• Rent control law does not cover commercial space

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    Persida Acosta

    Persida Acosta

    Dear PAO,
    I am leasing a commercial space for P5,000 a month. My tenant who is a barbershop owner is insisting that I cannot evict him as yet because he is paying rent. He claims that under the Rent Control Law, the lessor cannot eject the lessee unless he fails to pay rent for at least three months. Our contract of lease has already expired. Can I force my lessor to leave because I am having a difficult time dealing with him? Besides, I don’t want to extend our contract anymore.    
    Ruben

    Dear Ruben,
    The contract of lease you entered into with your tenant is not covered by the Rent Control Law. Republic Act (R.A.) 9653 or the Rent Control Act of 2009, covers only residential units. Section 5 thereof provides:

    “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.”

    Clearly, the commercial space you are leasing to your tenant is not covered by the abovementioned law. It is the provisions of the New Civil Code of the Philippines that govern it. The code provides that a lessor may eject a lessee under the following circumstances:

    “Art. 1673. The lessor may judicially eject the lessee for any of the following causes:

    (1) When the period agreed upon, or that which is fixed for the duration of leases under Articles 1682 and 1687, has expired;

    (2) Lack of payment of the price stipulated;

    (3) Violation of any of the conditions agreed upon in the contract;

    (4) When the lessee devotes the thing leased to any use or service not stipulated which causes the deterioration thereof; or if he does not observe the requirement in No. 2 of Article 1657, as regards the use thereof.

    xxx”

    Since according to you the contract of lease has expired, you may compel your lessee to vacate the commercial space you are leasing to him. However, if you let him stay for fifteen days more after the expiration of the contract, an implied new lease is created (Article 1670, New Civil Code of the Philippines).

    The period of the new lease is not, however, the same with the stipulated period in the original contract agreed upon, but in accordance with Article 1682 of the New Civil Code of the Philippines, to wit:

    “Art. 1687. If the period for 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; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month.”

    Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

    We hope that we were able to guide you with our opinion on the matter.

    Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

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    4 Comments

    1. Juan dela Cruz on

      The lessor of the commercial space I’m renting at present handed me a new contract with only a 1-month duration. Previous contract was 1 year. I have been religiously paying my rent so now I’m confused and nervous because I invested a lot to put up this shop and apparently I can be evicted if the lessor wishes to do so after the new contract expires next month. Is there anything that can help me prevent that from happening?

    2. Atty. Roslee M. Formoso on

      Commercial leases are always covered by a contract which is controlling. It is stipulated that 90 days prior to the end of the lease, the lessee shall send “notice to renew” in writing otherwise his failure shall terminate the lease and Art. 1687, implied lease cannot be enforce. At the end of the lease without having renewed the lease the lessee shall be ejected from the premises.

      • Rafael Dela Cruz on

        My Landlord plans to evict me so that he can get a tenant that can pay more rent than I currently pay. We have no contract but I’ve been renting the place for 8 years, it is lawful for my landlord to evict me? Hope you could help me in this query. Thank you in advance.

    3. May I add, in commercial leases the contract is controlling, usually a stipulation common to is that before 90 days to expiration the lessee should manifest in writing that they wish to renew the contract for the same period and same terms and condition, otherwise failure to provide notice of intent to renew the contract is deem to terminated, and the lessee is to vacate prior or on the termination day. In commercial leases in real practice there is no such thing as implied renewal. Article 1687 cannot be applied because at the failure of the lessee to give notice to renew prior 90 days, the lease contract is deem ended and one day of occupancy without the renewal the lessor sue for ejectment or unlawful detainer.