Dear PAO,
My family and I have been renting a 30-square meter house. As my mother is a homemaker, my father, an office worker, helped her set up a small sari-sari store to keep her occupied by using a portion of the house for her merchandise displays. A window was converted to a counter to facilitate transactions. Prior to this, we asked permission from the lessor, to which she agreed.
However, last month, she informed us that she will raise the rent from P10,000 to P15,000. When we asked why the increase was so high, she said that since we converted a portion of the house to a sari-sari store, it became a commercial space and that we would have no problem paying the increase. Was our landlady correct? What should we do? A P5,000 increase in our rent greatly impacts our budget. We hope you can give us guidance.
-Kai
Dear Kai,
Before we delve into your question, we must first define what a residential unit is under the law. Under Section 4 of Republic Act 9341 (RA 9341), otherwise known as the “Rent Control Act of 2009,” a residential unit is defined as an apartment, house, and/or land on which another’s dwelling is located and used for residential purposes. It includes not only buildings, part or units thereof used solely as dwelling places, boarding houses, dormitories, rooms, and bed spaces offered for rent by their owners, but also those used for home industries, retail stores or other business purposes if the owner thereof and his or her family actually live therein and use it principally for dwelling purposes, excluding motels, motel rooms, hotels, and hotel rooms.
In your case, your family rented a 30-square meter house, which is primarily used as your family’s residence. However, because your father wanted your mother to have something to do, they set-up a sari-sari store by using a portion of the same house with minor conversions. Likewise, you sought prior permission from your lessor, and that she agreed thereto.
Following the definition of a residential unit under RA 9341, it appears that while a portion of the house was converted to a sari-sari store, the property remains a residential unit. This is because the house is still principally used by you and your family for dwelling purposes. Setting-up a sari-sari store on a portion of your rented unit did not change its nature as a residential unit.
Having established that the property remains a residential unit, we now address whether the increase of P5,000.00 is lawful. Under Section 3 of RA 9341, rent shall not be increased by more than 10 percent annually, as long as the unit is occupied by the same lessee, provided, that when the residential unit becomes vacant, the lessor may set the initial rent for the next lessee.
Here, the increase of P5,000 is a 50-percent increase from your current rent of P10,000. At most, your landlady may only add P700 to your current rent. She is only permitted to increase the rent to P15,000 should you vacate the property, and said amount shall be considered as the initial rent for her next lessee.
In order to set this matter straight, we suggest that you have a dialogue with your landlady and have a contract of lease drawn so that both parties are aware of their rights and obligations as lessors and lessees. Should your landlady refuse to have a dialogue with you, you may seek the assistance of your barangay lupon to help mediate between you and your landlady.
We hope that we were able to answer your queries. This advice was based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Thank you for your continued trust and support.
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
