Here’s a comprehensive, practice-oriented explainer—written without web searches—on landlord rights over security deposits and rent in the Philippines. It’s designed for landlords, property managers, and counsel. I’ll cite stable, generally applicable principles from the Civil Code and standard practice; where special/temporary rules (like Rent Control Acts) often change, I’ll flag them so you can verify the current text before relying on exact caps.

Landlord Rights on Security Deposit and Rent (Philippines)

1) Key definitions

Security deposit – Money held by the lessor to secure the lessee’s obligations (rent, repairs beyond normal wear and tear, utilities/dues, keys, penalties expressly agreed and lawful). Title remains with the lessee but is pledged as security; the lessor must account and return any unused balance at lease end.
Advance rent – Rent paid before it falls due, typically applied to the first (or last) month(s) of occupancy. This is not a deposit and is earned as the period comes due.
Rent – The consideration for the lessee’s use and enjoyment of the premises, due on the date fixed in the lease; in the absence of stipulation, due at the beginning of each period.

Working rule: Advance rent is income upon accrual for the covered period. Security deposit is not income; it is a liability to be settled at move-out (unless lawfully applied to lessee’s defaults).

2) Legal foundations (stable pillars)

Civil Code on Lease governs baseline rights/obligations (lessor must deliver the premises fit for purpose; lessee must pay rent and use the property as a “good father of a family”; both owe repairs according to allocation; lessor answers for hidden defects he knew/ought to know; lessee must return the premises upon lease end).
Contract rules (obligations & contracts): parties may stipulate terms not contrary to law, morals, or public policy. Clear written clauses on deposits, late fees, utilities, dues, and move-out accounting carry significant weight.
Procedural rules for ejectment (for non-payment/violation): unlawful detainer in the first-level courts (MeTC/MTC/MCTC). No self-help evictions or lockouts; resort to court.
Barangay conciliation (Katarungang Pambarangay): mandatory pre-filing for disputes between natural persons living in the same city/municipality, unless an exception applies (e.g., corporations, urgent legal remedies, parties reside in different cities).

Special/temporary statutes: The Rent Control regime has been renewed/updated over time (e.g., caps on security deposit and advance rent, limitations on rent increases, grounds for ejectment). Because the coverage band (rent amount, dates) changes periodically, verify the current issuance before invoking a numeric cap. The structure, however, remains consistent: (a) a cap on deposits/advance, (b) specific notice before increases, (c) protection against arbitrary evictions.

3) Security deposit: what landlords may lawfully do

A) Collecting and holding the deposit

Amount: Common practice is one to two months of rent as security deposit (separate from any one month advance). Where a current Rent Control issuance applies, observe its cap.
Receipts & accounting: Issue a written acknowledgment that distinctly labels each peso: “security deposit,” “advance rent,” “rent for MM/YYYY,” etc.
Commingling: There’s no universal statute forcing escrow, but best practice is to ring-fence the deposit in records (and in larger operations, a separate account) to avoid disputes and to show it was always available for refund.

B) Lawful applications (during or at end of lease)

A landlord may apply the security deposit to:

Unpaid rent and lawful late fees (if stipulated).
Repairs beyond normal wear and tear (holes, broken fixtures, repainting due to misuse, pest remediation due to unsanitary use, unauthorized alterations, etc.).
Unpaid utilities/association dues the lessee was contractually bound to pay.
Cleaning/clear-out/disposal costs when the lessee abandons rubbish or fixtures without right.
Contractual penalties expressly stated and reasonable.

Not allowed:

Ordinary wear and tear (paint dulling, minor nail holes if customary, reasonable flooring scuffs) absent express allocation.
Pre-existing defects (unless the lessee agreed to accept “as is” and to repair, or explicitly assumed certain defects).
Betterments you choose to make (e.g., upgrading countertops) unless the lessee caused damage that necessitates replacement.

C) Mid-lease top-ups

If you consume part of the deposit mid-term (e.g., to cure unpaid utilities), you may demand replenishment back to the original amount if the lease says so. Put a timeline and a default clause (failure to top-up is a breach subject to ejectment).

