• Rent hike for residential unit must not exceed 7% yearly

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    Dear PAO,
    I am a 4th year student in one of the universities along Recto Ave. in Manila. I am just renting bed space for P3,500 a month in one of the boarding houses near our school, considering the meager allowance I am getting from my parents. My problem began when my landlady raised the rent by 5% last January of this year, two months before our summer vacation. She again raised the rent by another 10% when classes resumed in June. I am just wondering if this is allowed by law?
    Rebb

    Dear Rebb,
    The business of renting residential units is regulated by law to some extent through Republic Act (R.A.) No. 9653 or the Rent Control Act of 2009. This law defines residential unit as follows:

    “SEC. 3. Definition of Terms. – The following terms as used in this Act shall be understood as:

    xxx

    (b) “Residential unit” shall refer to an apartment, house and/or land on which another’s dwelling is located and used for residential purposes and shall include not only buildings, part or units thereof used solely as dwelling places, boarding houses, dormitories, rooms and bed-spaces offered for rent by their owners, except motels, motel rooms, hotels, hotel rooms, but also those used for home industries, retail stores or other business purposes if the owner thereof and his or her family actually live therein and use it principally for dwelling purposes.”

    This law applies to 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) (Section 5, RA No. 9653).

    Likewise, the law sets limit on the increase the owner may impose on the rent of any residential unit which shall not exceed 7% annually as long as the unit is occupied by the same lessee (Section 4, RA No. 9653)

    Taking into consideration all the above provisions, your landlady has no right to increase your rent in excess of the 7% allowed by law per year. If she insists to collect the amount beyond the allowed increase per year, she may be held criminally liable for violating the above law. The penalty thereof is provided as follows:

    “SEC. 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 juridical, found guilty of violating any provision of this Act.”

    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 enlighten you on the matter.

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