House okays extension of Rent Control Law

Members of the House of Representatives have approved a bill that would extend the Rent Control Law which expired on Dec. 31 last year for another four years even as it lowered the ceiling allowed for increases from 10 percent to only four percent per annum.

The same proposal also imposed a one-year moratorium on rent hikes. One hundred eighty-six voted in favor of the bill.

House Bill (HB) 6098 was one of the 13 bills the House approved on third and final reading last Tuesday.

Among the bills approved on final reading are HB 5241 or proposed Investments and Incentives Code of the Philippines; HB 6072, An Act Expanding the Promotion of Breastfeeding, and HB 6052 which would require all voters to undergo biometrics registration for elections.

Speaker Prospero Nograles expressed elation over the final approval of the new Rent Control Law and other important legislations, saying it “compensated the unfortunate quorum problem that we had.”

“The passage of these measures was a responsive and collective action of both the leadership of the House and the members of the majority coalition with the critical cooperation of our colleagues in the minority,” the Speaker said in a statement yesterday.

Nograles, principal author of bill extending the Rent Control Law, considers the measure as among the “socio-economic safety nets needed to protect millions of low-income Filipino families from the global recession gripping even the strongest of economies.”

The proposed “Rent Control Act of 2009” covers all residential units in Metro Manila and other highly urbanized cities rented for P10,000 and below per month and those in other areas with monthly rent of not exceeding P5,000.

The bill provides that after the one-year moratorium, the rent of residential units covered by the measure shall not be increased by more than four percent annually as long as the unit is occupied by the same lessee.

When the unit becomes vacant, the landlord may set the initial rent for the next lessee, except in the case of boarding houses, dormitories, rooms and bed spaces offered for rent to students where the rent shall not increase more than once a year.

Exempted from the coverage of the law are rooms in a motel, hotel and resort.

If enacted, the new Rent Control Law grants the Housing and Urban Development Coordinating Council (HUDCC) the authority to continue the regulation of rental fees of certain residential units after the lapse of the one-year moratorium and the three-year period of regulation.

Under the proposal, HUDCC will be tasked to determine the residential units covered and to adjust the allowable unit on rental increases per year which shall not be more than the average monthly inflation rate on rentals of the immediately preceding year as determined by the National Statistics Office.

The measure prohibits the collection of more than one month as “advance rent” and two months “advance deposit.”

It also grants the lessor and the lessee the option to engage in a rent-to-own agreement that will result in the transfer of ownership to the latter. Such an agreement shall be expected from the limit on increase in rent. The Rent Control Law first took effect in 1999 and was extended twice, in 2002 and 2005. –Gerry Baldo, Daily Tribune