Query: Can a tenant use the security deposit as payment for an unnotarized extension of their stay in a rental property?

In the Philippines, the relationship between landlords and tenants is governed by the Civil Code and the Rent Control Act for residential units. One common issue that arises is the handling of security deposits and the conditions under which a tenant can extend their stay beyond the original terms of the lease.

Legal Framework on Security Deposits:

Purpose of Security Deposit: The security deposit is primarily intended to cover damages to the property that exceed normal wear and tear, and outstanding bills left unpaid by the tenant. It is not automatically meant to cover rental payments unless explicitly agreed upon in the lease contract.
Return of Deposit: At the end of the lease term, the security deposit should be returned to the tenant after any deductions for repairs or unpaid utilities, provided that such deductions are justified with corresponding receipts or proof of expenditure.

Handling Lease Extensions:

Mutual Agreement Required: Any extension of the lease term should ideally be made through a mutual agreement between the landlord and the tenant. This agreement should be documented in writing to avoid any misunderstandings.
Notice of Extension: Tenants are generally required to give notice if they wish to extend their stay beyond the agreed lease term. The period required for this notice should be stipulated in the original lease agreement.
Use of Deposit for Rent: If a tenant proposes to use the security deposit as payment for an extended stay, this arrangement requires the landlord’s consent. The landlord is under no obligation to use the deposit for rent unless such an agreement is part of the lease.

Landlord’s Rights and Remedies:

Eviction for Overstaying: If a tenant overstays without proper agreement or legal justification, the landlord may initiate eviction proceedings as per the legal process outlined in the lease and local laws.
Rental Payment Enforcement: Landlords have the right to demand payment of rent as per the terms of the lease. Using a security deposit as a rent payment without consent can be challenged legally.

Conclusion: Tenants seeking to extend their stay or use their security deposit for rent should negotiate these terms with their landlords to amend the lease agreement appropriately. It is advisable for both parties to have clear, written agreements to prevent disputes and ensure that actions like the use of a security deposit for rent are mutually agreed upon and legally binding. Understanding and adhering to the legal standards helps maintain a fair and functional relationship between landlords and tenants.