Congress of the Philippines Twelfth Twelfth Congress REPUBLIC ACT NO. 9161
Dee!"er ##$ #%%1
AN ACT E&TABLI&'IN( RE)OR*& IN T'E RE(ULATION O) RENTAL& O) CERTAIN RE&IDENTIAL UNIT&$ PRO+IDIN( T'E *EC'ANI&*& T'ERE)OR AND )OR OT'ER PURPO&E& Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: &etion 1. Short Tittle. Tittle. – This ACT shall be known and cited as the "Rental Reform Act of 2002" &etion #. Declaration of Policy . – The State shall for the common good, undertake a continuing of urban land reform an housing which will make aailable at affordable cost decent housing and basic serices to under!riileged and homeless citiens in urban centers and resettlement areas. Toward oward this end, the State shall establish reforms in the regulation of retails of certain residential units. &etion ,. Monthly Rental and Maimum !ncrease. !ncrease . – #eginning 0$ %anuar& 2002 and for a duration of three '() &ears thereafter ending on ($ *ecember 200+, the monthl& rentals of all residential units in the ational Ca!ital Region and other highl& urbanied cities not e-ceeding Seen thousand fie hundred !esos '/,00.00) and the monthl& rentals of all residential units is all other areas not e-ceeding 1our thousand !esos '+,000.00) shall not be increased annuall& b& the lessor, without !reudice to e-isting contracts, b& more than ten '$03). &etion -. Definition of Terms. Terms. – The following terms as used in this Act shall be understood as4 'a) "Rental" shall mean the amount !aid for the use or occu!anc& of a residential unit whether !a&ment is made on a monthl& or other basic. 'b) "Residential unit" shall refer to an a!artment, house and5or land on which another6s dwelling is located and used for residential !ur!ose and shall include not onl& buildings !arts or units thereof used solel& as dwelling !laces, boarding houses, dormitories, rooms and beds!aces offered for rent b& their owners, e-ce!t motels, motel rooms, hotels, hotels rooms, but also those used for home industries, retail stores or other business !ur!oses if the owner thereof and his or her famil& actuall& lie therein and use it !rinci!all& for dwelling !ur!oses. 'c) "7mmediate members of famil& of the lessee or lessor" for !ur!oses of re!ossessing the leased !romises, shall be limited to his or her s!ouse, direct descendants or ascendants, b& consanguinit& consanguinit & or affinit&. 'd) "8essee" shall mean the !erson renting a residential unit. 'e) "9wner58essor" shall include the owner or administrator or agent of the owner of the residential unit.
'f) "Sublessor" shall mean the !erson who leases or rents out a residential unit leased to him b& an owner. 'g) "Sublessee" shall mean the !erson who leased or rents out a residential unit from a sublessor. 'h) "Assignment of lease" shall mean the act contem!lated in Article $:+; of the Ciil Code of the hili!!ines. &etion . Rental and Deposit . – Rental shall be !aid in adance within the first fie ') da&s of eer& current month or the beginning of the lease agreement unless the contract of lease !roides for a later date of !a&ment. The lessor cannot demand more than one '$) month adance rental and two '2) month6s de!osit. &etion 6. "ssignment of #ease of Subleasing . – Assignment of lease of subleasing of the whole or an& !ortion of the residential unit, including the acce!tance of boarders or beds!acers, without the written consent of the owner5lessor is !rohibited. &etion /. $rounds for %udicial &'ectment . – <ectment shall be allowed on be the following grounds= 'a) Assignment of lease or subleasing of residential units in whole or !art, including the acce!tance of boarders or beds!acers, without the written consent of the owner5lessor. 'b) Arrears in !a&ment of rent for a total of three '() months roided. That in the case of refusal b& the lessor to acce!t !a&ment of the rental agreed u!on, the leased ma& either de!osit b& wa& of consignation, the amount in court, or with the cit& or munici!al treasurer, as the case ma& be, or in a bank in the name of and with notice to the lessor, within one '$) month after the refusal of the lessor to acce!t !a&ment. The lessee shall thereafter de!osit the rental within ten '$0) da&s of eer& current month. 1ailure to de!osit the rental for three '() month shall constitute a ground for eectment. 