Lessor wants to increase rent of residential apartment

Dear Pao,

Can I still increase the rent by 7 percent? I am a single parent who inherited my parents’ small residential apartment. Since I solely take care of my two children, I cannot afford to have a 9-5 job. So, I merely rely on the monthly rent being paid by my lessee to cover my family’s needs. I informed my lessee that I would be increasing her monthly rent by 7 percent. Please note that I have not increased her rent for the past three years. It is only now that I will implement an increase because all the prices of basic commodities have gone up, and I just can’t seem to stretch our budget anymore. My neighbor said that I can only increase up to 4 percent. Is my neighbor correct?

Nerissa

Dear Nerissa,

To properly address your concern, it is best to look into the pertinent laws, rules and regulations governing the lease of residential units. For one, we have Republic Act (RA) 9653, otherwise known as the Rent Control Act of 2009. Insofar as the lessor’s capacity to increase the amount of rent, Section 4 of RA 9653 specifically provides:

“Section 4. Limit on Increases in Rent. – For a period of one (1) year from its effectivity, no increase shall be imposed upon the rent of any residential unit covered by this Act: Provided, That after such period until December 31, 2013, the rent of any residential unit covered by this Act shall not be increased by more than seven percent (7%) annually as long as the unit is occupied by the same lessee: Provided, further, That when the residential unit becomes vacant, the lessor may set the initial rent for the next lessee: Provided, however, That in the case of boarding houses, dormitories, rooms and bedspaces offered for rent to students, no increase in rental more than once per year shall be allowed.”

Due to our government’s aim of continuously providing protection to residential tenants, while at the same time being responsive to socioeconomic factors which affect the availability and access to residential rental houses and units as well as the financial capacity of residential tenants, the Department of Human Settlements and Urban Development has approved National Human Settlements Board (NHSB) Resolution 2023-03, dated Oct. 13, 2023, which regulates rent covering the period of Jan. 1, 2024 to Dec. 31, 2024 for monthly rental rates that do not exceed Ten thousand pesos (P10,000). Said resolution expressly states:

“WHEREFORE, pursuant to the foregoing, the National Human Settlements Board hereby RESOLVES, as it is RESOLVED, to continue the rental regulation for the period January 1, 2024 to December 31, 2024 under the same terms and conditions provided under NHSB Resolution No. 2022-01, that for as long as the unit is occupied by the same lessee, the rent of any residential unit shall not be increased by more than four percent (4%) for the monthly rental rates of P10,000 and below;

“PROVIDED, that when the residential unit becomes vacant, the lessor may set the initial rent for the next lessee, provided that in case of boarding houses, dormitories, rooms, and bed spaces offered for rent to students, no increase in rent more than once a year shall be allowed;”

Taking these tenets into consideration, we submit that you may only increase the monthly rental rate of your lessee by up to 4 percent if her current rent is not more than P10,000, in consonance with National Human Settlements Board Resolution 2023-03. If her current rental rate for your residential apartment is more than P10,000, then you may increase her rent by 7 percent as your unit is no longer governed by RA 9653 and NHSB Resolution 2023-03.

We hope that we were able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated on.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]