When people ask what “covered units” means under Article 1657 of the Civil Code, they are usually dealing with a lease problem: a rent increase, unpaid rent, repair dispute, deposit issue, or possible eviction. The important clarification is this: Article 1657 itself does not use the phrase “covered units.” Article 1657 states the basic obligations of a lessee, or tenant, in a lease. The phrase “covered units” is more commonly used in Philippine rent control rules to refer to residential rental units protected by special rent regulation. Understanding the difference matters because your rights and obligations may come from both the Civil Code and the Rent Control Act, depending on the type of property, rent amount, and tenancy situation.

What Article 1657 of the Civil Code Actually Says

Article 1657 of the Civil Code of the Philippines provides that the lessee is obliged:

To pay the price of the lease according to the terms stipulated;
To use the thing leased as a diligent father of a family, devoting it to the use stipulated; and if there is no stipulation, to the use inferred from the nature of the thing leased and the custom of the place; and
To pay expenses for the deed of lease.

You can read the official text in the Civil Code of the Philippines, Republic Act No. 386.

In simple terms, Article 1657 tells a tenant:

Pay rent as agreed.
Use the leased property properly.
Do not use the property for a purpose different from what was agreed.
Treat the property with ordinary care.
Pay the cost of preparing the lease document, unless the contract says otherwise.

This applies broadly to lease contracts in the Philippines, including leases of houses, apartments, condominium units, rooms, bed spaces, commercial spaces, equipment, or other things that may legally be leased.

Does “Covered Units” Appear in Article 1657?

No. The phrase “covered units” is not found in Article 1657.

When lawyers, landlords, tenants, government agencies, or online articles talk about “covered units,” they are usually referring to units covered by Republic Act No. 9653, also known as the Rent Control Act of 2009, and its continuing rent regulation issuances.

Under the Rent Control Act, a “covered unit” generally means a residential rental unit that falls within the law’s coverage based on:

the type of unit;
its use as a dwelling;
its monthly rent;
its location; and
whether the same tenant continues to occupy or renew the lease.

So, the correct way to understand the phrase is:

Term	What it usually means
Article 1657	The Civil Code rule on the tenant’s basic obligations
Covered units	Residential rental units protected by rent control rules
Covered residential unit	A residential unit that meets the rent control law’s coverage requirements
Leased thing	The property or object being leased under the Civil Code

Why People Confuse Article 1657 With “Covered Units”

The confusion happens because both Article 1657 and rent control rules deal with landlord-tenant relationships.

Article 1657 answers: What must the tenant do under a lease?

Rent control rules answer: Is this residential unit protected from excessive rent increases or certain ejectment practices?

They overlap in real life. For example, a tenant in a ₱9,000-per-month apartment in Quezon City may have obligations under Article 1657, but the unit may also be a covered residential unit under rent regulation rules. That means the tenant must still pay rent and care for the unit, while the landlord must also follow special limits on rent increases and ejectment.

Legal Basis: Civil Code Rules on Lease

Lease under Article 1643

Article 1643 of the Civil Code defines lease of things as a contract where one party gives another the enjoyment or use of a thing for a price certain and for a definite or indefinite period. It also states that no lease for more than 99 years is valid.

This is the foundation of ordinary lease contracts in the Philippines. Whether your lease is written or verbal, the basic Civil Code principles may apply.

Lessor’s obligations under Article 1654

Article 1654 says the lessor, or landlord, must:

deliver the property in a condition fit for the intended use;
make necessary repairs to keep it suitable for that use, unless otherwise stipulated; and
maintain the tenant in peaceful and adequate enjoyment of the lease.

This matters because Article 1657 should not be read as if only the tenant has duties. Lease is reciprocal. The tenant must pay and take care of the property, but the landlord must deliver and maintain a usable property.

Tenant’s obligations under Article 1657

Article 1657 gives the tenant’s core duties:

Tenant obligation	Practical meaning
Pay the rent	Pay the agreed amount on the agreed date and in the agreed manner
Use the property properly	Use it only for the agreed purpose, such as residential use if it is rented as a home
Exercise care	Avoid damage beyond ordinary wear and tear
Pay deed expenses	Pay expenses for the written lease document, unless the parties agree otherwise

Remedies under Articles 1658, 1659, and 1673

Article 1658 allows the lessee to suspend rent payment if the lessor fails to make necessary repairs or fails to maintain peaceful and adequate enjoyment of the leased property.

Article 1659 allows the aggrieved party to ask for rescission, or cancellation, of the lease and damages if the lessor or lessee violates Articles 1654 or 1657.

Article 1673 lists grounds for judicial ejectment, including non-payment of rent, expiration of the lease period, violation of lease conditions, and improper use of the leased property.

In practice, a landlord should not simply lock out a tenant, remove belongings, cut off water or electricity, or force entry. Ejectment normally requires the proper legal process in court.

