Saturday, May 31, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
The Senate on Wednesday night ratified a new rent control law aimed at protecting housing tenants from unreasonable rent increases.
Senate Bill (SB) 3163 or the proposed "Rent Control Act of 2009" sets a cap on annual rent hikes.
Republic Act (RA) 9341 or the Rent Control Act of 2005, which had set a 10% annual limit to such increase, expired last Dec. 30.
Senate Majority Leader Juan Miguel F. Zubiri said President Gloria Macapagal-Arroyo would likely sign the new law after Congress goes on a break on June 6.
Congress is going to end its second regular session on June 5. The third regular session will open on July 27.
SB 3163 seeks to limit rent increases by not more than 10% annually, while the House version, House Bill (HB) 6098 which was ratified Tuesday night, puts the limit up to 4%.
Under the reconciled version of the two bills, the annual cap on rent increases was set at 7% for units being rented out for not more than P10,000 per month in Metro Manila and other highly urbanized cities and not more than P5,000 in other parts of the country. A one-year moratorium on rent increases upon effectivity of the proposed act was also provided.
The law will be effective until Dec. 31, 2013. After such period, the Housing and Urban Development Coordinating Council (HUDCC) will be authorized to study if the industry needs to be regulated or deregulated by the time the five-year mechanism lapses, taking into consideration latest statistics on number of rental units, prevailing rental rates, monthly inflation rate on rentals and prevailing rental rates.
Also, the HUDCC is mandated to conduct every three years from the law’s effectivity a review of its implementation and a study on rental regulation, and submit to Congress its recommendation on whether a continuing regulation is still necessary or deregulation is already warranted. — Jhoanna Frances S. Valdez