Quick answer

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

For a residential unit covered by the Rent Control Act, the total deposit cannot exceed two months’ rent, and the landlord cannot demand more than one month’s advance rent. A new charge does not escape the limit merely because it is called a “pet deposit,” “utility deposit,” “key deposit,” or another name if it effectively serves as security for the tenant’s obligations.

For a unit outside rent-control coverage, the lease contract generally governs. A landlord ordinarily cannot impose a new or larger deposit during a fixed lease unless the contract already authorizes it or the tenant agrees to a valid amendment. When the lease expires, however, the parties may negotiate a different deposit as a condition of renewal, subject to law, fairness, and public policy.

First determine whether the unit is rent-controlled

As of 2026, the current rental regulation under National Human Settlements Board Resolution No. 2024-01 applies to qualifying residential units with monthly rent of ₱10,000 or less.

For the 2026 rent-increase limit, the unit must generally have been:

occupied by the same tenant in 2025;
rented for ₱10,000 or less per month in 2025; and
continuously occupied or renewed by that tenant in 2026.

The maximum rent increase for those qualifying units in 2026 is 1%. Units rented above ₱10,000 per month in 2025 are outside that particular cap. A newly rented vacant unit may generally be offered to a new tenant at a newly set rent, although other laws and the parties’ contract still apply.

Residential units include houses, apartments, boarding houses, dormitories, rooms, and bedspaces. Hotels, hotel rooms, motels, and motel rooms are excluded. A mixed residential-business property may qualify if the owner and family actually live there and use it principally as a dwelling.

Whether a particular tenancy is covered can depend on the rent during the relevant year, the identity of the occupant, the nature of the premises, and whether the unit became vacant.

The two-month ceiling for covered units

Section 7 of the Rent Control Act of 2009 provides that a landlord cannot demand:

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

The two-month limit concerns the total deposit, not merely each separate charge. For example, if the monthly rent is ₱8,000 and the tenant has already paid a ₱16,000 security deposit, the landlord cannot demand another refundable security amount from that tenant while the statutory ceiling applies.

If the tenant originally paid only one month’s deposit, an additional amount bringing the total to no more than two months may be legally possible. That does not necessarily mean the landlord can impose it unilaterally. The landlord must still point to a contractual basis, obtain the tenant’s agreement, or make it part of a lawful renewal arrangement.

What happens when the rent increases?

A lawful rent increase does not automatically answer whether the landlord may require the deposit to be “topped up.” Check the lease for a clause stating that the deposit must always equal a specified number of months of the current rent.

Even with such a clause:

the increased rent itself must be lawful;
the resulting total deposit must stay within the applicable two-month ceiling;
the computation should be provided in writing; and
the landlord should issue a receipt and update the written deposit record.

Without an applicable clause or a new agreement, the landlord should not treat a rent adjustment as automatic authority to rewrite the deposit obligation during an existing fixed lease.

Charges that may count as a deposit

The legal effect of a charge depends on its purpose and terms, not only its label. A separate amount may be treated as part of the deposit if it is refundable and is being held to secure possible:

unpaid rent;
electricity, water, telephone, internet, or other utility bills;
damage to the unit, fixtures, or accessories;
lost keys or access devices; or
other tenant obligations.

A genuine nonrefundable fee for a distinct service may be different, but it must have a lawful basis and should be clearly disclosed. A landlord should not use artificial labels to collect what is effectively more than the permitted security deposit.

Ask for a written explanation identifying whether each amount is refundable, what it secures, when it may be deducted, and when the balance must be returned.

Rules for holding and using the deposit

For a covered unit, Section 7 requires the deposit to 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 landlord may apply the deposit and its interest only to the extent necessary to cover such matters as:

unpaid rent;
unpaid utility bills; or
actual financial loss from damage to components or accessories of the premises.

Any forfeiture or deduction must be commensurate with the actual financial damage. The law does not authorize an automatic forfeiture of the entire deposit whenever there is a minor breach.

Ordinary deterioration from normal use is not the same as tenant-caused damage. Article 1665 of the Civil Code recognizes ordinary wear and tear, lapse of time, and inevitable causes when determining the tenant’s duty to return the property.

The Rent Control Act does not state a universal number of days within which every deposit must be refunded. The lease may supply a deadline. Even where no deadline is written, the landlord should account for deductions and return the balance without unreasonable delay after the amounts due can be determined.

