DTI issues Guidelines on the Concessions on Residential Rents, and Commercial Rents of MSMEs.

The Department of Trade and Industry (DTI) issued Memorandum Circular No. 20-12 dated 04 April 2020 setting forth the concessions on residential rents, pursuant to Section 4 (aa) of Republic Act No. 11469 or the Bayanihan to Heal As One Act, as well as on commercial rents for Micro, Small and Medium Enterprises (MSMEs), pursuant to the Inter-Agency Task Force for the Management of Emerging Infectious Diseases Resolution No. 18, Series of 2020.

MSMEs shall be defined as 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
Small : P3,000,001 – P15,000,000
Medium : P15,000,001 – P100,000,000

What are covered in the issuance?

The issuance covers concessions on the following:

(1) “Residential rent” which means any amount paid for the use or occupancy of a ‘residential unit’ which refers to bedspaces, rooms, dormitories, apartments, houses, buildings, and/or land on which another's dwelling is located used principally for residential or dwelling purposes; and

(2) “Commercial rent” which means any amount paid for the use or occupancy of a ‘commercial space’ which refers to land, offices, buildings, centers, shops, facilities and any other property used principally for commercial purposes, which denote any activity for which profit is the main aim or revenue is received.

What are the concessions on residential and commercial rents?

A. Concession on Residential Rents

A minimum of 30-day grace period shall be granted on residential rents falling due within the period of the Enhanced Community Quarantine (ECQ) without incurring interests, penalties, fees, and other charges.

B. Concession on Commercial Rents for MSMEs

A minimum of 30-day grace period shall be granted on commercial rents falling due upon MSMEs that have temporarily ceased operations within the period of the ECQ, without incurring interests, penalties, fees, and other charges.

MSMEs 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 contract as proof of tenancy.

The lessors of commercial rents for MSMEs may also extend greater generosity through the means provided for under Sec. 3.5 of the Issuance.

How is the 30-day grace period determined?

The 30-day grace period shall be the 30 calendar days following the last due date of the rent which fell due within the ECQ.

What if the rent was already paid?

Lessors are not obligated to refund residential and commercial rents paid by the lessees during the period of the quarantine. However, the lessor shall grant a minimum of 30-day grace period from the next due date of the residential/commercial rents without incurring interest, penalties, fees, and charges.

May one be evicted for failure to pay rent?

No eviction for failure to pay the residential or commercial rent due may be enforced within the 30-day period after the lifting of the ECQ.

What if the lessor refuses to provide a 30-day grace period?

Lessors who shall refuse to provide a 30-day grace period to lessees shall be penalized with imprisonment of not less than 2 months or a fine not less than Php 10,000.00, or both, at the discretion of the court.

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