessarily been collected, but their legal effect may depend on the lease and the circumstances.

Can the landlord increase the deposit when rent increases?

For a covered unit, the landlord may argue that a deposit expressed as “two months’ current rent” should be topped up after a lawful rent increase. The law, however, does not expressly establish a procedure or deadline for annual deposit top-ups.

At minimum:

The landlord still cannot hold more than the equivalent of two months’ deposit;
The rent increase itself must be lawful;
Any top-up must be supported by the lease or a valid agreement; and
The landlord should provide a written computation and receipt.

A tenant facing a disputed top-up should request the precise contractual and legal basis in writing. Do not assume that withholding regular rent is a safe response.

What if the unit is not covered by rent control?

For rentals outside the special coverage of Republic Act No. 9653—such as many higher-rent residential units and commercial leases—the Civil Code and the contract generally control.

Article 1159 of the Civil Code of the Philippines states that contractual obligations have the force of law between the parties and must be performed in good faith. Article 1306 permits parties to agree on terms that are not contrary to law, morals, good customs, public order, or public policy. Article 1308 also provides that a contract must bind both parties and that its compliance cannot be left solely to one party’s will. (lawphil.net)

These rules usually produce the following results:

During a fixed-term lease

A landlord generally cannot introduce a new deposit requirement simply by sending a notice if the signed lease does not authorize it. A material change normally requires the tenant’s agreement.

Read the lease for clauses concerning:

Adjustment or replenishment of the deposit;
Added occupants or pets;
Increased utility exposure;
Alterations or construction;
Changes required by a condominium corporation; and
Amendment procedures.

Even when the lease allows an adjustment, the landlord must follow the clause in good faith. The clause cannot make performance depend entirely on the landlord’s unrestricted will.

At renewal

When the existing lease expires, the landlord may offer a renewal on new terms, including a different deposit, unless a special law or an existing renewal clause limits that power. The tenant may accept, negotiate, or decline the proposed renewal.

Acceptance should be documented. Paying the additional amount and continuing to occupy the property may affect whether a new agreement is found to exist.

For a new tenancy

Outside rent-control coverage, the parties may generally negotiate the deposit before signing. The tenant should insist that the lease state:

The exact amount;
Its purpose;
Where and how it will be held;
Permitted deductions;
The inspection process;
The return deadline;
Whether interest belongs to the tenant; and
The documents the landlord must provide for deductions.

May a deposit be replenished after a valid deduction?

This depends on the law covering the unit and the lease.

If the landlord validly used part of the deposit for an obligation that became due during the tenancy, the lease may require the tenant to restore the deposit to its agreed level. For a rent-controlled unit, however, the restored amount must not cause the security held by the landlord to exceed the statutory two-month ceiling.

The landlord should identify:

The event that triggered the deduction;
The relevant lease clause;
The amount taken;
The bill, receipt, photograph, or other proof supporting it; and
The amount requested to restore the deposit.

A vague demand to “replenish the deposit” without an accounting should be questioned in writing.

What deductions are proper when the lease ends?

For a covered unit, Section 7 permits deductions corresponding to unpaid rent, utilities, and financial loss caused by destruction of components or accessories.

The Civil Code also requires the tenant to return the property substantially as received, except for deterioration due to the passage of time, ordinary wear and tear, or an inevitable cause. A tenant may be responsible for deterioration caused by the tenant, household members, guests, or visitors. (lawphil.net)

Examples of ordinary wear may include modest fading or deterioration resulting from normal residential use. A broken door, missing fixture, unauthorized structural alteration, or damage caused by misuse may support a deduction. The result depends on the property’s initial condition, age, expected useful life, and proof of repair cost.

A landlord should not charge the tenant the full price of a brand-new replacement when the damaged item was already old without considering its prior condition and the actual loss.

What a tenant should do after receiving a demand

1. Check whether the unit is covered

Confirm:

The nature and location of the premises;
The relevant monthly rent;
Whether the same tenant remains in possession;
The date and terms of the lease or renewal; and
The current NHSB resolution.

2. Read the entire lease

Look for the provisions on deposits, advance rent, renewal, amendments, pets, occupants, damage, utilities, default, and termination. Check whether the demand is for a genuinely new deposit, a top-up, or reimbursement of a separate expense.

3. Ask for a written explanation

Request:

The amount demanded;
Its purpose;
The lease clause relied upon;
The computation;
Whether it is refundable;
The conditions for deductions; and
A receipt if payment is made.

A written request helps prevent later disagreement about whether the payment was rent, a deposit, or a nonrefundable fee.

4. Respond in writing

If the unit is covered and the demand would exceed the statutory ceiling, state that you object under Section 7 of Republic Act No. 9653. If the unit is outside coverage, state why the demand is not authorized by the existing lease.

Keep the response factual. Avoid threats or admissions that you caused damage or owe an amount unless that is established.

5. Continue paying undisputed rent properly

Do not casually withhold rent or treat the deposit as payment for the last months of occupancy unless the landlord agrees or the contract expressly allows it. Rent arrears can create a separate ground for ejectment.

If a covered-unit landlord refuses to accept rent, Section 9 of Republic Act No. 9653 provides specific methods and deadlines for depositing the rent, including consignation in court or deposit with designated local officials or a bank in the lessor’s name with notice to the lessor. Because failure to follow the requirements can affect an ejectment case, obtain legal advice promptly.

