Dear Attorney,

I am a long-term tenant who has been renting a residential property for several years. Recently, I decided to end my tenancy and requested the return of my security deposit from the lessor. However, the lessor insists on withholding part of the deposit for repainting costs and other maintenance expenses. The lessor also insists that I personally finance and perform certain renovations (specifically, painting the entire house) before my deposit can be released. I am unsure whether these obligations are legally imposed on me or if the lessor is responsible for such repairs and general upkeep.

Could you please advise me regarding my rights under Philippine law concerning deposits, repairs, repainting obligations, and any related costs? I am uncertain how to protect my deposit and clarify my responsibilities versus my lessor’s. Any guidance on the matter would be truly appreciated.

Thank you very much for your time and assistance.

Respectfully,
A Concerned Tenant

LEGAL ARTICLE: A COMPREHENSIVE GUIDE TO RENTAL DEPOSITS, REPAINTING OBLIGATIONS, AND PROPERTY MAINTENANCE UNDER PHILIPPINE LAW

Disclaimer: This article is for general informational purposes only. It is not intended to replace legal counsel tailored to specific facts. Please consult a qualified attorney for detailed advice relevant to your particular situation.

I. Introduction

Leases of residential properties are governed primarily by the provisions of the Civil Code of the Philippines, along with other special laws such as Republic Act No. 9653 (the Rent Control Act of 2009, as amended). The rights and obligations of landlords (lessors) and tenants (lessees) in the Philippines include the payment of rent, proper use of the leased premises, and mutual observance of conditions outlined in the lease agreement. One of the most common concerns that arise at the end of a lease pertains to the refund of security deposits and whether the tenant is obligated to carry out repairs or repainting of the premises. This comprehensive discussion focuses on the relevant legal provisions, jurisprudence, and industry practices concerning the issue of who bears the responsibility to maintain or improve rental property and how deposit refunds should be handled.

II. Overview of Lease Agreements and Their Legal Basis

Definition of Lease
Under Article 1643 of the Civil Code of the Philippines, a lease of things is a contract where one party (the lessor) binds himself to grant the other (the lessee) the use of a thing for a price certain. In residential leases, the lessor provides the dwelling or residence for the tenant in exchange for monthly rent payments.
Freedom to Stipulate Terms
Article 1306 of the Civil Code provides that parties to a contract are free to establish any agreements, terms, and conditions as long as they are not contrary to law, morals, good customs, public order, or public policy. As a result, lease agreements often include specific provisions on security deposits, repairs, and the condition in which the premises should be returned.
Applicable Laws
- The Civil Code of the Philippines (Articles 1642 to 1688) contains general provisions applicable to lease contracts.
- Republic Act No. 9653 (Rent Control Act of 2009, as amended) applies to certain residential units with monthly rent not exceeding the threshold under the law. While it may not specifically address the intricacies of security deposits or repainting costs, it does provide some guidelines on rent increases and protections for tenants in selected jurisdictions.
- Local Ordinances and building regulations sometimes contain supplementary rules affecting lessors’ and lessees’ obligations. However, nothing in these ordinances will usually override the basic contractual relationship set forth in the Civil Code or the Rent Control Act, unless it expressly does so for public policy reasons.

III. Security Deposits: Legal Framework and Common Issues

Purpose of the Security Deposit
A security deposit is typically required by the lessor at the start of the lease to protect against potential damage to the property or non-payment of rent and utilities. It serves as a form of security for the lessor to ensure the tenant fulfills obligations as stated in the lease contract.
Amount of the Security Deposit
The typical practice in the Philippines is to require one to three months’ worth of rent as a security deposit, depending on the agreement. The Rent Control Act (RA 9653) does not explicitly regulate the maximum amount for a security deposit but states that deposits shall be kept by the landlord in a bank account (though not strictly enforced in practice).
Legal Treatment of Security Deposits
While not explicitly mandated by a single statute, prevailing practice and jurisprudence indicate that the security deposit must be returned to the tenant at the end of the lease term, minus any lawful deductions. Legitimate deductions typically include unpaid rent, unpaid utilities, and costs for repairs of damages beyond normal wear and tear.
Timing of Refund
The law and established jurisprudence suggest that the deposit be returned within a reasonable time after the end of the lease. Many lease agreements stipulate a specific period (e.g., 30 to 60 days) for the lessor to assess the premises for damage and determine whether any bills remain unpaid.
Deductions for Damages
- Ordinary Wear and Tear: The lessor generally cannot withhold the deposit for normal deterioration or usage of the property (e.g., minor scratches, peeling paint from normal usage, or slightly worn-out flooring).
- Excessive Damage: The lessor can deduct the cost of repairs if the tenant caused extensive damage to the property that goes beyond ordinary wear and tear (e.g., large holes in walls, broken windows, destroyed fixtures).
- Utilities and Rent Arrears: If the tenant still owes rent or has unpaid utility bills at the end of the lease, the lessor may apply the deposit to cover those amounts.
Remedies for Improper Withholding of Deposit
In case the lessor refuses to return the deposit without a valid reason, the tenant may:
- Send a written demand letter requesting immediate return of the deposit (minus justifiable deductions).
- Resort to mediation or arbitration if provided in the lease contract.
- File an action in court (e.g., small claims action if within jurisdictional limits) to recover the deposit.