Legal Basis: Rent Control Act and “Covered Residential Units”

The phrase “covered units” is more closely connected to the Rent Control Act of 2009, Republic Act No. 9653.

RA 9653 defines a residential unit broadly. It may include:

apartments;
houses;
land on which another person’s dwelling is located;
dormitories;
boarding houses;
rooms;
bed spaces; and
certain mixed-use premises if principally used as the owner’s dwelling.

It excludes motels, motel rooms, hotels, and hotel rooms.

Original coverage under RA 9653

Section 5 of RA 9653 originally covered:

Location	Monthly rent range under RA 9653
National Capital Region and other highly urbanized cities	₱1 to ₱10,000
All other areas	₱1 to ₱5,000

RA 9653 also authorized continuing rental regulation, allowing the housing authority to determine future periods of regulation, covered units, and allowable rent increases.

The current housing body involved is the National Human Settlements Board (NHSB) under the Department of Human Settlements and Urban Development (DHSUD).

Current rent cap for 2026

For 2026, government information based on NHSB Resolution No. 2024-001 states that a 1% rent increase cap applies to residential units:

occupied by the same tenants as of 2025;
with rent of ₱10,000 or less per month; and
where the tenant continues to occupy or renew the lease in 2026.

Residential units with rent above ₱10,000 per month in 2025 are excluded from the 2026 rental cap. New residential units built or leased out during the covered period may generally set their own initial rent. The DHSUD announcement is available through the Philippine Information Agency report on residential rent increases.

So What Does “Covered Units” Mean in Practical Terms?

A covered unit is a residential rental unit protected by rent control rules. It does not mean every leased property. It does not usually include commercial spaces, office units, warehouses, hotel rooms, or short-term transient accommodations.

A unit is more likely to be covered if:

It is used mainly as a home.
It falls within the rent threshold set by the applicable rent regulation.
The same tenant continues to occupy or renew the lease.
It is not expressly excluded by law or regulation.

A unit is less likely to be covered if:

it is a commercial lease;
it is a hotel, motel, or transient accommodation;
the rent exceeds the applicable threshold;
it is newly leased to a new tenant at an initial rent;
the unit is vacant and being offered to a new tenant; or
the dispute concerns ownership rather than lease rights.

How Article 1657 Applies to Covered Residential Units

Even if a residential unit is covered by rent control, Article 1657 still matters.

Rent control protection does not mean the tenant can ignore the lease. A covered tenant must still:

pay rent on time;
avoid unauthorized subleasing;
avoid using the unit for illegal or unauthorized purposes;
take care of the property;
report urgent repair needs;
avoid damaging the unit; and
return the property at the end of the lease, subject to ordinary wear and tear.

For example, if a tenant in a covered ₱8,000-per-month apartment stops paying rent for several months, the tenant cannot simply say, “Rent control protects me.” Rent control may limit rent increases and regulate ejectment grounds, but it does not excuse non-payment.

Likewise, if the lease says the unit is for residential use only, using it as a noisy commercial storage space, illegal gambling site, unlicensed dormitory, or unauthorized Airbnb-style rental may violate Article 1657.

Step-by-Step: How to Check If Your Rental Unit Is a “Covered Unit”

1. Identify the type of property

Ask first: is the property used mainly for dwelling?

Covered residential units may include:

apartment units;
house rentals;
condominium units rented as residences;
rooms for rent;
bed spaces;
dormitory spaces; and
boarding house rooms.

If the property is an office, store, warehouse, restaurant space, clinic, or purely commercial unit, rent control rules on covered residential units usually do not apply. Article 1657 may still apply as a general lease rule.

2. Check the monthly rent

For 2026, the practical threshold to check is whether the monthly rent was ₱10,000 or less under the applicable NHSB rent cap for continuing tenants.

Keep proof of rent, such as:

written lease contract;
official receipts;
bank transfer screenshots;
GCash or Maya payment records;
text or email confirmations;
handwritten receipts; or
ledger or rent book entries.

3. Check whether the same tenant continues to occupy the unit

The 2026 cap is aimed at units occupied by the same tenant as of 2025 who continues or renews in 2026.

This distinction is important. A landlord may generally set a new initial rent when a unit becomes vacant and is leased to a new tenant, subject to other applicable laws and fair dealing.

4. Check whether the unit is excluded

Common exclusions include:

hotel rooms;
motel rooms;
transient accommodations;
purely commercial spaces;
units above the rent threshold;
newly leased units where the law allows a new initial rent; and
arrangements not truly leases, such as some employer-provided accommodations depending on the facts.

5. Review your lease contract

Look for clauses on:

rent amount;
due date;
duration;
renewal;
use of the property;
subleasing;
utilities;
repairs;
deposits;
advance rent;
association dues;
penalties;
termination;
notice period; and
venue or dispute resolution.

