Rent Increase Regulations for Uncontracted Apartments in the Philippines: A Comprehensive Overview

Renting residential spaces in the Philippines—whether under a formal, written contract or via informal arrangements—brings both landlords and tenants under the ambit of specific laws and regulations. This article provides a comprehensive discussion of rent increase regulations for so-called “uncontracted” apartments (i.e., rental arrangements without a written lease agreement) in the Philippine context.

1. The Legal Framework

1.1. The Civil Code of the Philippines

Basis of Lease Relationship
Even without a written lease agreement, Articles 1654 to 1688 of the Civil Code govern the landlord-tenant (lessor-lessee) relationship. A verbal or informal arrangement is still legally recognized as a contract of lease once an owner consents to the tenant’s possession of the property in exchange for rent.
Periodicity of Payment
Under the Civil Code, if there is no fixed term for the lease, it is presumed to be month-to-month if rent is paid monthly. This has implications for notice periods and possible termination.

1.2. The Rent Control Law (Republic Act No. 9653, as Extended)

Overview
Commonly known as the “Rent Control Act of 2009,” RA 9653 was enacted to regulate rent increases for residential units in specific rent brackets. Although originally set to expire, this law has been periodically extended (most recently by legislation or administrative issuances).
Scope and Coverage
Under RA 9653 (and its extensions), the rent control law typically covers:
- Residential units in Metro Manila and other highly urbanized cities where the monthly rent does not exceed Php 10,000.
- Residential units in all other areas where the monthly rent does not exceed Php 5,000.
If your monthly rental rate is within these amounts, the landlord is legally constrained by a cap on permissible rent increases.
Exemptions
If the monthly rent exceeds Php 10,000 in Metro Manila and other highly urbanized areas (or Php 5,000 in other places), the property is usually not covered by rent control. Landlords in that higher bracket have more flexibility in setting rent and rent increases, subject to general principles of contract law and fairness under the Civil Code.
Key Provision on Allowable Rent Increase
For apartments covered by RA 9653, the annual rent increase is typically limited to a certain percentage (often in the range of 7% to 10% per year, depending on the specific extension or administrative regulation in effect).
- Important Note: The exact allowable percentage can change over time due to new laws or extended regulations. It is crucial to check the latest issuance from the Housing and Urban Development Coordinating Council (HUDCC) or any successor agency (now under the Department of Human Settlements and Urban Development, DHSUD).

2. Applicability to “Uncontracted” (Informal) Apartments

Many landlords and tenants in the Philippines operate without a written lease agreement, relying on verbal understandings. However, the absence of a written contract does not remove the arrangement from legal governance.

If the apartment’s monthly rent is within the rent control threshold
- Landlords cannot unilaterally raise the rent beyond the maximum annual percentage increase set by RA 9653 (or subsequent issuances), even if the lease is only verbal.
- Any attempt to impose a larger increase could be challenged by the tenant through local Housing and Land Use Regulatory Boards (HLURB, now under DHSUD) or other appropriate agencies.
If the apartment’s monthly rent is above the rent control threshold
- The Rent Control Law does not apply.
- The rent increase is generally a matter of agreement between the landlord and the tenant.
- However, the landlord must still comply with notice requirements under the Civil Code or local ordinances before implementing any rent increase.

3. Notice Requirements for Rent Increases

3.1. Civil Code Provisions

In a lease without a fixed term (month-to-month arrangement), each month is treated as one lease period. The landlord must give the tenant prior notice at least 15 days (sometimes interpreted as one full lease period) before the intended effective date of the rent increase or termination.
For practical and evidentiary reasons, it is always advisable to provide written notice, even if the rental arrangement has always been verbal.

3.2. Under the Rent Control Law

If the unit is within Rent Control Law coverage, a landlord who wishes to increase the rent within the allowable limit must give at least a 30-day written notice to the tenant before the date of effectivity of the increase.
The increase must comply not just with notice requirements but also with the maximum percentage cap.

