Navigating the landscape of residential leasing in the Philippines requires a clear understanding of the Republic Act No. 9653, otherwise known as the Rent Control Act of 2009. This legislation serves as a social justice mechanism designed to protect lower-income tenants from arbitrary and excessive rent hikes while balancing the right of property owners to a reasonable return on investment.

1. Scope and Coverage

The Rent Control Act does not apply to all rental properties. Its protections are specifically targeted toward the "mass housing" segment. To fall under the protection of the law, a lease must meet the following criteria:

Location: The property must be located within the Philippines.
Residential Use: The law applies exclusively to residential units. This includes apartments, houses and/or lots, building parts used for home purposes, and boarding houses/dormitories. It strictly excludes commercial spaces, motels, and hotels.
Rent Threshold: The law only covers units where the monthly rent is within the limits set by the National Economic and Development Authority (NEDA) or the Housing and Urban Development Coordinating Council (HUDCC). As of the most recent extensions, this typically covers units renting for PHP 10,000 and below in the National Capital Region (NCR) and other highly urbanized cities, and lower thresholds in other areas.

2. Statutory Limits on Rent Increases

The primary protection offered by the Act is the cap on annual rent increases. Under the current regulations and the extensions granted by the Department of Human Settlements and Urban Development (DHSUD):

The 7% Cap: For residential units covered by the Act, the lessor (landlord) is prohibited from increasing the rent by more than seven percent (7%) annually, provided the unit is occupied by the same tenant.
Cumulative Nature: This 7% is the maximum allowable ceiling. Landlords are not required to increase by 7%; they simply cannot exceed it.
New Tenants: Once a unit is vacated and a new tenant signs a lease, the lessor has the right to set a new initial rent based on market value. The 7% cap then applies to subsequent years for that new tenant.

3. Regulations on Advance Rent and Deposits

To prevent financial strain on tenants during the move-in phase, the Act strictly regulates how much a landlord can demand upfront:

Advance Rent: The landlord can only demand a maximum of one (1) month advance rent.
Security Deposit: The landlord can only demand a maximum of two (2) months security deposit.
Mandatory Interest: The security deposit must be kept in a bank account under the lessor's name. Any interest earned on that deposit must be returned to the tenant at the end of the lease contract.
Usage of Deposit: The deposit serves as a guarantee for unpaid bills (electricity, water, etc.) or damages to the unit beyond "ordinary wear and tear."

4. Grounds for Judicial Ejectment

A landlord cannot evict a tenant simply because they refused an illegal rent increase. Under Section 9 of the Act, eviction is only legal under specific circumstances:

Subleasing: If the tenant subleases the unit (or a portion of it) to others without the written consent of the owner.
Arrears: Non-payment of rent for a total of three (3) months.
Owner’s Need: If the owner has a legitimate need to use the premises for their own residence or for an immediate family member (provided the tenant is given 3 months' notice).
Repairs: If the building has been condemned or requires extensive repairs to make it safe.
Lease Expiration: The expiration of the period of the lease contract.

5. Prohibited Acts: The "No Ejectment" Rule

It is a common misconception that a landlord can evict a tenant solely because the property has been sold to a new owner. The Rent Control Act explicitly states that the sale or mortgage of a residential unit is not a ground for ejecting a tenant. The new owner must respect the existing lease agreement and the protections of the Act.

6. Penalties for Violations

The Philippine government takes violations of the Rent Control Act seriously. Landlords who demand rent increases above the 7% cap or violate the rules on deposits may face:

Fines: Generally ranging from PHP 25,000 to PHP 50,000.
Imprisonment: A prison term of one (1) month and one (1) day to six (6) months.
Combination: Both a fine and imprisonment may be imposed at the discretion of the court.

Summary Table: Tenant Rights at a Glance

Provision	Legal Limit
Max Annual Rent Increase	7% (for the same tenant)
Max Advance Rent	1 Month
Max Security Deposit	2 Months
Grace Period for Arrears	3 Months of unpaid rent before eviction
Subleasing	Prohibited without written owner consent