A written lease is not always required for a lease to exist, but written terms make disputes much easier to prove.

6. Compare the contract with mandatory law

Even if the lease contract says something, mandatory law may override it.

For example, under RA 9653, for covered units, the lessor cannot demand more than:

one month advance rent; and
two months deposit.

The deposit must be kept in a bank under the lessor’s account name during the lease, and interest should be returned to the tenant at the end of the lease, subject to deductions for unpaid rent, utilities, or damage.

Common Real-Life Scenarios

Scenario 1: “My landlord increased rent from ₱9,000 to ₱12,000 in 2026.”

If you were the same tenant occupying the unit in 2025, paid ₱10,000 or less per month, and continued or renewed in 2026, the 1% cap may apply. Ask for the computation in writing and keep records of your previous rent.

If the landlord insists, consider barangay mediation first, especially if both parties are in the same city or municipality.

Scenario 2: “The landlord says Article 1657 means I must pay any increase demanded.”

Article 1657 requires payment of rent according to the terms stipulated. It does not give the landlord unlimited power to increase rent. Rent increases must be based on the contract and applicable law.

If the unit is covered by rent control, the rent cap may limit the increase even if the landlord wants more.

Scenario 3: “I used the unit as a small online selling storage area.”

This depends on the lease and actual use. If the unit remains principally residential and the activity is minor, it may not be a serious issue. But if the lease says residential use only and the activity causes foot traffic, noise, fire risk, HOA violations, or conversion into a commercial operation, the landlord may claim violation of Article 1657.

Scenario 4: “The unit has leaks, electrical problems, or unsafe conditions.”

The landlord has obligations under Article 1654 to make necessary repairs and maintain the tenant in peaceful and adequate enjoyment. If the dwelling is in a condition that creates imminent and serious danger to life or health, Article 1660 allows the tenant to terminate the lease at once by notifying the landlord.

Document the problem with photos, videos, written notices, repair estimates, barangay blotter entries, or inspection reports.

Scenario 5: “The landlord wants me out because the property was sold.”

For covered residential units, RA 9653 states that sale or mortgage of the leased premises is not by itself a ground to eject the tenant. The new owner may have rights as successor, but proper legal grounds and procedure still matter.

Scenario 6: “I am a foreigner renting in the Philippines.”

Foreigners may lease residential property in the Philippines, subject to immigration status, contract rules, and building or condominium policies. The constitutional restriction is mainly on ownership of private land, not ordinary residential leasing. Foreign tenants should make sure their lease documents, passport or ACR I-Card details, visa status, and payment records are consistent and updated.

For long-term or high-value leases, foreigners should also check whether notarization, apostille of foreign documents, board approvals for corporate lessees, or condominium house rules are required.

Practical Documents to Keep

Document	Why it matters
Lease contract	Proves rent, duration, renewal, and obligations
Receipts or payment records	Proves rent was paid and how much
Deposit and advance rent proof	Helps recover deposit or dispute excessive charges
Move-in photos/videos	Shows condition at the start of the lease
Repair notices	Shows landlord was informed
Barangay records	Useful if dispute goes to mediation or court
Demand letters	Important for ejectment or rent disputes
Utility bills	Helps resolve deductions from deposit
Condo or subdivision rules	Shows restrictions on use, pets, guests, parking, or renovations

For foreigners, also keep:

passport ID page;
visa or stay documentation;
ACR I-Card, if applicable;
local contact details;
notarized special power of attorney if someone else will act for you; and
apostilled foreign documents if required for related transactions.

Barangay, DHSUD, and Court Options

Barangay mediation

For many landlord-tenant disputes between individuals residing in the same city or municipality, barangay conciliation under the Katarungang Pambarangay system may be required before filing a court case. The Supreme Court has recognized barangay conciliation as a pre-condition in covered disputes under the Local Government Code and related rules.

Barangay proceedings are often faster and cheaper than going straight to court. In practice, hearings may be scheduled within days or weeks, depending on the barangay’s workload and whether the other party appears.

Bring:

lease contract;
receipts;
rent computation;
written notices;
photos;
messages;
valid ID; and
a clear summary of what you want resolved.

DHSUD or housing-related inquiry

For rent control concerns, tenants and landlords may check DHSUD issuances and public advisories. DHSUD policy announcements are especially important because rent caps may change by year.

Court ejectment case

If settlement fails and the issue is possession, the landlord may file an ejectment case, usually unlawful detainer, in the appropriate Municipal Trial Court, Metropolitan Trial Court, or Municipal Trial Court in Cities.

Under Rule 70, unlawful detainer generally involves a person who originally had lawful possession, such as a tenant, but unlawfully withholds possession after the right to possess ends. The case must be filed within the required period, commonly counted from unlawful withholding or from the last demand, depending on the facts.

