Tenant Rights When a Rental Property Is Sold in the Philippines

Updated for general Philippine law and common practice; not a substitute for legal advice.

The core rule: a sale does not automatically end your lease

Under Philippine civil law, a lease is a contract that follows the property (“the lease runs with the land”). When your landlord sells the property, the buyer generally steps into the shoes of the old landlord and must honor your lease on the same terms—rent, term, use, and house rules—until it ends or is lawfully terminated.

What this means for you

Your right to stay continues for the lease term (or until lawfully ended if there is no fixed term).
Your obligations (paying rent, maintaining the premises, following house rules) continue unchanged.
The new owner becomes your lessor by operation of law—no need to sign a new lease unless you want to.

Fixed-term vs. month-to-month leases

1) Fixed-term lease (e.g., “12 months ending 30 June 2026”)

The buyer must respect the full term and cannot evict you simply because they bought the property.
Early termination requires a valid ground under your contract or law (e.g., serious breach, lawful demolition, etc.), plus proper notice and due process.

2) No fixed term / periodic lease (e.g., rent paid monthly with no end date)

By default, the lease is treated as month-to-month (or according to the rent period).
Either party may end it with proper written notice (commonly 30 days; some contracts specify longer).
The sale itself is not a ground for immediate eviction; notice rules still apply.

Rent Control Act considerations (if your unit is covered)

The Rent Control Act (as amended and periodically extended via implementing rules) caps annual rent increases for covered units and restricts eviction grounds. Coverage depends mainly on monthly rent ceilings that government updates from time to time.

If covered:

Sale is not, by itself, a lawful ground to evict.
Landlords may recover possession for personal use (owner or immediate family) with advance written notice (commonly at least 3 months under the rent control framework).
Annual rent increases are capped for covered units; sale does not reset or bypass these caps.
Deposits/advances are limited (commonly up to two months’ deposit and one month advance). The buyer inherits these obligations.

If not covered: your rights are largely contractual + Civil Code. Increases and termination are governed by your lease terms and general law (still no “automatic eviction” on sale).

Tip: Ask the new owner to confirm in writing whether they believe the unit is rent-control covered and, if not, why.

Security deposits and advances

Your security deposit and advance rent travel with the property. The buyer inherits the duty to hold, apply, and return these amounts under the lease.
Best practice on turnover:
1. The seller should give the buyer a deposit turnover acknowledgment; and
2. The buyer should give you a written assumption notice confirming the deposit amount received.
On move-out (or lease end), the new owner must refund any unused deposit subject to lawful deductions (e.g., unpaid rent, documented damages beyond normal wear and tear, and other contractually allowed charges). Ask for a final statement of account.

Who do you pay rent to after the sale?

Until you receive reliable written notice that ownership changed and where to pay, a good-faith payment to the old landlord may still discharge your obligation.
Once notified, you must start paying the new owner (or their authorized agent) to avoid being in arrears.
Ask for updated payment instructions and official receipts in the new owner’s name.

Notices: what’s required and what’s smart

From seller to tenant: Ideally, a Notice of Sale and Assignment of Lessor’s Rights stating the effective date, buyer’s details, and status of your account (deposit, rent balance, utilities).
From buyer to tenant: A Welcome/Assumption Letter confirming they are the new lessor, where to pay rent, and whom to contact for repairs.
From tenant: A short acknowledgment is prudent. Re-attach your latest payment proofs and the lease copy so everyone’s aligned.

Can the new owner change the rules or raise rent?

During a fixed term: No unilateral changes—the contract controls.
On renewal or if month-to-month: Changes (including rent increases) require proper notice and must comply with the Rent Control Act (if covered) and any notice periods in your lease.
House rules tied to safety/maintenance can be updated if reasonable and non-discriminatory, but they cannot contradict the lease.

Grounds and process for eviction do not change just because of a sale

A sale does not create new eviction rights. The buyer must rely on lawful grounds (non-payment, substantial breach, end of term with proper notice, owner’s personal use for covered units, lawful demolition/major repairs with permits, etc.) and must follow proper process (written demand/notice, barangay conciliation if applicable, and court action like unlawful detainer if you do not vacate).

Repairs, maintenance, and access after the sale

The new owner inherits the duty to maintain the property in a tenantable condition and to make necessary repairs not caused by your fault.
You must allow reasonable access for inspections/repairs with prior notice and at reasonable hours.
For major works (e.g., structural repairs or renovations), the owner should schedule with you, minimize disruption, and, if the work makes the unit uninhabitable, discuss temporary accommodation, rent abatement, or termination as your lease or law provides.

