Dear Attorney,

I am writing to seek clarification regarding a situation with my current rental property. The rental contract has expired, and the landlord has requested that we vacate the premises. However, the landlord is also asking us to make additional payments after the contract's end. Is this legally permissible?

Sincerely,

Tenant with Lease Concerns

Insights

In the Philippines, the legal framework governing landlord-tenant relationships is primarily found under the Civil Code of the Philippines, Presidential Decree No. 1517 (Urban Land Reform Act), and Republic Act No. 9653 (Rent Control Act of 2009), particularly in residential leases. When a contract expires, both parties’ obligations are presumed to end unless renewed or extended. However, certain conditions and legal obligations may still arise depending on the specific circumstances.

Expiration of Lease Contracts

Under the Civil Code, a lease contract ends when the agreed-upon period expires. Article 1673 of the Civil Code allows either the lessor or lessee to terminate the lease at the end of the contract term unless specific circumstances justify its extension. Once the contract has expired, the tenant is no longer legally required to pay rent unless the parties agree otherwise, or the tenant stays beyond the contract’s expiration (referred to as "tacit renewal" or "implied new lease" under Article 1670 of the Civil Code).

Tacit Renewal (Implied New Lease)

According to Article 1670 of the Civil Code, if a tenant continues to occupy the leased property with the landlord's permission after the expiration of the contract, and without any express renewal agreement, the law considers the lease tacitly renewed or extended. This new lease will have the same terms as the previous one, except for the duration (now deemed to be month-to-month, in the absence of a fixed-term agreement). In this case, the tenant would be obligated to continue paying rent under the same conditions, though the landlord has the right to ask the tenant to leave with proper notice.

Grounds for Additional Payments

If the landlord asks for payments after the contract has expired, they must have a legal basis. Here are common situations where such additional payments may arise:

Holdover Rent: If the tenant stays on the property after the lease ends without the landlord's consent, they may be liable to pay rent for the extra period. The landlord has the right to claim compensation for the continued occupancy of the property.
Damage to Property: The landlord may claim additional payments for damages caused by the tenant during their stay. This claim may be covered by a security deposit if one exists.
Unpaid Bills and Utilities: Any outstanding bills, such as electricity, water, or maintenance fees, that remain unpaid at the time the lease expires must be settled by the tenant.
Contractual Obligations: If the lease contract contains clauses that specify post-expiration payments (e.g., cleaning fees, repair costs), these must be paid by the tenant, provided they are stipulated in the contract and not prohibited by law.

When Additional Payments Are Not Legal

A landlord cannot arbitrarily demand payments that are not based on legal obligations or provided for in the contract. For example:

If there is no agreement regarding the payment of rent after the lease has expired, and the tenant has vacated the premises on time, the landlord cannot demand additional rent or fees unless it is for legitimate causes (e.g., property damage or unpaid utilities).
The landlord cannot require the tenant to continue paying rent or other charges if they have already vacated the property unless there is a clause in the contract that explicitly allows for post-expiration payments, or there is proof of tenant's liability for damages or breach of contract terms.

Right of Ejectment and Grace Period

Landlords in the Philippines must follow legal procedures to eject tenants who refuse to vacate the premises after the lease ends. The process for ejectment is outlined under Rule 70 of the Revised Rules of Court. However, the landlord must provide reasonable notice before initiating any legal action. This can range from 15 to 30 days, depending on the situation and any agreements made during the lease term.

Rent Control Act (R.A. No. 9653)

The Rent Control Act imposes additional protections for tenants, particularly in residential properties with monthly rents below a certain threshold. While the law primarily limits rent increases during the lease period, it also provides additional protections to ensure tenants are not unfairly treated post-expiration. For properties covered under the Rent Control Act, landlords must follow the provisions of this law before asking for additional payments or instituting any eviction proceedings.

Summary of Legal Protections for Tenants

Expiry of Lease Contract: Once the contract ends, both parties are no longer bound by its terms, unless a new lease is implied (tacit renewal). However, certain obligations may continue, like settling unpaid bills or compensating for property damage.
Additional Payments: Landlords may only ask for additional payments if they are legally or contractually justified. Without a basis in the contract or law, such demands are not valid.
Tenant Rights and Ejectment: Tenants cannot be arbitrarily evicted. Proper legal processes and notice must be provided, especially if there is a disagreement over post-contract payments or continued occupancy.

Tenants facing this issue should carefully review their lease contract and consult legal counsel to ensure they are protected from unlawful demands for payment after a lease expires.