6. Propose a written resolution

Possible solutions include:

Withdrawal of the unlawful demand;
A written clarification that the amount already held is the complete deposit;
A documented installment arrangement for a lawful obligation;
A joint inspection and itemized accounting; or
A signed lease amendment, if both parties genuinely agree and the terms are lawful.

Evidence both parties should preserve

Keep copies of:

The signed lease and all amendments or renewals;
The move-in inventory and condition report;
Dated photographs and videos from move-in and move-out;
Deposit, advance-rent, and monthly-rent receipts;
Bank-transfer records and postdated-check details;
Utility bills and proof of payment;
Repair estimates, invoices, and official receipts;
Messages, emails, letters, and notices;
The landlord’s deposit computation;
Inspection schedules and turnover records; and
Proof that keys, access cards, and the premises were returned.

Tenants should ask for receipts that separately identify rent, advance rent, deposit, utilities, and other charges. A single unexplained lump-sum receipt can make a later dispute harder to prove.

Common mistakes

Treating the deposit as the last month’s rent

A security deposit is not automatically a substitute for rent. Doing this without contractual authority or written consent may create arrears.

Relying only on verbal assurances

Promises such as “the deposit will be refunded immediately” or “this extra bond is temporary” should be placed in a signed document.

Signing a renewal without reviewing changed terms

A new deposit provision may become binding when the tenant knowingly accepts a lawful renewal, especially outside rent-control coverage.

Paying without asking what the charge is for

Require a clear description and receipt. A refundable deposit, advance rent, utility payment, association charge, and administrative fee have different legal consequences.

Assuming every deduction is unlawful

Documented unpaid bills or tenant-caused damage may justify a deduction. The dispute is often about proof and amount, not whether any deduction is possible.

Ignoring a formal notice

A deposit dispute does not automatically excuse nonpayment of rent or other lease violations. Respond within any stated deadline and seek advice before the disagreement escalates.

If the landlord refuses to return the deposit

Send a written demand that identifies:

The lease and premises;
The amount paid;
The date the lease ended and the property was surrendered;
The amount requested;
Any interest claimed under Section 7, if applicable;
A reasonable payment deadline; and
The bank or address where payment may be made.

Ask for an itemized deduction statement with copies of supporting bills and receipts.

If the parties live in the same city or municipality, barangay conciliation may be required before certain court actions, subject to the exceptions in the Katarungang Pambarangay rules. A tenant may also seek guidance from the appropriate DHSUD regional office or legal assistance from the Public Attorney’s Office if financially qualified. The proper forum and remedy depend on whether the claim concerns only money, possession of the premises, or both.

When legal help is urgent

Seek legal assistance promptly when:

The landlord threatens lockout, removal of belongings, utility disconnection, or physical force;
An ejectment summons, barangay notice, demand to vacate, or court paper has been received;
The landlord refuses rent and arrears may accumulate;
The deposit demand is tied to a threat of immediate eviction;
A large amount is involved;
The lease contains an acceleration, forfeiture, confession, or broad penalty clause;
The tenant has already signed a disputed amendment;
There is alleged intentional property damage; or
The limitation period for a money claim may be approaching.

A landlord ordinarily must use lawful procedures to recover possession. A private dispute over a deposit does not authorize harassment or self-help eviction.

Frequently asked questions

Can a landlord demand three months’ deposit?

Not for a residential unit covered by Republic Act No. 9653. The statutory maximum is two months’ deposit. Outside that coverage, the contract and general law govern, so a larger deposit may be negotiated for a new lease or renewal.

Can the landlord require two months’ deposit plus one month’s advance?

Yes, that is the maximum combination expressly permitted for a covered unit: up to two months’ deposit and up to one month’s advance rent.

Can a landlord add a pet deposit?

For a covered unit, a refundable pet deposit that secures against damage may be counted as part of the total deposit and should not push the security held above two months’ rent. A genuine, separately documented non-deposit charge requires its own legal and contractual basis.

Can the landlord change the deposit halfway through the lease?

Usually not without a clause authorizing the change or the tenant’s agreement. For a covered unit, even an agreed change cannot lawfully exceed the statutory ceiling.

Must the landlord place the deposit in a separate bank account?

Section 7 says that the deposit must be kept in a bank under the lessor’s account name during the lease. It also requires the accrued interest to be returned to the tenant at the end, subject to lawful deductions.

How soon must the deposit be returned?

Republic Act No. 9653 says the deposit and interest are to be returned at the expiration of the lease, but it does not specify a fixed number of days. The lease may provide a reasonable turnover and accounting period. An unexplained or indefinite delay should be challenged through a written demand.

Can the landlord keep the whole deposit for one damaged item?

Only if the proven financial loss and other lawful unpaid obligations equal or exceed the whole deposit. Under the Rent Control Act, forfeiture is limited to the amount commensurate with the pecuniary damage.

Can a tenant refuse the additional deposit and remain in the property?

During an existing fixed term, the answer depends on the lease and whether the demand is lawful. At renewal, the landlord may be able to decline a new lease if the tenant does not accept lawful proposed terms. A tenant should obtain advice before refusing a demand tied to termination or eviction.

Official legal sources

This article provides general legal information, not legal advice for a particular dispute. Lease wording, rent history, property use, notices, and supporting documents may change the result. Official sources were checked as of September 21, 2026.