30-DAY GRACE PERIOD FOR RESIDENTIAL AND COMMERCIAL RENTS
By: Atty. Bayani B. Brillante, Jr.
To ease out the economic and financial burden of Filipinos during and after the Enhanced Community Quarantine (ECQ) which was extended until April 30, 2020, the Department of Trade and Industry (DTI) issued Memorandum Circular No. 20-12 Series of 2020 on April 4, 2020. The memorandum embodied the guidelines on the 30-day moratorium on residential and commercial rents for MSMEs (micro, small, medium enterprises) which ceased operations during the ECQ. This move was made pursuant to Section 4(aa) of RA 11469, otherwise known as the “Bayanihan to Heal As One Act” and the IATF-EID Resolution No. 18 Series of 2020 dated 01 April 2020. Accordingly, these measures will ensure that Filipinos will have a future after the ECQ with homes that they can live in and through jobs and employment provided by MSMEs.
The relief will be extended to (1) residential rents, and (2) commercial rents of MSMEsthat have ceased operations due to the ECQ.
Particularly, “residential rent” shall mean any amount paid for the use or occupancy of a residential unit, regardless of the mode and terms of payment. “Residential unit” shall refer to bed spaces, rooms, dormitories, apartments, houses, buildings, and/or land on which another’s dwelling is located used principally for residential or dwelling purposes.
On the other hand, “commercial rent” shall mean any amount paid for the use or occupancy of any other property used principally for commercial purposes, which denote any activity for which profit as the main aim or revenue is received. “MSMEs” refer to any business activity or enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation whose total assets inclusive of those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, must have value falling under the following categories:
- Micro : not more than P3,000,000
b.) Small : P3,000,001 – P15,000,000
c.) Medium : P15,000,001 – P100,000,000
Application of Concession
A minimum of thirty (30)-day grace period shall be granted on residential and commercial rents (of MSMEs that have temporarily ceased operations within the period of the ECQ) falling due within the period of the ECQ, without incurring interests, penalties, fees, and other charges. The cumulative amount of rents falling due within the ECQ, shall be equally amortized in the six (6) months following the end of the ECQ, and shall be added to the rents due on those succeeding months, without interest, penalties, fees, and charges. The minimum thirty (30)-day grace period is considered to be the 30 calendar days following the last due date of the rent which fell due within the ECQ.
Notwithstanding this mandated thirty (30)-day grace period, the lessors of the commercial unit may freely grant a more favorable term and condition that would mitigate the impact of ECQ to the lessee MSME’s.
For the MSME’s to be eligible to the moratorium, they shall signify to their respective lessors their request for assistance by providing supporting documents, such as, but not limited to, financial statements as proof of enterprise size, and/or lease contracts as proof of tenancy.
Non-enforcement of Eviction, Filing of Complaint and Penalty
In addition to the 30-day grace period, lessors are barred to enforce eviction in case of non-payment of the residential or commercial rent due. Such prohibition is imposed within the thirty (30)-day period after the lifting of the Enhanced Community Quarantine.
Any violation of the concessions may be brought before DTI’s Trade Enforcement Bureau (FTEB) or DTI Regional Offices either in person or electronically (via FTEB@dti.gov.ph). Upon findings of violation, appropriate criminal charge/s will be filed against the lessor before the Department of Justice (DOJ), without prejudice to the filing of other administrative cases.
Correspondingly, the lessors who shall refuse to provide 30-day grace period or the non-enforcement of eviction to lessees shall be penalized with imprisonment of not less than two (2) months or a fine of not less than ten thousand pesos (Php 10,000.00), or both, such imprisonment and fine, at the discretion of the court.
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