IV. Repairs, Repainting, and Maintenance Obligations

One of the most contested aspects of the landlord-tenant relationship involves the allocation of responsibility for repairs, repainting, and general maintenance. Tenants often question whether they must renovate or repaint the entire property upon vacating.

General Rule Under the Civil Code
- Obligation of the Lessor: Article 1654 of the Civil Code states that the lessor is obliged to make all necessary repairs to keep the property suitable for its intended use. This usually includes structural repairs, roof repairs, plumbing, electrical wiring, and other major repairs.
- Obligation of the Lessee: Article 1657 requires the lessee to use the property with the diligence of a good father of a family and to return it in the same condition as it was when the lease began, except for ordinary wear and tear.
Normal Wear and Tear vs. Damage
- Normal Wear and Tear: Over time, paint fades, wallpapers peel, and floors develop scratches from everyday use. These are generally considered normal wear and tear. The tenant is not required to restore the property to a ‘brand-new’ condition.
- Damage Attributable to Tenant: If the tenant, for instance, placed large nails in the walls creating significant holes, or if they painted the property in drastically different colors without prior agreement, the lessor could reasonably demand restoration or withhold part of the deposit to cover repainting or repair costs.
Repainting the Entire Property
- Contract Stipulation: If the lease contract specifies that the tenant must repaint the property or restore it to its original color and condition upon vacating, the tenant may be contractually bound to do so (subject to fairness and reasonableness, and unless it is an unenforceable or unconscionable stipulation).
- Absence of Clear Stipulation: If no such clause exists, the general rule would place the obligation on the lessor to conduct major repainting, especially if it falls under normal wear and tear. The lessor cannot typically force the tenant to undertake or finance comprehensive repainting of the entire unit unless the damage is beyond the realm of normal usage or expressly agreed upon.
Minor Repairs vs. Major Repairs
Tenants are usually responsible only for minor or ordinary repairs required by their normal use of the premises (e.g., routine cleaning, replacing light bulbs, or minor fixes that do not involve structural or major system overhauls). If a lessor demands the tenant shoulder repairs that amount to significant restoration or improvement, that demand may be considered unreasonable unless provided in the lease agreement.

V. Analysis of the Scenario: Withholding of Deposit for Repainting

Based on the factual scenario described in the letter:

Long-Term Tenancy and Deposit Refund
The tenant has been renting for a few years and presumably paid a one-month deposit or more. At the end of the lease, the tenant wants the return of the deposit. The lessor refuses to refund it unless the tenant repaints the entire property or covers the cost of repainting.
Assessing Whether Painting is a Tenant’s Obligation
- Contractual Clause: The first question is whether the written lease expressly states that the tenant must repaint the house upon moving out. If there is no such provision or if it is vaguely stated, it will be subject to interpretation under Articles 1654 and 1657 of the Civil Code.
- Degree of Wear and Tear: If the paint condition is consistent with normal use over the period of the lease, the cost of repainting is likely the responsibility of the lessor, not the tenant. If, however, the tenant made significant changes (e.g., changing the paint color drastically or damaging the walls), it is fair for the lessor to ask for the property to be restored or for a corresponding deduction from the deposit.
Allocation of Costs
The lessor can only withhold the portion of the security deposit that covers the actual, reasonable cost of repair and repainting for damages beyond normal wear and tear or for breach of a specific provision in the lease. If the landlord withholds more than the actual cost, or requires the tenant to undertake improvements not mandated by the lease, the landlord may be acting beyond the scope of the law.
Best Practices and Resolution
- Inspection and Documentation: Before turning over the property, it is advisable for the tenant and the lessor to conduct a joint inspection and document the condition of the premises, noting any damages.
- Negotiation: Both parties should negotiate in good faith. If the paint is merely faded and no major damage exists, the tenant should not be compelled to repaint the entire house.
- Legal Action: If the landlord refuses to return the deposit without proper grounds, the tenant may consider sending a demand letter or availing of court remedies such as small claims if the withheld deposit falls within the jurisdictional amount.