D) Returning the deposit

Timeline: Absent a statute fixing a number of days, use a contractual deadline (e.g., 30 days from turnover of keys and inspection) to settle and return the balance.
Statement of account: Provide an itemized move-out statement showing line-item deductions with receipts/quotes. Transparency is your best defense.
Interest: Unless a law/regulation or your lease requires interest, deposits are generally non-interest-bearing; however, wrongful withholding can trigger legal interest on the withheld amount from demand until paid, plus possible damages.

4) Rent: collection, increases, late fees, and taxes

A) Collection mechanics

When due: On the date fixed (e.g., every 1st of the month). If silent, at the beginning of each period.
Where/how: As stipulated (bank transfer, manager’s check, payment portal). Always acknowledge receipt and specify the period covered.

B) Increases and notice

Freedom to contract governs outside rent-controlled coverage (agree on escalation, e.g., 5% per year).
Inside rent-controlled coverage, observe the cap and notice period set by the current issuance (these change over time and often depend on rent amount and dates). Put increases in writing and keep proof of service.

C) Late fees & penalties

Enforceable if written, reasonable, and not punitive (e.g., a fixed sum or small percentage per month). Excessive penalties risk being voided or reduced by courts.
Grace periods: If you want a grace period, say so. If you don’t, say “no grace period; rent is due on date certain; late fee applies the next day.”

D) Taxes (commercial leases especially)

Withholding: Commercial tenants commonly withhold a portion of rent as expanded withholding tax (EWT) and provide a BIR 2307. Landlords should match books to net-of-EWT receipts.
Indirect taxes: Depending on your tax profile, VAT or percentage tax may apply to rent. Reflect these clearly in the lease and receipts.

5) Enforcement for non-payment or violations

A) Demand letters (foundation for ejectment)

Send a written demand to pay and/or vacate. State: amounts due, period covered, deadline (e.g., 5 days), where to pay, and that failure converts possession into unlawful detainer. Serve by registered mail (with return card) and email/messenger (screenshots) for redundancy.

B) Ejectment (unlawful detainer)

File in the first-level court where the property lies, within one (1) year from last demand/turnover due date. Attach lease, demand, SOA, and receipts.
Ask for back rent, use and occupation (reasonable compensation for continued occupancy), late fees (if stipulated), attorney’s fees/costs (when justified), and damages.
No self-help: No padlocking, utility cutoffs, confiscation of belongings. Use court processes (writ of execution, sheriff).

C) Landlord’s lien (civil law idea)

The lessor has a preferential right over movables of the lessee found on the premises for unpaid rent—but enforcement is through court processes (e.g., preliminary attachment or execution), not self-seizure.

D) Consignation (if you refuse tender)

If a tenant tenders the exact amount due and a landlord unjustifiably refuses, the tenant can consign in court/bank and be deemed paid. Landlords should accept proper tenders to avoid disputes over default.

6) Special topics & recurring pitfalls

A) “Applying the deposit to last month’s rent”

Only if the lease permits or the landlord agrees. Otherwise, the lessee must pay the last month’s rent and await move-out accounting; the deposit is a separate security.

B) Utilities & association dues

If the lessee is responsible, collect under the deposit only with actual bills or sub-meter readings. Obtain clearances (HOA/admin, water/electric) at move-out to avoid later claims.

C) Unauthorized alterations and fixtures

If the tenant installs improvements without consent, you may demand restoration at move-out or keep useful improvements without paying (depending on the improvement’s nature and the lease). Put the rule in black-and-white to avoid debate.

D) Sublease/assignment

You may forbid or condition subleasing/assignment. If unauthorized sublease occurs, you can terminate per the lease and claim damages.

E) Sale of the property mid-lease

The buyer steps into the lessor’s shoes. Landlord must turn over any security deposit (or settle it with the tenant and pass records). Put assignment clauses in the lease for a clean transfer.

F) Force majeure, government restrictions

If access/use becomes impossible or substantially restricted (e.g., emergencies), parties’ obligations may be suspended/adjusted as per force majeure or law. Draft a hardship clause to guide rent adjustments rather than litigate frustration of purpose.