7f an eectment case is alread& !ending, the court u!on !ro!er motion ma& order the lessee or an& !erson or !ersons claiming under him to immediatel& acate the leased !remises without !reudice to the continuation of the eectment !roceedings. At an& time, the lessor ma&, u!on the authorit& of the court, withdraw the rentals de!osited. The lessor, u!on authorit& of the court in case of consignation or u!on oint affidait b& him and the lessee to be submitted to the cit& or munici!al treasure and to the bank where de!osit was made, shall be allowed to withdraw the de!osits= 'c) 8egitimate need of the owner5lessor to re!ossess his or her !ro!ert& for his or her own use or for the use of an& immediate member of his or her famil& as a residential unit4 Provided( ho)ever . That the lease for a definite !eriod has e-!ired4 Provided( further , That the lessor has gien the lessee formal notice three '() months in adance of the lessor6s intention to re!ossess the !ro!ert& and4 Provided finally = That the owner5lessor is !rohibited from leasing the residential unit or allowing its use b& a third !art& for a !eriod of at least one &ear from the time of re!ossession= 'd) eed of the lessor to make necessar& re!airs of the leased !remises which is the subect of an e-isting order of condemnation b& a!!ro!riate authorities concerned in order to make the said !remises safe and habitable4Provided . That after said re!air, the lessee eected shall hae the first !reference to lease the same !romises4 Provided( ho)ever . That the new rental shall be reasonabl& commensurate with the e-!enses
incurred for the re!air of the said residential unit and4 Provided( finally = That if the residential unit is condemned or com!letel& demolished, the lease of the new building will no longer be subect to the aforementioned first>!reference rule in this subsection= and 'e) <-!iration of the !eriod of the lease contract. &etion 0. Prohibition "gainst &'ectment by Reason of Sale or Mortgage. – o lessor or his successor>in>interest shall be entitled to eect the lessee u!on the ground that the leased !remises hae been sold or mortgaged to a third !erson regardless of whether the lease or mortgage is registered or not. &etion 9. Ret*to*+)n Scheme, – At the o!tion of the lessor, he or she ma& engage the lessee in a written rent>to>own agreement that will result in the transfer or ownershi! of the !articular dwelling in faor of the latter. Such an agreement shall be e-ce!t from the coerage of Section ( of this Act. &etion 1%. "pplication of the Civil Code and Rules of Court of the Philippines, – <-ce!t when the lease is for a definite !eriod, the !roisions of !aragra!h '$) of Article $:/( of the Ciil Code of the hili!!ines, insofar as the& refers to residential units coered b& this Act, shall be sus!ended during the effectiit& of this Act, but other !roisions of the Ciil Code and the Rules of Court on lease contracts, insofar as the& are not in conflict with the !roisions of this Act shall a!!l&. &etion 11. Coverage of this "ct . > All residential units in the ational Ca!ital Region and other highl& urbanied cities the total monthl& rental for each of which does not e-ceed Seen thousand fie hundred !esos '/,00.00) and all residential units in all other areas the total monthl& rental for each of which does not e-ceed 1our thousand !esos '+,000.00) as of the effectiit& date of this Act shall be coered, without !reudice to e-isting contracts. &etion 1#. Penalties. > a fine of not less than 1ie thousand !esos ',000) nor more than 1ifteen thousand !esos '$,000.00) or im!risonment of not less than one '$) month and '$) da& to not more than si- ':) month or both shall be im!osed on an& !erson,natural or uridical, found guilt& of iolating an& !roision of this Act. &etion 1,. !nformation Drive. > The *e!artment of the 7nterior and 8ocal ?oernment and the @ousing and rban *eelo!ment Coordinating Council, in coordination with other concern agencies, are hereb& mandated to conduct a continuing information drie about the !roisions of this Act. &etion 1-. Transition Program. > The @ousing and rban *eelo!ment Coordinating Council is hereb& mandated to formulate, within si- ':) months from effectiit& hereof, a transition !rogram which will !roide for safet& measures to cushion the im!act of a free rental market. &etion 1. Separability Clause. > 7f an& !roision or !art hereof is held inalid or unconstitutional, the remainder of the law or the !roision not otherwise affected shall remain alid and subsisting. &etion 16. Repealing Clause. > An& law, !residential decree or issuance, e-ecutie order, letter of instruction, administratie order, rule or regulation contrar& to or inconsistent with, the !roisions of this Act is hereb& re!ealed, modified or amended according.
