Dear Attorney,

I hope this message finds you well. I am seeking your legal guidance regarding a tenancy matter involving a lessee who has consumed their advance payment and security deposit.

The lessee was given a 30-day notice to vacate after their advance payment was applied to cover the last month of their lease. However, they are now requesting an additional 15 days to stay in the property without payment before they vacate.

This situation is problematic because we are planning to offer the property as collateral for a loan. We are concerned that granting the requested extension might complicate matters further. We are keen to understand the best legal course of action in this scenario, particularly if the lessee continues to stay beyond the agreed period without payment.

What are the rights of the landlord in this situation, and how should we address this in accordance with Philippine law? Your advice would be greatly appreciated.

Sincerely,
[Concerned Property Owner]

Legal Guidance on Tenancy Concerns Under Philippine Law

The matter presented revolves around key issues concerning landlord-tenant relations, specifically the application of advance payments, the legality of extensions without rent, and eviction procedures. Below is a comprehensive discussion based on Philippine law to address the issue and provide actionable guidance.

1. Key Legal Provisions in Landlord-Tenant Relations

a. The New Civil Code of the Philippines

The New Civil Code (Articles 1654–1688) governs lease contracts, including landlord-tenant relationships. Key provisions include:

Article 1654: The landlord is obligated to allow the lessee to use and enjoy the leased property.
Article 1657: The tenant must pay rent at the agreed terms and surrender the property upon termination of the lease.

b. Republic Act No. 9653 (Rent Control Act of 2009)

The Rent Control Act regulates residential units with monthly rents of ₱10,000 or less in Metro Manila (or ₱5,000 or less in other urban areas). It also establishes tenant rights and landlord remedies, including eviction grounds and advance payment/security deposit usage.

c. Rules on Security Deposits and Advance Payments

Advance Rent: Intended to cover the initial or final month of the lease, as agreed upon in the contract.
Security Deposit: Held in escrow for damages or unpaid obligations; unused portions must be refunded to the tenant.

If the lease ends and advance rent/security deposits are applied, the tenant’s continued stay without payment may constitute unlawful detainer.

2. Rights and Obligations of the Landlord

The landlord has several remedies under Philippine law when a tenant violates the lease agreement:

a. Termination of Lease

A landlord may terminate a lease if the tenant fails to pay rent or overstays beyond the agreed term. Since the tenant was already served a 30-day notice, any stay beyond this period may be considered unlawful possession.

b. Demand to Vacate

The landlord must issue a written final demand for the tenant to vacate and pay any unpaid rents (if applicable). This step is crucial before initiating legal action.

c. Legal Action for Unlawful Detainer

Under Rule 70 of the Rules of Court, the landlord may file an ejectment case to recover possession of the property. The action must be filed within one year from the date of unlawful possession.

d. Right to Refuse Free Extensions

Landlords are not legally obligated to grant free extensions unless agreed upon in writing. Doing so may inadvertently create a verbal tenancy agreement, complicating eviction efforts.

3. Addressing the 15-Day Extension Request

a. Evaluate the Implications

Granting a free 15-day extension might:

Delay the landlord’s ability to repossess and use the property (e.g., for collateral).
Risk a misunderstanding that the extension constitutes a new agreement, potentially resetting eviction timelines.

b. Suggested Course of Action

Decline the Free Extension in Writing: Notify the tenant that further occupancy will require payment and specify the daily/weekly rent due for any extensions.
Set a Clear Deadline: Reiterate the termination date established in the initial 30-day notice.
Warn of Legal Action: Inform the tenant that failure to vacate will result in an ejectment case.

4. Filing an Ejectment Case for Unlawful Detainer

If the tenant refuses to vacate, the landlord may proceed with an ejectment case. Below is an outline of the process:

Step 1: File the Complaint

File the case in the Municipal Trial Court where the property is located.
Include the following:
- Proof of ownership or authority to lease the property.
- Copies of the lease agreement, demand letters, and other relevant documentation.

Step 2: Summons and Preliminary Conference

The court will issue a summons to the tenant, and a preliminary conference will be held to explore settlement possibilities.

Step 3: Court Decision

If no settlement is reached, the court will decide based on the evidence presented. Ejectment cases are summary in nature, ensuring swift resolution.

Step 4: Execution of Judgment

If the decision favors the landlord, the court will issue a writ of execution to enforce the eviction.

5. Practical Considerations

a. Balancing Legal Rights with Practicality

While pursuing legal remedies, consider the potential costs and delays of litigation. Negotiation may be more cost-effective if the tenant is willing to vacate promptly upon payment of fair compensation.

b. Securing the Property

To prevent complications, consider requiring the tenant to sign a quitclaim agreement upon departure, affirming that they have no further claims on the property.

Conclusion

Under Philippine law, the landlord has the right to enforce lease terms, demand unpaid rents, and recover possession of the property through proper legal channels. Granting a free 15-day extension is not obligatory and may complicate matters. A firm but lawful approach—combining clear communication and legal action if necessary—will best protect the landlord’s interests.