More than a month’s advance rent illegal

Dear PAO,

I would like to ask about deposits regarding lease of an apartment unit. I have been looking for an apartment for residential purpose.

I came across an apartment which I consider renting but the lessor is asking for 2 months advance and 3 months deposit and he required me to issue checks for said amount. Is there a standard to be followed by the lessors in fixing the amount of advances and deposits?

B. Boy

Dear B. Boy,

There is a standard to be followed by lessors in fixing the amount of advances and deposits relative to lease of units for residential purposes. Republic Act (R.A.) No. 9653 entitled “An Act Establishing Reforms in the Regulation of Rent of Certain Residential Units, providing the Mechanisms therefor and for other purpose” or otherwise known as “Rent Control Act of 2009”. It is stated under Section 7 thereof that: “the lessor cannot demand more than one (1) month advance rent. Neither can he/she demand more than two months deposit which shall be kept in a bank under the lessor’s account name during the entire duration of the lease agreement. Any and all interest that shall accrue therein shall be returned to the lessee at the expiration of the lease contract. In the event however, that the lessee fails to settle rent, electric, telephone, water or such other utility bills or destroys any house components and accessories, the deposits and the interest therein shall be forfeited in favor of the latter in the amount commensurate to the pecuniary damage done by the former.”

You have stated that the lessor of one of the apartment units that you came across with is requiring his lessee’s payment of two (2) months advance and three (3) months deposit. The advance and deposit requirement of the lessor is beyond the amount fixed by R.A. No. 9653 as it only allowed not more than one (1) month advance and not more than two (2) months deposit. The lessor may be held liable for violating Section 6 of R.A. No. 9653 and if found guilty he may be liable for payment of fine of not less than twenty-five thousand pesos (P25,000) nor more than fifty thousand pesos (P50,000) or imprisonment of not less than one (1) month and one (1) day to not more than six (6) months or both.

As to the manner of payment, the law did not state if the deposit and advance shall be paid in cash. Thus, the manner thereof may be left to the agreement of the lessor and the lessee, provided that said amount would be deposited in the bank under the lessor’s account and all interests therein shall be returned to the lessee at the expiration of the lease contract.

Please be reminded that the above legal opinion is solely based on our appreciation of the problem that you have stated. The opinion may vary when other facts are stated. –Persida Acosta, Manila Times

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net.