&etion 1/. &ffectivity Clause. > This Act shall take effect on 0$ %anuar& 2002 following its !ublication in at least two '2) news!a!ers of general circulation. A!!roed, (LORIA *ACAPA(ALARRO2O resident of the hili!!ines
REPUBLIC ACT NO. 7279 AN ACT TO PROVIDE FOR A COMPREHENSIVE AND CONTINUING URBAN DEVELOPMENT AND HOUSING PROGRAM, ESTABLISH THE MECHANISM FOR ITS IMPLEMENTATION, AND FOR OTHER PURPOSES.
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Article I TITLE, POLIC!, PROGRAM AND DEFINITION OF TERMS Secti"# $. Title - This "ct shall be .no)n as the /0rban Development and Housing "ct of 1223,4 Secti"# 2. Declaration of State Policy and Program +b'ectives - !t shall be the policy of the State to underta.e( in cooperation )ith the private sector( a comprehensive and continuing 0rban Development and Housing Program( hereinafter referred to as the Program( )hich shall:
1, 0plift the conditions of the underprivileged and homeless citi5ens in urban areas and in resettlement areas by ma.ing available to them decent housing at affordable cost( basic services( and employment opportunities6 3, Provide for the rational use and development of urban land in order to bring about the follo)ing: o
o
o
o
o
&7uitable utili5ation of residential lands in urban and urbani5able areas )ith particular attention to the needs and re7uirements of the underprivileged and homeless citi5ens not merely on the basis of mar.et forces6 +ptimi5ation of the use and productivity of land and urban resources6 Development of urban areas conducive to commercial and industrial activities )hich can generate more economic opportunities for the people6 Reduction in urban dysfunctions( particularly those that adversely affect public health( safety and ecology6 and "ccess to land and housing by the underprivileged and homeless citi5ens6
8, "dopt )or.able policies to regulate and direct urban gro)th and epansion to)ards a dispersed urban net and more balanced urban*rural interdependence6 9, Provide for an e7uitable land tenure system that shall guarantee security of tenure to Program beneficiaries but shall respect the rights of small property o)ners and ensure the payment of 'ust compensation6 , &ncourage more effective people;s participation in the urban development process6 and
<, !mprove the capability of local government units in underta.ing urban development and housing programs and pro'ects, Secti"# %. Definition of Terms - =or purposes of this "ct:
1, /"ffordable cost4 refers to the most reasonable price of land and shelter based on the needs and financial capability of Program beneficiaries and appropriate financing schemes6 3, /"reas for priority development4 refers to those areas declared as such under eisting statutes and pertinent eecutive issuances6 8, /Blighted lands4 refers to the areas )here the structures are dilapidated( obsolete and unsanitary( tending to depreciate the value of the land and prevent normal development and use of the area, 9, /Consultation4 refers to the constitutionally mandated process )hereby the public( on their o)n or through people;s organi5ations( is provided an opportunity to be heard and to participate in the decision*ma.ing process on matters involving the protection and promotion of its legitimate collective interests( )hich shall include appropriate documentation and feedbac. mechanisms6 , /!dle lands4 refers to non*agricultural lands in urban and urbani5able areas on )hich no improvements( as herein defined( have been made by the o)ner( as certified by the city( municipal( or provincial assessor6 <, /!mprovements4 refers to all types of buildings and residential units( )alls( fences( structures or constructions of all .inds of a fied character or )hich are adhered to the soil but shall not include trees( plants and gro)ing fruits( and other fitures that are mere superimpositions on the land( and the value of improvements shall not be less than fifty percent >?@A of the assessed value of the property6 , /%oint venture4 refers to the commitment or agreement by t)o >3A or more persons to carry out a specific or single business enterprise for their mutual benefit( for )hich purpose they combine their funds( land resources( facilities and services6 , /#and assembly or consolidation4 refers to the ac7uisition of lots varying o)nership through purchase or epropriation for the purpose of planned and rational development and sociali5ed housing programs )ithout individual property boundary restrictions6 2, /#and ban.ing4 refers to the ac7uisition of land at values based on eisting use in advance of actual need to promote planned development and sociali5ed housing programs6 1?, /#and s)apping4 refers to the process of land ac7uisition by echanging land for another price of land e7ual value( or for shares of stoc. in a government or 7uasi*government corporation )hose boo. value is of e7ual value to the land being echanged( for the purpose of planned and rational development and provision for sociali5ed housing )here land values are determined based on land classification( mar.et value and assessed value ta.en from eisting ta declarations: Provided( That more valuable lands o)ned by private persons may be echanged )ith less valuable lands to carry out the ob'ectives of this "ct6