4. Rights and Obligations of Landlords and Tenants

Landlord’s Obligations
- Provide the tenant with a habitable dwelling space.
- Respect the tenant’s right to peaceful enjoyment of the property.
- Follow prescribed procedures and limits for rent increases if the unit is covered by the Rent Control Law.
- Give proper and timely notice of any rent increase or intention to terminate the lease.
Tenant’s Obligations
- Pay rent on time and in the manner agreed upon (even if only verbally).
- Maintain the property in good condition, subject to normal wear and tear.
- Comply with lawful rent increases after being duly notified (provided these increases do not exceed legal limits or violate any local ordinances).
Prohibited Acts under RA 9653
- Unlawful Ejection: Landlords cannot eject tenants simply to raise rent or circumvent the allowable increase.
- Exorbitant Increases: In covered units, imposing rent increases beyond the stipulated limit is unlawful.
- Refusal to Issue Receipts: Landlords are required to issue receipts for rent payments; failing to do so can be a ground for administrative or legal action.

5. Dispute Resolution

5.1. Barangay Conciliation

For minor conflicts or misunderstandings, the first step is often Lupon Tagapamayapa (Barangay Justice System). In many localities, parties must go through mandatory conciliation at the barangay level before filing any formal court or administrative case.

5.2. Department of Human Settlements and Urban Development (DHSUD) / HLURB

If a dispute involves violations of rent control regulations (e.g., excessive rent increase, refusal to adhere to allowable limits), the affected tenant can file a complaint with the HLURB (now under the DHSUD). They have quasi-judicial powers over lease disputes arising from violations of the Rent Control Law.

5.3. Courts

If conciliation or administrative remedies fail, disputes may be brought before the Municipal Trial Courts (MTC) or the Regional Trial Courts (RTC), depending on the nature and amount of the claim.

6. Practical Tips for Both Parties

Put Agreements in Writing
- Even if initially verbal, it is best practice to memorialize the terms (rent amount, payment schedule, any agreed rent increase) in writing—this reduces confusion and helps in case of disputes.
Track Rental Receipts
- Tenants should insist on official receipts for all rent payments, while landlords should comply with the requirement to issue receipts.
- These receipts help establish the monthly rent and the date of payment, which is crucial if rent control applicability or notice periods are contested.
Stay Updated on Extensions to RA 9653
- The Rent Control Law is extended periodically. Landlords and tenants should stay informed about new Implementing Rules and Regulations (IRRs) or legislative amendments that might alter the rent cap or threshold.
Maintain Open Communication
- Clear and respectful communication often prevents disputes. If a landlord needs to increase rent, an advance discussion or negotiation with the tenant may lead to a mutually acceptable arrangement.
Seek Legal Advice When in Doubt
- If a dispute escalates, consulting with a lawyer or visiting the local DHSUD/HLURB office can clarify rights and obligations before taking formal action.

7. Penalties for Violations

Under RA 9653 and its extensions, landlords who violate rent control provisions (e.g., by imposing unjustified rent increases or illegally evicting tenants) may face administrative fines or other penalties as determined by the DHSUD/HLURB.
Persistent or serious violations can lead to court cases for damages, illegal eviction, or breach of contract.

8. Conclusion

In the Philippines, “uncontracted” apartments—rentals without a formal written lease—are not exempt from legal requirements. Whether or not a landlord and tenant have a signed agreement, the Rent Control Act (RA 9653), if applicable, caps rent increases, and the Civil Code underpins fundamental landlord-tenant rights and obligations. Notice requirements, allowable annual rent adjustments, and dispute resolution protocols remain in force to protect both parties.

If you are a landlord or tenant involved in an uncontracted lease arrangement, you must be mindful of the following:

Determine if the rental rate falls under the Rent Control Law cap.
Abide by legal limits and notice periods for any rent increase.
Retain evidence of payment and terms (receipts, written notices).
Use local mediation or relevant administrative agencies for dispute resolution, as needed.

Staying informed and seeking timely advice from legal professionals or housing authorities helps ensure compliance and protects the rights of all parties involved.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. For specific concerns regarding rent increases and rental disputes, consult an attorney or contact your local DHSUD/HLURB office.