Raising the Rent and Renewing: How Much, and When?

Two questions always arrive together: how much can I raise it, and when am I allowed to. The answer depends on whether your unit falls under rent control.

Is your unit covered?

Rent control in the Philippines applies to residential units whose monthly rent falls within a threshold set by government. Both that threshold and the permitted yearly increase are set by resolutions of the DHSUD and the National Human Settlements Board, and they do not stay the same from year to year.

Under current policy the allowed increase is low — around one percent a year at present, lower than the year before. Because it moves, do not rely on memory: check the latest DHSUD issuance before you send a notice. Our guide to rent control in the Philippines covers the scope in more detail.

If the unit is not covered — rent above the threshold, or commercial use — there is no set percentage. That does not mean anything goes. Your kontrata still governs.

What does your contract already say?

Before any statute, read your own contract. It is usually one of three:

• Fixed rent for the whole term. It cannot be raised until the term ends. This is the norm in a one-year lease.
• A written escalation. For example, a stated percentage in the second year. That is automatic if it is written, and it still has to fit within the cap if the unit is covered.
• Silent. If the tenancy runs month to month with no fixed term, you have more freedom — but you still owe proper notice, and the cap still applies if covered.

If there is a live contract and you want to change the figure before it ends, that is not an announcement. It requires agreement from both sides, normally through an addendum signed by both.

When to say it

The common mistake is raising it a week before expiry. The tenant is cornered, and even if they agree, they remember.

A better rhythm:

1. 60 days out: tell them the contract is ending and whether the rent is changing.
2. 45 days out: answer questions, and if they want a repair in exchange, discuss it.
3. 30 days out: get their answer. If they decline, you still have time to find someone; they still have time to move properly.

Many contracts already state a notice period for renewal or termination. Follow it even when your own plan is earlier.

How to say it

Put it in writing. Even if you are friendly and everything else happens over text, a rent increase should be a dated written notice that both of you keep a copy of.

State four things:

• The new amount and the date it starts
• The basis: the percentage, or a specific reason such as higher association dues
• The new term if they renew
• The date you need their answer by

Explanation is what takes the sting out. "Real property tax and subdivision dues went up, so I need to raise it by this much" lands very differently from "rent is going up next month."

Do the arithmetic on a vacancy

Before you settle on a number, price the alternative. One vacant month is a month with no income, plus cleaning, paint and advertising — plus the risk that the next tenant takes less care than the current one.

A moderate increase on a good tenant often leaves more in your pocket over a year than a large increase that costs you two months of vacancy.

Renewal is the time to fix things

If they renew, do not just change the dates. This is the moment to correct what you learned over the last year:

• Clarify electricity and water if it caused friction
• Update the house rules if the subdivision or condo changed theirs
• Write in the escalation for next year if you would rather not have this conversation again
• Check that the deposit still matches the current rent

How MagpaUpa helps

MagpaUpa has a setting for the maximum yearly increase allowed on covered units, and it warns you when the figure you entered goes past it. A renewal is a new lease at the new rent, while the full history of the old rent, invoices and payments stays intact. If the change happens mid-term, it goes in as an addendum — the original is never quietly overwritten. Try MagpaUpa.