11, /#and use plan4 refers to the rational approach of allocating available land resources as e7uitably as possible among competing user groups and for different functions consistent )ith the development plan of the area and the Program under this "ct6 13, /+n*site development4 refers to the process of upgrading and rehabilitation of blighted and slum urban areas )ith a vie) of minimi5ing displacement of d)ellers in said areas( and )ith provisions for basic services as provided for in Section 31 hereof6 18, /Professional s7uatters4 refers to individuals or groups )ho occupy lands )ithout the epress consent of the lando)ner and )ho have sufficient income for legitimate housing, The term shall also apply to persons )ho have previously been a)arded homelots or housing units by the $overnment but )ho sold( leased or transferred the same to settle illegally in the same place or in another urban area( and non*bona fide occupants and intruders of lands reserved for sociali5ed housing, The term shall not apply to individuals or groups )ho simply rent land and housing from professional s7uatters or s7uatting syndicates6 19, /Resettlement areas4 refers to areas identified by the appropriate national agency or by the local government unit )ith respect to areas )ithin its 'urisdiction( )hich shall be used for the relocation of the underprivileged and homeless citi5ens6 1, /Security of tenure4 refers to the degree of protection afforded to 7ualified Program beneficiaries against infringement or un'ust( unreasonable and arbitrary eviction or disposition( by virtue of the right of o)nership( lease agreement( usufruct and other contractual arrangements6 1<, /Slum !mprovement and Resettlement Program or S!R4 refers to the program of the ational Housing "uthority of upgrading and improving blighted s7uatter areas outside of Metro Manila pursuant to eisting statutes and pertinent eecutive issuances6 1, /Small property o)ners4 refers to those )hose only real property consists of residential lands not eceeding three hundred s7uare meters >8?? s7, mA in other urban areas6 1, /Sociali5ed housing4 refers to housing programs and pro'ects covering houses and lots or homelots only underta.en by the $overnment or the private sector for the underprivileged and homeless citi5ens )hich shall include sites and services development( long*term financing( liberali5ed terms on the interest payments( and such other benefits in accordance )ith the provisions of this "ct6 12, /S7uatting syndicates4 refers to groups of persons engaged in the business of s7uatter housing for profit or gain6 3?, /0nderprivileged and homeless citi5ens4 refers to the beneficiaries of this "ct and to individuals or families residing in urban and urbani5able areas )hose income or combined household income falls )ithin the poverty threshold as defined by the ational &conomic and Development "uthority and )ho do not o)n housing facilities, This shall include those )ho live in ma.eshift d)elling units and do not en'oy security of tenure6
31, /0nregistered or abandoned lands4 refers to lands in urban and urani5able areas )hich are not registered )ith the Register of Deeds( or )ith the city or municipal assessor;s office concerned( or )hich are uninhabited by the o)ner and have not been developed or devoted for any useful purpose( or appears unutili5ed for a period of three >8A consecutive years immediately prior to the issuance and receipt or publication of notice of ac7uisition by the $overnment as provided under this "ct, !t does not include land )hich has been abandoned by reason of force ma'eure or any other fortuitous event: Provided( That prior to such event( such land )as previously used for some useful or economic purpose6 33, /0rban areas4 refers to all cities regardless of their population density and to municipalities )ith a population density of at least five hundred >??A persons per s7uare .ilometers6 38, /0rbani5able areas4 refers to sites and lands )hich( considering present characteristics and prevailing conditions( display mar.ed and great potential of becoming urban areas )ithin the period of five >A years6 and 39, /Eonal !mprovement Program or E!P4 refers to the program of the ational Housing "uthority of upgrading and improving blighted s7uatter areas )ithin the cities and municipalities of Metro Manila pursuant to eisting statutes and pertinent eecutive issuances, Article II COVERAGE AND E&EMPTIONS Secti"# '. Coverage - The Program shall cover all lands in urban and urbani5able areas( including eisting areas for priority development( 5onal improvement sites( slum improvement and resettlement sites( and in other areas that may be identified by the local government units as suitable for sociali5ed housing, Secti"# (. &emptions - The follo)ing lands shall be eempt from the coverage of this "ct:
