Law only allows one-month advance rent and two months deposit

Persida Acosta

Persida Acosta

Dear PAO,
Both my daughter and niece are students on on-the-job traning. They are renting in a boarding house near Subic Bay, Olongapo City for a couple of months. While there is no written contract, we have agreed that the electric bill, such as the use of electric fan, will be included in the rent. I was required to pay one-month advance and one-month deposit. Is this correct? I was told that it will be considered as one-month stay if my daughter and niece exceed their stay by 3 days and for that, they will no longer return the one month deposit I paid. Is this also correct?

Dear MET,
It is common in contracts of lease that lessors often require from their lessees the payment of a security deposit and advance payment. This holds true whether the contract between the parties was made verbally or under a written agreement.

In the situation that you have presented before us, we do not see anything unlawful about the fact that the lessor required you to pay one-month advance and one-month deposit for the lease of the boarding space your daughter and niece are occupying, even though you have no written agreement. It is worth emphasizing that what the law provides is that the lessor cannot demand more than one month advance rent or more than two months deposit (Section 7, Republic Act (R.A.)No. 9653 otherwise known as the Rent Control Act of 2009). Please be mindful also that both the advance payment and the deposit shall be kept in a bank under the lessor’s account name during the entire duration of the lease agreement. Should any interest accrue therein, the same must be returned to the lessee at the expiration of the lease contract. However, the lessor has the authority to forfeit said deposits and interests if the lessee fails to settle the rent which has become due, the electric, telephone, water or other utility bills, or if he or she destroys any house components and accessories (Section 7, R.A. No. 9653).

Insofar as the amount that you may have to pay in case your daughter and niece exceed three days of the preceding month, the lessor may be correct in saying that you need to pay a month’s rent in full considering that you have no express contract as to the period of the lease. As provided for under Article 1687 of the New Civil Code of the Philippines “If the period of the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; x x x” Accordingly, if you will not be made to pay any additional amount for the month relating to that three-day stay, the one month deposit may be made to answer the same.

Insofar as the alleged harassment against your daughter and niece, you may confront the caretaker and reprimand her. If she continues despite your warning and if it is proven to be distressing, annoying or irritating to your daughter and niece, they may consider filing a complaint for unjust vexation pursuant to the provisions of Article 287 (2) of the Revised Penal Code.

We hope that we were able to answer your queries. Please be reminded that 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.


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