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Home Legal Advice DearPao Payment of deposit and advance rent by the lessee

Payment of deposit and advance rent by the lessee


Persida Acosta

Dear PAO,
My company reassigned me to our branch in Bulacan. Because of that, I need to look for a new place in since I am currently living in Vito Cruz, Manila. However, I was surprised when the owner of a vacant apartment near my new workplace told me that I have to pay three months’ advance rent and two months’ deposit. He also told me that I need to pay a total of P50,000 before I can transfer to his apartment. Can the owner really collect three months advance rent and two months deposit from me? Please enlighten me on the matter.

Dear Duke,
To answer your question, we shall refer to the following provisions of Republic Act 9653, “An Act Establishing Reforms in The Regulation of Rent of Certain Residential Units, Providing The Mechanisms Therefor And For Other Purposes”:


“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. xxx

“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.

“In the event, however, that the lessee fails to settle rent, electric, telephone, water or such other utility bills or destroys any house components and accessories, the deposits and interests therein shall be forfeited in favor of the latter in the amount commensurate to the pecuniary damage done by the former.” (Emphases supplied)

Taking the aforementioned law into consideration, it is thus clear that the owner of the apartment can only collect a one-month advance rent and two months’ deposit from you, which shall also be returned to you at the expiration of the lease contract. It is likewise provided that in case you fail to settle rent, electric, telephone and water bills or destroy any part of the house, the advance rent and deposit you paid shall be applied to such bills and damage. However, the owner of the house/apartment shall allow you to recover the excess on the deposit and the advance rent you paid at the beginning of your contract of lease.

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.

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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