yes_you_should_still_pay_rent

Yes, you should still pay rent

Date: 04 June 2020

A house provides shelter to a person and his/her family. It shields them from the elements and from the dangers of the outside. It provides a person – or a family for that matter – a sense of security. Needless to state, a roof over one’s head is one of the basic necessities of every human being.

A good number of our population lease the houses (including rooms, apartments, and other forms of leased accommodations) that they are living in. But with the imposition of the community quarantines in its different forms throughout the country many were unable to go to work or make a living. A question thus became apparent: Do we still need to pay our rent during the period of the community quarantine?

The simple answer to that question is yes, you still need to pay the rent.

 

It is true that there are provisions under our law which would excuse a person from non-compliance with a contract due to force majeure like the COVID-19 pandemic and the community quarantine that was imposed by the government preventing people from working or making a living. By way of example, Article 1174 of the Civil Code provides that “[e]xcept in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires assumption of risk, no person shall be responsible for those events which could not be foreseen, or which though foreseen, were inevitable.”

However, this will not excuse the lessee from non-payment of rent. Why? For the simple reason that the lessee was still in possession and continued to enjoy the benefits of the leased premises during the period of the community quarantine. It would be the height of injustice if we are to tell our lessors that we would not be paying rent because of the pandemic and the community quarantine which caused us to lose our livelihood in the meantime all the while still possessing and living in the very house that we are refusing to pay rent for.

Is there no hope for us then?

Well, there have been reports of lessors that, while not being legally obligated to, voluntarily waived the rent on the properties they lease out. This, they claim, is in because of the bayanihan spirit that we Filipinos are known for. Unfortunately, these lessors are very few and far in between.

 

For all those whose rent were not waived, is there any relief for them?

 

There actually is. Republic Act No. 11469 or the Bayanihan to Heal as One Act provides for a level of relief for lessees. Section 4 (bb) provides that during the pandemic, the President has the power to “[p]rovide for a minimum of thirty (30)-day grace period on residential rents falling due within the period of the enhanced community quarantine, without incurring interests, penalties, fees, and other charges.”

In relation to that the Department of Trade and Industry (DTI) issued Memorandum Circular No. 20-29 (MC No. 20-29) which provides for supplemental guidelines on the concessions on residential rents and commercial rents.

MC No. 20-29 prohibits any eviction on the ground of failure to pay the rent due for the entire period of the community quarantine. (Section 4)

On the payment of rent, MC No. 20-29 clarifies that the thirty (30) day grace period under the Bayanihan to Heal as One Act “shall commence from the lifting of the covered community quarantine or from the date that the tenant is allowed to resume employment or business operation, whichever comes first, without incurring interests, penalties, fees and other charges.” (Section 3.2)

MC No. 20-29 goes a bit further when it provides for amortization of the whole amount of the rent that fell due within the period of the community quarantine. The MC actually makes it possible for the entire amount of rent to be paid on installment for six (6) months starting on the end of the 30-day grace period stated above. This of course is subject to certain conditions, that is:

  1. the lessee shall provide the lessor a signed Promissory Note or letter, undertaking to pay the deferred rent/s in accordance with the MC; and
  2. failure thereof shall make such deferred rents due and demandable immediately following the end of the minimum grace period of thirty (30) days;

Any violation of the MC by either the lessor or the lessee can be a subject of a complaint to be filed with the DTI which will determine whether there is indeed a violation. If a violation is found, then the case would be forwarded to the Department of Justice for the filing of appropriate action subject of course to the filing of the complaint-affidavit of the complainant.

After almost three months of community quarantine, there is no doubt that we are in extraordinary times. Everyone’s lives have been turned upside down. Many of the things we could have easily done earlier in the year are more or less been banned for the foreseeable future – at least until a cure or vaccine is found. The lawmakers and the government at large are aware of this. This is reflected in the issuances they released such as the one discussed here. This is something that is designed to help with the burden of Filipinos and aid us in getting back up again.