7) Documentation you should always keep

Lease, annexes (house rules, inventory, photos).
Receipts precisely labeling rent vs deposit vs advance.
Inspection reports with date-stamped photos (move-in and move-out).
Utility and dues statements, sub-meter logs.
Demand letters and proofs of service.
Move-out SOA with supporting invoices.

8) Model clauses you can lift (short and tight)

Security Deposit “Lessee shall pay a Security Deposit equal to [__] month(s) of rent to secure faithful performance. The deposit is not rent and shall not be applied to rent except with Lessor’s written consent. Lessor may apply the deposit to unpaid rent, utilities, association dues, keys/locks, cleaning, and repairs beyond normal wear and tear. Lessor shall deliver an itemized statement and return any balance within [30] days from surrender of keys and completion of joint inspection.”

Advance Rent “Lessee shall pay Advance Rent equal to [__] month(s), which shall be applied to the rent for [first/last] month of the term. Advance rent is separate from the Security Deposit.”

Top-Up on Application “If any portion of the Security Deposit is applied during the Term, Lessee shall replenish the deposit to its original amount within [10] days of written notice. Failure constitutes a substantial breach and ground for termination.”

Late Fee “Rent unpaid after the due date incurs a late fee of [__% or fixed amount] per [month/day] until fully paid, without prejudice to other remedies.”

Move-Out Procedure “Lessee shall give [30] days’ written notice of move-out and be present for a joint inspection. Normal wear and tear shall not be charged. Keys/cards must be returned on or before move-out; rent and charges accrue until actual surrender.”

No Self-Help “Lessor shall enforce rights through lawful process. Lessee acknowledges that lockouts and utility cutoffs are not authorized self-help remedies.”

(Add a Rent Control compliance rider if your unit likely falls within the current covered band.)

9) Practical playbook (landlord)

At signing: Split advance vs deposit; reflect caps if rent-controlled; include top-up and move-out accounting clauses.
Move-in: Do a photo-logged inspection; baseline condition saves you later.
During tenancy: Invoice promptly; document late fees; if you apply deposit mid-term, demand replenishment in writing.
If unpaid: Demand to pay/vacate in writing; calendar one-year ejectment window; mind barangay conciliation when applicable.
Move-out: Conduct joint inspection; compile itemized SOA with receipts; return balance within the contractual deadline.
Disputes: No lockouts. File unlawful detainer for possession, and a separate money claim if amounts exceed ejectment jurisdiction (or claim within ejectment if allowable).

10) Templates (use as starting points)

A. Demand to Pay Rent / Vacate

Subject: Demand to Pay Rent and Vacate Dear [Tenant], As of [date], rent for [periods] totaling ₱[amount] is unpaid, plus ₱[late fees] per the Lease. Please pay in full within [5] days of receipt of this letter at [payment details]. Otherwise, your possession becomes unlawful, and we will file ejectment and seek damages and attorney’s fees. Sincerely, [Landlord]

B. Move-Out Statement of Account (SOA)

Unpaid rent: ₱___
Late fees (Lease §): ₱_
Utilities (attach bills): ₱___
Repairs beyond wear/tear (attach photos & invoices): ₱___
Cleaning/keys/clearance: ₱___
Total deductions: ₱___
Security deposit received: ₱___
Balance refundable: ₱___ (to be released via [mode] on/before [date])

11) Bottom line

Security deposit is security, not rent; you may apply it only to lawful, provable items and must account and refund any balance promptly.
Rent is due as contracted; you can increase or impose late fees per written terms, subject to any current Rent Control caps/notice rules if your unit is covered.
Enforce through demand + ejectment, not self-help. Maintain clean records—they win disputes.
When in doubt about caps/notice under the current Rent Control issuance, double-check the latest coverage before finalizing amounts.

If you want, I can tailor (a) a lease addendum that’s deposit-tight and rent-control-ready, (b) a move-out checklist + photo log template, or (c) a ready-to-serve demand pack based on your unit’s rent, dates, and any arrears.