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  • Writer's pictureZiggurat Realestatecorp

Advance monthly rental and deposit on a rental house

What is the advance monthly rental and deposit on a rental house with a monthly rent less than PHP 10,000.00?


In the Philippines, the typical practice for renting a house involves paying both a security deposit and advance monthly rent. However, please note that rental practices can vary depending on the landlord, location, and specific terms of the rental agreement.


[Definitions:


  1. Advance Monthly Rent: Landlords usually require tenants to pay at least one month's rent in advance before moving into the property. This is essentially a prepayment for the upcoming month of occupancy.

  2. Security Deposit: The security deposit is a refundable amount paid by the tenant to the landlord as a form of insurance against damages or unpaid bills. This deposit is typically equivalent to one to two months' rent. It serves as protection for the landlord in case the tenant damages the property or fails to pay rent.

  3. Advance Rent for Last Month: Some landlords also ask for an additional advance payment for the last month of the lease term. This is done to ensure that the tenant does not leave without settling their final month's rent.]


Please be informed that Sections 5, 7, and 13 of Republic Act 9653, otherwise known as "Rent Control Act of 2009," provide as follows:


"Section 5. Coverage of this Act. - All residential units in the National Capital Region and other highly urbanized cities, the total monthly rent for each of which ranges from One peso (P1.00) to Ten thousand pesos (P10,000.00) and all residential units in all other areas, the total monthly rent for each of which ranges from One peso (P1.00) to Five thousand pesos (P5,000.00) as of the effectivity date of this Act shall be covered, without prejudice to existing contracts.


"Section 7. Rent and Requirement of Bank Deposit. - Rent shall be paid in advance within the first five (5) days of every current month or the beginning of the lease agreement unless the contract of lease provides for a later date of payment. The lessor cannot demand more than one (1) month advance rent. Neither can he/she demand more than two (2) months deposit which shall be kept in a bank under the lessor's account name during the entire duration of the lease agreement. Any and all interest that shall accrue therein shall be returned to the lessee at the expiration of the lease contract.

"Section 13. Penalties. - A fine of not less than Twenty-five thousand pesos (P25,000.00) nor more than Fifty thousand pesos (P50,000.00) or imprisonment of not less than one (1) month and one (1) day to not more than six (6) months, or both, shall be imposed on any person, natural or judicial, found guilty of violating any provision of this Act." (Emphasis supplied).


Pursuant to the aforementioned provisions of the law, and for the reason that the monthly rent value of the house does not exceed P10,000, the owner of the house cannot charge an amount exceeding one month's advanced rent, and two months' deposit.

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