Subleases and assignments

Valid subleases or assignments allowed by your contract remain in force after the sale.
If the lease prohibits subleasing/assignment, the prohibition binds you under the new owner as well.
If you need to assign your lease (e.g., to a new tenant or your buyer of a business), obtain the new owner’s written consent if the lease requires it.

Registration/annotation and buyers “in good faith”

A registered/annotated lease (especially those exceeding one year) gives public notice and is ordinarily binding on subsequent buyers.
Even without annotation, a buyer who knew or should have known about your lease (e.g., you are visibly in possession) is typically bound.
Practical takeaway: Keeping a paper trail (executed lease, receipts, emails) and remaining openly in possession protect you against claims by a buyer that they “didn’t know.”

If the property is sold through foreclosure

If your lease predates the mortgage or the mortgagee consented to it, it is more likely to be respected by the foreclosure buyer.
If your lease postdates the mortgage without lender consent, the foreclosure buyer may have stronger rights to terminate—but still subject to proper notice and process.
Always ask the new owner (or bank’s asset management arm) for written clarification of their position on your lease and propose an orderly transition plan if they seek repossession.

Commercial tenants: special notes

Commercial leases often contain sale clauses (e.g., allowing termination or relocation on sale). These clauses generally carry over to the buyer.
Watch for break clauses, co-tenancy provisions (in malls), and assignment restrictions; sale does not erase them.
If your business invested in fit-outs, insist that the buyer honors restoration and removal timelines and any agreed buy-out formulas.

Taxes, receipts, and compliance

After turnover, the new owner should issue official receipts for rent and comply with withholding tax/expanded withholding (if applicable to you).
If you withhold taxes on rent, request the new owner’s BIR details and update your 2307 procedures accordingly.

Practical, tenant-friendly checklist

Get it in writing. Ask for a Notice of Sale from the seller and a Welcome/Assumption Letter from the buyer.
Confirm the numbers. Rent amount, due date, arrears (if any), security deposit on hand, and who holds utilities/water meter deposits.
Demand a deposit turnover acknowledgment. Keep a copy signed by seller and buyer (or two separate letters that match).
Verify rent-control coverage. If covered, remind the buyer of caps and eviction limits.
Keep paying on time—to the party who has properly notified you—and keep receipts.
Push back on premature eviction. Sale alone is not a ground to oust you. Insist on proper notice and legal grounds.
Negotiate if the buyer needs the unit. “Cash-for-keys” (relocation assistance) and a mutual release can make sense if you’re willing to leave early.
Mind the barangay step. Many landlord-tenant disputes require barangay conciliation before court.
Document condition. If the new owner takes over, conduct a joint inspection and update the move-in/move-out checklist.
Seek counsel early for foreclosure situations, unannounced rent hikes, or complex commercial terms.

Frequently asked questions

Q: Can the buyer force me to sign a new lease? A: No. Your existing lease stands. You may sign an amendment only if you agree.

Q: The new owner wants to live in my unit. Do I have to leave? A: If your unit is rent-control covered, “owner’s use” can be a ground with proper advance notice; otherwise, the contract governs until the term ends (or proper termination of a periodic lease).

Q: My lease ends soon. Can the buyer refuse renewal? A: Yes. There is generally no automatic right to renewal unless your lease grants it or rent-control rules say otherwise. Proper notice is still required.

Q: Who returns my security deposit? A: The current owner/lessor at the time you vacate—even if the deposit was paid to the prior owner.

Q: I paid the old landlord because I didn’t know about the sale. Am I in default? A: Good-faith payment before proper notice typically counts. Once notified, pay the new owner.

When to get professional help

You receive a demand to vacate immediately “because of the sale.”
A bank or asset manager claims your lease is void after foreclosure.
The buyer threatens lockout, utility cut-offs, or withholds your deposit.
There are disputes over rent-control coverage or big rent increases.

A short consult can often resolve matters via clear letters, proper notices, and, if needed, barangay mediation—saving everyone time and cost.

Bottom line

A change in ownership does not change your rights overnight. Your lease—and the law—continue to protect your possession, deposit, and agreed terms. Insist on proper notice, lawful grounds, and clear documentation.