Residential units with monthly rent of P10,000 or less may only be increased a maximum of 2.3 percent for the period January 1, 2025 to December 31, 2025, as per the National Human Settlements Board (NHSB) Resolution No. 2024-001. This adjustment is a reduction from the previously set four percent increase for the period January 1, 2024 to December 31, 2024.
The NHSB, as the sole policy-making body responsible for providing overall policy directions and program development to various key shelter agencies, acting upon the recommendation of the National Economic and Development Authority (NEDA), passed the new resolution.
The rental cap is being implemented to safeguard housing tenants in lower-income brackets and other beneficiaries from excessive rent increases. The measure was enacted pursuant to Republic Act No. 9653, commonly known as the Rent Control Act of 2009.
Hereunder are additional information to take note of:
Who are covered?
The rental cap applies to residential units currently occupied by the same tenants as of 2024, who pay P10,000 or less per month, and who will continue to occupy or renew their lease in 2025. Units with rents exceeding P10,000 per month are exempt from this restriction.
How is residential unit defined?
Residential unit refers to “an apartment, house and/or land on which another’s dwelling is located and used for residential purposes and shall include not only buildings, part or units thereof used solely as dwelling places, boarding houses, dormitories, rooms and bedspaces offered for rent by their owners, except motels, motel rooms, hotels, hotel rooms, but also those users 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.”
When can the increase start?
The rent adjustment is effective for new leases in 2025 only.
What if the unit becomes vacant?
If the unit becomes vacant in 2025, the lessor may increase the rent of a new tenant beyond the set limit. This increase is permitted because the new tenant is not covered by the aforementioned resolution. However, in the case of boarding houses, dormitories, rooms, and bedspaces, only one rent adjustment is allowed within the 2025, even if the increase limit has not been reached.
What about new units?
New residential units built and/or leased out in 2025 may set their own rent.
What happens in 2026?
A new limit of one percent shall apply to units occupied by the same tenants as of 2025, paying P10,000 or less per month, and who will continue to occupy/renew their lease in 2026. Residential units with rents above P10,000 per month in 2025 are excluded from the 2026 rental cap.
What if the lessor increases the rent above the cap?
The tenant is encouraged to seek alternative dispute resolution with his landlord or lessor through the Barangay Justice System’s mediation/amicable settlement process. Only if the same cannot be settled will it be adjudicated before the court.
Eventually, if the lessor is found guilty, he could face a fine of not less than P25,000 nor more than P50,000, or imprisonment of not less than one month and one day to not more than six months, or both, depending on the court’s decision.
Henry L. Yap is an Architect, Fellow of both Environmental Planning and Real Estate Management. He is one of the Undersecretaries of the Department of Human Settlements and Urban Development.