Typical bottlenecks include:

defective demand letter;
failure to undergo barangay conciliation when required;
unclear lease terms;
lack of proof of unpaid rent;
disputes over whether the unit is covered by rent control;
wrong venue;
parties abroad or difficult to serve; and
attempts at self-help eviction, which can create separate legal exposure.

What Landlords Should Be Careful About

Landlords should avoid:

increasing rent beyond the applicable cap for covered units;
demanding excessive advance rent or deposit for covered units;
refusing to issue receipts;
cutting utilities to force a tenant out;
changing locks without legal process;
entering the unit without consent except in lawful emergency situations;
ignoring necessary repairs;
ejecting a tenant solely because the property was sold, if rent control protections apply; and
relying on verbal threats instead of proper written notices.

A landlord with a valid complaint should document the violation, send proper written notice, attempt barangay settlement when required, and file the proper case if needed.

What Tenants Should Be Careful About

Tenants should avoid:

assuming rent control means rent is optional;
withholding rent without documenting the legal basis;
subleasing without written consent;
using a residential unit for unauthorized business;
making structural changes without approval;
refusing reasonable inspection or repair access;
failing to report leaks, pests, or electrical hazards;
relying only on verbal promises; and
leaving without a written turnover record.

A tenant who wants to contest a rent increase should continue documenting payments and communications. If the landlord refuses to accept rent, RA 9653 provides for deposit or consignation options in certain cases, including depositing with the court, city or municipal treasurer, barangay chairman, or a bank in the name of and with notice to the lessor, depending on the facts.

Frequently Asked Questions

What does “covered units” mean in Philippine lease law?

“Covered units” usually means residential rental units covered by the Rent Control Act and related DHSUD or NHSB rent regulation issuances. It does not come from Article 1657 itself.

Is Article 1657 only for residential tenants?

No. Article 1657 is a general Civil Code rule on lease. It can apply to different kinds of leases, including residential and commercial leases, unless a special law provides a different rule.

Does Article 1657 allow my landlord to increase rent anytime?

No. Article 1657 says the tenant must pay rent according to the terms stipulated. Rent increases must still follow the lease contract and applicable laws, including rent control rules for covered residential units.

Are condominium units covered by rent control?

They can be, if they are rented as residential units and meet the applicable rent threshold and occupancy requirements. Many condominium rentals exceed the threshold, so they may not be covered by the rent cap, but the Civil Code and the lease contract still apply.

Is a bed space or room for rent a covered unit?

It may be. RA 9653 includes dormitories, boarding houses, rooms, and bed spaces offered for rent by their owners, subject to the law’s coverage and applicable rent thresholds.

What if there is no written lease contract?

A lease may still exist even if it is verbal, but proving the terms becomes harder. Receipts, messages, bank transfers, witness statements, and consistent payment history can help establish the lease terms.

Can a tenant be evicted from a covered unit?

Yes, but only through lawful grounds and proper process. Grounds may include non-payment of rent, unauthorized subleasing, expiration of the lease, legitimate need of the owner to repossess under conditions set by law, or necessary repairs under proper circumstances.

Can the landlord keep my deposit?

The landlord may deduct unpaid rent, utilities, or damage beyond ordinary wear and tear. The landlord should not treat the deposit as an automatic penalty. For covered units under RA 9653, deposit rules are specifically regulated.

What should I do if my landlord refuses to accept rent?

Document the refusal immediately. Under RA 9653, in certain cases involving rent refusal, the tenant may deposit the rent by way of consignation in court or with the city or municipal treasurer, barangay chairman, or a bank in the name of and with notice to the lessor. The exact option should match the facts and the applicable procedure.

Does rent control protect foreign tenants?

Rent control focuses on the residential unit and tenancy situation, not nationality. A foreign tenant renting a covered residential unit may benefit from the same rent regulation rules, while still needing to comply with immigration, contract, and building requirements.

Key Takeaways

Article 1657 does not use the phrase “covered units.”
Article 1657 states the basic obligations of a tenant: pay rent, use the property properly, exercise care, and pay expenses for the deed of lease unless agreed otherwise.
“Covered units” usually refers to residential units protected by the Rent Control Act and current DHSUD/NHSB rent regulation rules.
For 2026, the government-announced cap is generally 1% for qualifying residential units occupied by the same tenants as of 2025, paying ₱10,000 or less per month, and continuing or renewing in 2026.
A covered tenant must still pay rent and follow the lease. Rent control is protection against excessive increases and improper ejectment, not permission to violate the contract.
Landlords should follow proper notices, barangay conciliation when required, and court process for ejectment.
Tenants should keep contracts, receipts, photos, notices, and payment records because lease disputes are often won or lost on documentation.