In the Philippines, the relationship between landlords and tenants is primarily governed by Republic Act No. 9653, also known as the Rent Control Act of 2009. This law was designed to protect lower-income sectors from exorbitant rent hikes while ensuring that property owners receive a fair return on their investment.

As the original law has expired, its provisions are regularly extended and modified by the Human Settlements Adjudication Commission (HSAC) and the Department of Human Settlements and Urban Development (DHSUD), formerly overseen by the Housing and Urban Development Coordinating Council (HUDCC).

1. Coverage of the Act

Not all rental properties fall under the Rent Control Act. The law specifically targets residential units within certain price brackets. Currently, the regulations apply to:

Residential Units: Apartments, houses and/or lots, building parts used for home purposes, and boarding houses/dormitories.
Rent Threshold: Properties located in the National Capital Region (NCR) and other highly urbanized cities with monthly rents of PHP 10,000 and below.
Other Areas: Properties in all other areas with monthly rents of PHP 5,000 and below.

Note: Motels, hotels, and commercial spaces (offices/stores) are generally excluded from these specific rent increase caps.

2. Legal Limits on Rent Increases

The law does not allow landlords to increase rent at will. The National Economic and Development Authority (NEDA) and the relevant housing boards set the maximum allowable annual increase.

The 7% Rule: Historically, the most common cap for units occupied by the same tenant has been 7% per year.
Variable Caps: The government periodically adjusts these rates. For instance, recent resolutions have implemented tiered caps (e.g., 4% for lower rent brackets and up to 11% for others) depending on the prevailing inflation rate and economic conditions.
Cumulative Nature: The increase is applied to the current rent. If a landlord chooses not to increase rent in Year 1, they cannot "double up" and charge 14% in Year 2; the cap remains applicable to the specific year's adjustment.

3. Conditions for Increasing Rent

A landlord may only increase the rent under the following specific circumstances:

A. The Annual Cap

For a sitting tenant, the increase cannot exceed the percentage mandated by the current government resolution (e.g., the 7% cap).

B. Change of Tenant

Once a unit becomes vacant, the landlord has the right to set a new initial rent for the next tenant, even if that new rate exceeds the previous 7% limit. However, once the new lease starts, the annual caps apply once more.

C. Boarding Houses and Dormitories

For rooms offered to students or workers (boarding houses/dormitories), the rent can only be increased once a year, even if a new tenant moves into the specific bed space within that year.

4. Prohibited Acts and Tenant Protections

The Rent Control Act provides several safeguards to prevent "indirect" rent increases or unfair treatment:

Advance Rent: Landlords can only demand a maximum of one (1) month advance rent.
Security Deposit: Landlords can only demand a maximum of two (2) months security deposit. This deposit must be kept in a bank account, and any interest earned must be returned to the tenant.
Grounds for Ejectment: A landlord cannot evict a tenant simply because they refuse to pay an illegal rent increase. Valid grounds for eviction include:
Non-payment of rent for three (3) months.
Subleasing the unit without written consent.
Expiration of the lease period.
Necessary repairs (with the right of first refusal for the tenant to return).
The owner's legitimate need to use the unit for their own family (subject to a 3-month notice).

5. Penalties for Violations

Violating the Rent Control Act—such as charging a 20% increase when only 7% is allowed—carries legal consequences under Section 13 of RA 9653:

Fines: A fine of not less than PHP 25,000 nor more than PHP 50,000.
Imprisonment: Confinement for a period of not less than one (1) month and one (1) day to not more than six (6) months.
Both: In some cases, the court may impose both a fine and imprisonment.

Summary Table: Rent Increase Quick Guide

Feature	Regulation
Max Increase (General)	Usually capped at 7% per year (check latest HSAC resolution).
Coverage (NCR)	Units renting for PHP 10,000/month and below.
Coverage (Outside NCR)	Units renting for PHP 5,000/month and below.
Advance Payment	Maximum 1 month.
Security Deposit	Maximum 2 months.
Frequency	Once every twelve (12) months.