Units outside rent-control coverage

For residential units outside the current statutory coverage—and generally for commercial leases—the contract is especially important.

Under Articles 1159 and 1306 of the Civil Code:

contractual obligations have the force of law between the parties;
contracts must be performed in good faith; and
parties may set their own terms as long as those terms do not violate law, morals, good customs, public order, or public policy.

Article 1308 also provides that a contract must bind both parties and that its validity or compliance cannot be left solely to one party’s will.

Accordingly, during a fixed lease, a landlord generally cannot create a new deposit obligation simply by sending a notice if the signed contract does not permit it. A valid change ordinarily requires the tenant’s consent.

At the end of the lease, the landlord may propose new terms—including a larger deposit—as part of a renewal offer. The tenant may accept, negotiate, or decline. If the tenant remains for at least 15 days after expiration with the landlord’s acquiescence and without prior notice to the contrary, Article 1670 may create an implied new lease and revive the other terms of the original agreement. The facts and communications at expiration therefore matter.

What a tenant should do after receiving a demand

1. Ask for the demand in writing

Request a written notice stating:

the amount requested;
the reason for the additional deposit;
the legal or contractual basis;
the deadline for payment;
whether the amount is refundable;
how it will be held; and
how the landlord calculated the new total.

Do not rely solely on a phone call or verbal instruction.

2. Review the complete lease

Check the original contract, renewal, house rules, annexes, move-in documents, and later amendments. Look for provisions on:

the number of months secured by the deposit;
deposit adjustments following a rent increase;
pets, utilities, keys, or additional occupants;
renewal conditions;
default and termination; and
refund deadlines and allowable deductions.

A landlord should not rely on a rule that was never incorporated into the agreement or validly accepted later.

3. Calculate every security amount already paid

List all refundable amounts, regardless of their labels. Compare their combined value with two months of the applicable rent if the tenancy is covered.

Keep advance rent separate from the deposit. Advance rent pays for occupancy during an identified rental period; a deposit secures future obligations and normally remains subject to accounting and refund.

4. Respond promptly and calmly

If the demand appears unlawful, explain the concern in writing. Identify the existing deposit, monthly rent, relevant lease clause, and statutory ceiling. Ask the landlord to withdraw or correct the demand.

If part of the amount is undisputed, consider offering to pay that portion without admitting liability for the remainder. Obtain legal advice before withholding regular rent, because rent arrears can create a separate ground for ejectment.

5. Propose a written settlement

Possible resolutions include:

withdrawing the additional charge;
limiting it to the amount needed to reach the lawful ceiling;
incorporating an agreed adjustment only upon renewal;
providing a payment schedule;
documenting a specific pet- or utility-related risk without exceeding the legal limit; or
completing a joint inspection instead of increasing the deposit.

Any settlement should state the total deposit after payment and confirm that no other security amount is being held.

Evidence to preserve

Keep copies of:

the signed lease and all renewals or amendments;
receipts, bank transfers, deposit slips, and acknowledgment messages;
the landlord’s demand and the tenant’s response;
advertisements or move-in offers showing the original terms;
rent-increase notices and prior rent receipts;
move-in and move-out photographs or videos;
the inventory and condition report;
utility bills and proof of payment;
repair quotations, invoices, and inspection reports;
messages about damage, keys, pets, or additional occupants; and
proof that the tenant attempted an amicable settlement.

Photographs should be dated where possible and should clearly show the room, fixture, or appliance involved. Preserve original digital files rather than only screenshots compressed by messaging apps.

If the landlord refuses to resolve the issue

An affected tenant may seek guidance from the Department of Human Settlements and Urban Development and may bring the dispute to the barangay for mediation.

Barangay conciliation is generally a prerequisite before court action when the parties actually reside in the same city or municipality, subject to the territorial rules and statutory exceptions under the Katarungang Pambarangay system. The proper barangay and procedure depend on the parties’ residences and the nature of the dispute.

A claim for the return of a definite amount of money may potentially qualify for the courts’ small-claims procedure if it falls within the current jurisdictional limit and satisfies the applicable rules. A dispute involving possession, eviction, an injunction, or other relief may require a different case. Confirm the correct remedy and venue with the court’s Office of the Clerk of Court, the Public Attorney’s Office if eligible, or a private lawyer.

