Wednesday, July 15, 2009

Rent control law signed

THis is indeed great news!

Rent control law signed

Seeking to provide a financial security blanket to about 1.55 million low income tenants, President Arroyo Tuesday signed the Rent Control Act of 2009 or Republic Act 9653 that puts caps on rental hikes.

In a simple ceremony at MalacaƱang's Rizal Hall, President signed the new rent control law that effectively extended the old law that expired last Dec. 31.

Among those who witnessed the signing were Vice President Noli de Castro, chairman of the Housing and Urban Development Coordinating Council (HUDCC), Senator Juan Miguel Zubiri and House Speaker Prospero Nograles, who co-authored the law.

"The significance of the rent control (bill) that was just signed by the President into law is somehow help to our lesser privileged citizens so that they will not bear the burden of uncontrollable increases in rentals," Executive Secretary Eduardo Ermita Rent control law signed said in an interview.

A consolidation of Senate Bill 3163 and House Bill 6098, RA 9341 sets a one-year moratorium on rent increases in houses, apartments and other residential units including boarding houses, dormitories, rooms and bed space covered by the law.

After the one-year moratorium, the law sets a cap of seven percent in rent increases per year until the end of December 2013.

R.A. 9653, or "An Act Establishing Reforms in the Regulation of Rent of Certain Residential Units, Providing the Mechanisms Therefore and For Other Purposes," retains many of the salient provisions of the previous Rent Control Law which expired last Dec. 31, 2008.

These include the rent units from P1 to P10,000 for Metro Manila and other highly-urbanized cities, and P1 to P5,000 for all other areas.

However, rented units which are used as motels, motel rooms, hotels and hotel rooms are not covered.

De Castro said the new law brings "much-needed relief" to housing tenants "and this is very much in the same vein as our recent reforms in the housing sector, especially in the Home development Mutual Fund (HDMF), to lower housing loans interest rates in order to bring down the monthly amortizations."

According to De Castro the new law "complements the government's efforts to ensure affordable housing, especially for those who are earning less."

"This brings much-needed relief to housing tenants during this time of crisis. The bottomline is to keep families' monthly expenses for housing low, so that they still have money for other needs," the Vice President said in a statement.

"This is very much in the same vein as our recent reforms in the housing sector, especially in the Home Development Mutual Fund (HDMF), to lower housing loans interest rates in order to bring down the monthly amortizations," he added.

Zubiri, principal author of measure in the Senate, said the new law would protect over 1.5 million households, as well as those renting rooms and bed spaces in dormitories and are exposed to possible abuse by property owners.

He said, "We have enacted into laws the Socialized and Low-Cost Housing Loan Restructuring Program; the Cheaper Medicines Act; Amendment to PSIC Charter or increasing the insurance on deposits by P500,000. The new Salary Standardization law and other similar laws which would help alleviate the sufferings and difficulties of our people in these hard and tying times," he said,

"That is why in the new Rent Control law, we even reduced the annual rate of increase of rent from the previous 10 percent to only seven percent," he said.

Zubiri, however, expressed disappointment that up to this day, "housing projects by private housing developers and even by the government housing agencies are not affordable to many Filipinos."

"It is imperative that we take steps to protect the interest of our fellow citizens who are forced by circumstances to rent, by one again enacting the Rent Control law," he said.

Last May, the Congress ratified the bill amending the Rent Control Act of 2005, which established reforms in the regulation of rent of certain residential units.

Violators of the newly-signed law risk to be slapped with stiffer fines ranging from P25,000 to P50,000 and face imprisonment of not less than one month and one day to not more than six months, or both.

The law will lapse in four years and the HUDCC is tasked to continuously regulate the rental of certain residential units, conduct review of its implementation, and formulate and implement a two-year transition program to cushion the impact in the event of a regulation-free rental housing market.

Prohibited under the new law is the advance rent payment of more than one month and a deposit of more than two month; and the sub-leasing of the rented property by the renters.

Under the law, the lessor has the right to eject the lessee on the following grounds: the renter assigns the lease or sub-leases the unit, the renter has arrears in rental payment for three months; the owner has legitimate needs to repossess his or her property and needs to make necessary repairs on the leased premises and the lease contract has expired.

Aside from Zubiri and Nograles, Sen. Rodolfo Biazon; Reps. Rodolfo Valencia, Teodoro CasiƱo and Amado Bagatsing espoused the newly-signed law.

"Congress did as much for the renting public. The rent increases of covered units will only be at 7 percent annually, as long as the unit is occupied by the same lessee. This is a big decrease on the cap which used to be 10 percent. Clearly, this is in favor of those who rent. The limit on rent increase will be effective until Dec. 31, 2013," Zubiri said.

"Until every Filipino family can afford to buy or build their own homes and until we can assure that our busiest districts are readily accessible by convenient and faster means of transportation even to those who do not live close by or in the rural areas or outside the urban centers, it is imperative that we support those who opted to rent for convenience and forced by circumstances, and to stretch the amount of their pay checks," he said.

Based on the new law, when the residential unit becomes vacant, the owner may set the initial rent for the next tenant.

However, in case of boarding houses, dormitories, rooms and bed spaces offered for rent to students, increase in rental should be allowed only once a year.

Under the new law, owners of residential units are allowed to impose not more than one month advance rent and not more than two months deposit.

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