VI. Legal Remedies and Practical Tips

Demand Letter
If negotiations fail, a formal written demand letter that cites the relevant provisions of the Civil Code and any applicable lease clauses is a straightforward first step. This letter can remind the lessor of their legal obligation to return the deposit, minus allowable deductions.
Mediation and Arbitration
If the lease contains an arbitration or mediation clause, or if the parties opt to pursue alternative dispute resolution, these avenues may offer faster, less adversarial settlements.
Small Claims Court
If the amount in dispute is within the threshold set by the Supreme Court’s Rules on Small Claims (generally not exceeding Two Million Pesos, though this figure is subject to updates), the tenant can file a small claims case. Small claims proceedings do not require extensive pleadings or representation by counsel and are meant to provide quick resolution.
Civil Action for Sum of Money
For deposits exceeding the small claims jurisdictional limit, a regular civil suit may be filed. However, litigation can be time-consuming and expensive, so negotiation or alternative dispute resolution is often more practical.
Keeping Comprehensive Records
Tenants should keep the following records:
- Copy of the lease agreement.
- Official receipts for rental payments.
- Records or photographs of the property’s condition at the start and end of the lease.
- Any written communications or notices exchanged with the lessor.

VII. Jurisprudential Insights

Although Philippine jurisprudence on the specific issue of repainting as a tenant’s obligation is not extensive, there are general rulings clarifying that:

Lessors are entitled to withhold deposits only to the extent necessary to cover arrears or damages caused by the tenant.
Tenants cannot be compelled to pay for normal wear and tear or routine property depreciation.
Written agreements and mutual stipulations in the lease contract are often upheld if they are not in conflict with mandatory legal provisions.

Where confusion arises, courts frequently look into the reasonableness of the lessor’s demands and whether the tenant violated the lease contract or caused unusual damage to the property.

VIII. Balancing Rights and Responsibilities

Both lessors and lessees must act in good faith and respect each other’s rights. Lessors are naturally inclined to preserve the value of their property, while tenants desire a peaceful stay without bearing disproportionate maintenance and repair costs. The law strives to balance these interests.

Good Faith Negotiation
Open communication about the condition of the property before the lease commences and prior to its termination can avoid future disputes. Transparency in the inspection process helps ensure that any deductions from the deposit are justified.
Fair and Reasonable Contract Stipulations
Lease agreements that require tenants to bear all costs of repainting, even for normal wear and tear, may be construed as unconscionable or unenforceable if they effectively shift the lessor’s responsibilities to the tenant. Courts might invalidate or modify such terms if they are deemed grossly one-sided.
Awareness of Legal Recourses
Tenants should be aware that the law does provide remedies if deposits are withheld without basis. Simultaneously, lessors should understand that a tenant’s deposit is not an automatic windfall to cover general improvements or renovations.

IX. Conclusion

Under Philippine law, the tenant’s obligation to repaint or otherwise restore a property to its original condition at the end of the lease largely depends on the contractual stipulations and the extent of any damage beyond normal wear and tear. A landlord can only deduct legitimate repair costs or rent arrears from the security deposit. Hence, blanket demands for the tenant to fund and execute comprehensive repainting—especially where no substantial damage exists—are often considered unreasonable unless explicitly stated and agreed upon.

Tenants who face a refusal by the lessor to return the deposit without a valid reason have recourse through demand letters, negotiation, mediation, and ultimately, legal action if necessary. Lessors, for their part, are advised to keep thorough records and base their deductions on actual damages attributable to the tenant. Transparency and adherence to fair leasing practices minimize conflicts and foster goodwill among parties.

X. Practical Checklist for Tenants and Landlords

Below is a brief checklist to help both tenants and landlords navigate the conclusion of a lease and avoid disputes over repainting or deposits:

Review the Lease Agreement
- Check for clauses on maintenance, repairs, repainting, and deposit return.
Conduct a Pre-Move-In Inspection
- Document and photograph existing property conditions. This helps distinguish pre-existing issues from tenant-caused damages.
Maintain Open Communication
- Inform the landlord promptly about any significant damage during the lease to avoid misunderstandings.
Schedule a Pre-Move-Out Inspection
- Conduct a walkthrough with the landlord, noting any potential issues, damages, or repairs needed.
Demand Letter if Necessary
- If the landlord unreasonably withholds the deposit, draft a formal demand letter referencing lease provisions and the applicable law.
Consider ADR or Small Claims
- If negotiation fails, small claims court or arbitration can be a less expensive and quicker route than full-blown litigation.

FINAL WORDS
Navigating the intricacies of security deposits, repairs, and repainting obligations can be daunting for both tenants and landlords. Philippine law aims to maintain fairness by ensuring that tenants are not forced to pay for more than actual damages caused, while also giving landlords a recourse for legitimate concerns about protecting their property. By understanding the legal framework, adhering to well-drafted lease provisions, and maintaining open lines of communication, both parties can reduce conflict and ensure an equitable, efficient resolution when the tenancy concludes.