A violation of the Rent Control Act may, after proper proceedings and conviction, carry a fine of ₱25,000 to ₱50,000, imprisonment of one month and one day to six months, or both. A disagreement over a deposit does not by itself establish criminal liability; the facts, coverage of the law, evidence, and court findings remain controlling.

A landlord cannot use self-help eviction

Even if a tenant refuses a disputed additional deposit, the landlord should not forcibly remove the tenant, change the locks, seize belongings, or use intimidation to recover possession.

Articles 536 and 539 of the Civil Code require a person claiming the right to possession to use the proper legal process when the current possessor refuses to surrender the property. The Rent Control Act likewise speaks of judicial ejectment on recognized grounds.

The legality of the deposit demand and the landlord’s right to end or decline to renew the lease are separate questions. A landlord may have a lawful remedy when a lease expires or the tenant commits a genuine breach, but possession must still be recovered through the procedure required by law.

Common mistakes

Treating advance rent and security deposits as the same thing.
Assuming every residential lease is covered without checking the monthly rent, relevant year, and occupancy history.
Looking only at the name of a charge instead of its real purpose.
Paying an additional amount without a receipt or written amendment.
Believing a landlord can change a fixed lease merely by issuing a notice.
Assuming the entire deposit may be retained for any breach.
Charging a tenant for ordinary wear and tear.
Withholding regular rent because the additional deposit is disputed.
Ignoring a renewal deadline or a formal demand to vacate.
Signing a quitclaim or move-out settlement without an itemized accounting.
Deleting messages or failing to document the unit’s condition.

When legal help is urgent

Seek prompt advice if:

the landlord threatens to change the locks, disconnect essential utilities, remove belongings, or use force;
a summons, barangay notice, demand to vacate, or court paper has been received;
the landlord claims the lease has expired and demands immediate surrender;
regular rent payments are being refused;
the deposit is substantial or deductions are unsupported;
the unit’s rent-control coverage is disputed;
the tenant is being asked to sign a waiver, confession of judgment, or new lease immediately; or
there are threats, harassment, or safety concerns.

If a landlord refuses to accept regular rent, document each attempted payment and obtain legal advice immediately. Rent Control Act procedures concerning consignation or deposit of refused rent contain specific timing requirements and should not be attempted casually.

Frequently asked questions

Can a landlord require three months’ deposit for a covered apartment?

No. The Rent Control Act limits the total deposit for a covered residential unit to two months’ rent.

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

Yes, that is the statutory maximum for a covered unit: up to two months’ deposit and up to one month’s advance rent. The amounts should be properly identified and receipted.

Is an additional pet deposit automatically illegal?

Not automatically. Its legality depends on coverage, the total security already held, and the contract. If it is refundable security for pet-related obligations, it may count toward the two-month deposit ceiling.

May the landlord increase the deposit whenever rent increases?

Not automatically. The rent increase must first be lawful, and the lease must support the adjustment or the tenant must validly agree to it. For a covered unit, the total deposit still cannot exceed two months of rent.

Can the landlord keep the entire deposit because the tenant broke a fixture?

Only deductions commensurate with the actual financial loss are authorized under the Rent Control Act. The landlord should provide an itemized computation and supporting evidence. The remaining deposit and applicable interest should be returned.

Does the deposit have to earn interest?

For a residential unit covered by the Rent Control Act, the deposit must be kept in a bank under the landlord’s account name, and the accrued interest must be returned to the tenant at the end of the lease.

Can the tenant use the deposit as the last month’s rent?

Not unless the landlord agrees or the contract expressly permits it. A security deposit is not automatically rent, and unilaterally treating it as rent may place the tenant in arrears.

Can the landlord terminate the lease if the tenant rejects a new deposit?

During a fixed lease, the answer depends on the contract, the validity of the demand, and whether the refusal constitutes an actual breach. At expiration, the landlord may choose not to offer a new lease, subject to applicable rent-control rules and the required legal process. The landlord may not forcibly evict the tenant.

Official sources

This article provides general legal information, not advice for a specific dispute. Lease wording, rent history, occupancy, notices, and supporting documents may change the result. Current law and official guidance were checked as of September 14, 2026.