Understanding Philippine Laws on Tenant Screening: What Every Landlord Should Know

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The moment a landlord accepts a tenant’s payment, they enter a legal relationship shaped by at least two major pieces of legislation—Republic Act No. 9653, the Rent Control Act of 2009, and the Civil Code of the Philippines. Every decision, from how much deposit to collect to what information must be disclosed before a lease is signed, is bounded by these laws. For landlords, understanding these boundaries isn’t just about compliance; it directly determines which tenants you can safely accept, how much risk you carry, and what happens when things go wrong.

This matters right now because the rules are shifting. The National Human Settlements Board, through NHSB Resolution No. 2024-001, has set a maximum annual rent increase of just 1% starting in 2026 for covered units—down from 2.3% in 2025 and 4% in prior years. For a landlord with a unit renting at ₱10,000 a month, that means the annual increase is capped at ₱100. With that kind of constraint, choosing the right tenant from the start becomes far more consequential.

The Legal Framework That Shapes Tenant Selection

The first distinction every landlord needs to make is whether a unit falls under rent control or not. That single fact changes almost everything: how much rent can be raised, how much deposit can be collected, and what eviction rules apply. For units covered by RA 9653, the law sets hard ceilings. For units above the threshold, the Civil Code of the Philippines governs, leaving more room for negotiation—but also less statutory protection for the landlord if a dispute arises.

Location, Rent Level, and Unit Type Change Everything

The answers to most landlord questions depend on three factors: where the property is, how much the tenant pays, and what kind of unit it is. A condo in Makati renting for ₱25,000 a month faces almost none of the restrictions that apply to an apartment in a municipality renting for ₱4,000. The same lease terms that are perfectly legal for the first unit could be a violation for the second.

Take rent increases. For a unit covered by RA 9653, the maximum increase for 2025 is 2.3% for a tenant who stays on. From 2026, that drops to 1%. For a unit renting at ₱8,000 a month, that’s an ₱80 increase. But if the same unit becomes vacant, the landlord can set a new initial market rent without restriction—provided it stays within the applicable coverage threshold. This means turnover, not annual increases, becomes the primary lever for adjusting income on covered units.

Unit type also matters. Boarding houses, dormitories, and bedspaces for students fall under RA 9653, with rent increases allowed only once per year. Agricultural tenancies are governed by a completely separate law, Republic Act No. 1199 (the Agricultural Tenancy Act), which provides security of tenure for tenant-farmers. Condominiums and new constructions in their first five years are generally exempt from rent control, giving landlords more flexibility.

Fine Print That Catches Landlords Off Guard

Several rules in the Civil Code and RA 9653 routinely trip up landlords who rely on standard practices or verbal agreements. These are the details that turn a straightforward tenancy into a legal headache.

Deposit Handling and Interest

RA 9653 is specific: the security deposit, capped at two months’ rent, must be held in a bank account under the landlord’s name. The interest it earns, less any allowable charges, must be returned to the tenant at the end of the lease. The deposit and interest can only be forfeited to cover unpaid rent, unpaid utilities, or damage—and only to the extent of the actual pecuniary loss. Keeping the full deposit for minor wear and tear is not allowed.

Late Fees Must Be in the Lease

There is no default legal right to charge late fees. For a late fee to be enforceable, it must be explicitly stated in the lease agreement and must comply with local regulations, which may include mandatory grace periods and caps on the amount. Without a written provision, the landlord’s only remedy for late payment is to treat it as a breach of contract—and eventually, after three months of non-payment, to file for ejectment.

Subleasing Requires Written Consent

Unless the lease explicitly allows it, a tenant who subleases the unit or accepts boarders without the landlord’s written consent gives the landlord grounds for eviction. This is one of the more common disputes, especially in student-heavy areas. The rule applies to both partial and full subleasing, and to accepting bedspacers.

Sale of Property Doesn’t Terminate the Lease

A lease cannot be terminated by the landlord simply because the property is sold or mortgaged. The incoming owner is bound by the existing lease terms. Tenants cannot be required to vacate until the lease period expires. This means landlords must disclose existing leases to potential buyers, and buyers need to factor existing tenants into their plans.

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What to Do With This: Practical Steps for Landlords

The legal framework creates a clear set of actions landlords should take before, during, and after tenant screening. The goal is to minimize legal exposure while selecting reliable tenants.

Screen With the Right Information

There is no national landlord license or centralized tenancy register in the Philippines. Landlords have discretion in screening, but must work within the bounds of what is lawful to request. Common and defensible requests include proof of income (payslips, bank statements), a valid government-issued ID, and references from former landlords or employers. Asking for more than one month’s advance rent (for covered units) would violate RA 9653, so the screening criteria should not indirectly pressure a tenant into offering more than the legal limits.

• 1
  Verify Income and Stability

  Request at least two recent payslips or bank statements. For self-employed tenants, request bank statements covering six months or an ITR. Cross-check the address on the ID with the current residence.

• 2
  Contact References

  Call the previous landlord to ask about payment history, property care, and notice compliance. Call the employer to confirm employment status and tenure.

• 3
  Document the Screening Process

  Keep notes on who was screened, what documents were reviewed, and why a decision was made. This protects against claims of discrimination or arbitrary denial.

Write a Lease That Covers Everything

Oral leases are valid between parties but are weak evidence in court. A written lease should include: the address and description of the property, the monthly rent amount and due date, the lease duration, deposit and advance rent terms, subletting restrictions, maintenance responsibilities, and late fee provisions. For leases exceeding one year, a written contract is required to be enforceable against third parties. Both parties should keep a signed copy.

Register With BIR and (Soon) DHSUD

Landlords must register their rental activity with the Bureau of Internal Revenue, obtain a Tax Identification Number (TIN), issue BIR-accredited official receipts for every rent payment, and file applicable taxes. The annual BIR registration fee is ₱500 as of 2025. Local government units may require a Mayor’s Permit or Business Permit if the rental activity qualifies as a business. The Department of Human Settlements and Urban Development (DHSUD) is piloting an online Rent Registry that will require landlords of covered units to declare rent levels, deposits, and increases, with full rollout targeted for 2026.

Frequently Asked Questions

The rules around tenant screening in the Philippines are not about finding a perfect tenant—they are about knowing which legal boundaries apply to your specific property and tenant profile. The distinction between a covered unit and a non-covered unit determines far more than just the rent amount; it changes the entire legal relationship. Before you accept that first payment, verify that your lease, your deposit handling, and your disclosure practices match what the law actually requires.

If this was useful, you might also want to read The Philippine Rent Control Law: What Every Tenant Should Know.

Sources

Investing in Real Estate: A Look at Trends and Opportunities in the Philippines — Broader market context for landlords considering property investment in the current regulatory climate.

Investing in the Philippines Real Estate Market — Additional perspective on market dynamics and landlord considerations.

Republic Act No. 9653. Official Gazette, 2009.

Civil Code of the Philippines (Republic Act No. 386). Official Gazette, 1950.

NHSB Resolution No. 2024-001. Department of Human Settlements and Urban Development.

2022 Revised Rules on Summary Procedure. Supreme Court of the Philippines.