1, Those included in the coverage of Republic "ct o, <<( other)ise .no)n as the Comprehensive "grarian Reform #a)6 3, Those actually used for national defense and security of the State6 8, Those used( reserved or other)ise set aside for government offices( facilities and other installations( )hether o)ned by the ational $overnment( its agencies and instrumentalities( including government*o)ned or controlled corporations( or by the local government units: Provided( ho)ever( That the lands herein mentioned( or portions thereof( )hich have not been used for the purpose for )hich they have been reserved or set aside for the past ten >1?A years from the effectivity of this "ct( shall be covered by this "ct6 9, Those used or set aside for par.s( reserves for flora and fauna( forests and )atersheds( and other areas necessary to maintain ecological balance or environmental protection( as determined and certified to by the proper government agency6 and , Those actually and primarily used for religious( charitable( or educational purposes( cultural and historical sites( hospital and health centers( and cemeteries or memorial par.s,The eemptions herein provided shall not apply )hen the use or purpose of the abovementioned lands has ceased to eist,
Article III NATIONAL URBAN DEVELOPMENT AND HOUSING RAME)OR* Secti"# +. =rame)or. for Rational Development - There shall be a ational 0rban Development and Housing =rame)or. to be formulated by the Housing and #and 0se Regulatory Board under the direction of the Housing and 0rban Development Coordinating Council in coordination )ith all local government units and other concerned public and private sectors )ithin one >1A year from the effectivity of this "ct:
The =rame)or. shall refer to the comprehensive plan for urban and urbani5able areas aimed at achieving the ob'ectives of the Program, !n the formulation of the =rame)or.( a revie) and rationali5ation of eisting to)n and land use plans( housing programs( and all other pro'ects and activities of government agencies and the private sector )hich may substantially affect urban land use patterns( transportation and public utilities( infrastructure( environment and population movements shall be underta.en )ith the concurrence of the local government units concerned, Article IV LAND USE, INVENTOR!, ACUISTION AND DISPOSITION Secti"# 7. !nventory of #ands - Fithin one >1A year from the effectivity of this "ct( all city and municipal governments shall conduct an inventory of all lands improvements thereon )ithin their respective localities, The inventory shall include the follo)ing:
1, Residential lands6 3, $overnment*o)ned lands( )hether o)ned by the ational $overnment or any of its subdivisions( instrumentalities( or agencies( including government*o)ned or controlled corporations and their subsidiaries6 8, 0nregistered or abandoned and idle lands6 and 9, +ther lands,!n conducting the inventory( the local government units concerned( in coordination )ith the Housing and #and 0se Regulatory Board and )ith the assistance of the appropriate government agencies( shall indicate the type of land use and the degree of land utili5ation( and other date or information necessary to carry out the purposes of this "ct,=or planning purposes( the Housing and 0rban Development Coordinating Council shall be furnished by each local government unit a copy of its inventory )hich shall be updated every three >8A years, Secti"# -. !dentification of Sites for Sociali5ed Housing - "fter the inventory( the local government units( in coordination )ith the ational Housing "uthority( the Housing and #and 0se Regulatory Board( the ational Mapping Resource !nformation "uthority( and the #and Management Bureau( shall identify lands for sociali5ed housing and resettlement areas for the immediate and future needs of the underprivileged and homeless in the urban areas( ta.ing into consideration the degree of availability of basic services and facilities( their accessibility and proimity to 'ob sites and other economic opportunities and the actual number of registered beneficiaries,
$overnment*o)ned lands under paragraph >bA of the preceding section )hich have not been used for the purpose for )hich they have been reserved or set aside for the past ten >1?A years from the effectivity of this "ct and identified as suitable for sociali5ed housing( shall immediately be transferred to the ational Housing "uthority sub'ect to the approval of the President of the Philippines or by the local government unit concerned( as the case may be( for proper disposition in accordance )ith this "ct, Secti"# 9. Priorities in the "c7uisition of #and - #ands for sociali5ed housing shall be ac7uired in the follo)ing order:
1, Those o)ned by the $overnment or any of its subdivisions( instrumentalities( or agencies( including government*o)ned or controlled corporations and their subsidiaries6 3, "lienable lands of the public domain6 8, 0nregistered or abandoned and idle lands6 9, Those )ithin the declared "reas for Priority Development( Eonal !mprovement Program sites )hich have not yet been ac7uired6 , Bagong #ipunan !mprovement of Sites and Services or B#!SS sites )hich have not yet been ac7uired6 and <, Privately o)ned lands,Fhere on*site development is found more practicable and advantageous to the beneficiaries( the priorities mentioned in this section shall not apply, The local government units shall give budgetary priority to on*site development of government lands, Secti"# $. Modes of #and*"c7uisition - The modes of ac7uiring lands for purposes of this "ct shall include( among others( community mortgage( land s)apping( land assembly or consolidation( land ban.ing( donation to the $overnment( 'oint*venture agreement( negotiated purchase( and epropriation: Provided( ho)ever( That epropriation shall be resorted to only )hen other modes of ac7uisition have been ehausted: Provided( further( That )here epropriation is resorted to( parcels of land o)ned by small property o)ners shall be eempted for purposes of this "ct: Provided( finally( That abandoned property( as herein defined( shall be reverted and escheated to the State in a proceeding analogous to the procedure laid do)n in Rule 21 of the Rules of Court,
=or the purpose of sociali5ed housing( government*o)ned and foreclosed properties shall be ac7uired by the local government units( or by the ational Housing "uthority primarily through negotiated purchase: Provided( That 7ualified beneficiaries )ho are actual occupants of the land shall be given the right of first refusal, Secti"# $$. &propriation of !dle #ands - "ll idle lands in urban and urbani5able areas( as defined and identified in accordance )ith this "ct( shall be epropriated and shall form part of the public domain, These lands shall be disposed of or utili5ed by the $overnment for such purposes that conform )ith their land use plans, &propriation proceedings shall be instituted if( after the lapse of one >1A year follo)ing receipt of notice of ac7uisition( the o)ner fails to introduce improvements as defined in Section 8>fA hereof( ecept in the case of this provision( ho)ever( are residential lands o)ned by small property o)ners or those the o)nership of )hich is sub'ect of a pending litigation, Secti"# $2. Disposition of #ands for Sociali5ed Housing - The ational Housing "uthority( )ith respect to lands belonging to the ational $overnment( and the local government units )ith respect to other lands )ithin their respective localities( shall coordinate )ith each other to formulate and ma.e available various alternative schemes for the disposition of lands to the beneficiaries of the Program, These schemes shall not be limited to those involving transfer of o)nership in fee simple but shall include lease( )ith option to purchase( usufruct or such other variations as the local government units or the ational Housing "uthority may deem most epedient in carrying out the purposed of this "ct,
C onsistent )ith this provision( a scheme for public rental housing may be adopted,
Secti"# $%. Galuation of #ands for Sociali5ed Housing - &7uitable land valuation guidelines for sociali5ed housing shall be set by the Department of =inance on the basis of the mar.et value reflected in the 5onal valuation( or in its absence( on the latest real property ta declaration,
=or sites already occupied by 7ualified Program beneficiaries( the Department of =inance shall factor into the valuation the blighted status of the land as certified by the local government unit or the ational Housing "uthority, Secti"# $'. #imitations on the Disposition of #ands for Sociali5ed Housing - o land for sociali5ed housing( including improvements or rights thereon( shall be sold( alienated( conveyed( encumbered or leased by any beneficiary of this Program ecept to 7ualified Program beneficiaries as determined by the government agency concerned, Should the beneficiary unla)fully sell( transfer( or other)ise dispose of his lot or any right thereon( the transaction shall be null and void, He shall also lose his right to the land( forfeit the total amorti5ation paid thereon( and shall be barred from the benefits under this "ct for a period of ten >1?A years from the date of violation, !n the event the beneficiary dies before full o)nership of the land is vested on him( transfer to his heirs shall ta.e place only upon their assumption of his outstanding obligations, !n case of failure by the heirs to assume such obligations( the land shall revert to the $overnment for disposition in accordance )ith this "ct, Article V SOCIALI/ED HOUSING Secti"# $(. Policy - Sociali5ed housing( as defined in Section 8 hereof( shall be the primary strategy in providing shelter for the underprivileged and homeless, Ho)ever( if the tenurial arrangement in a particular sociali5ed housing program is in the nature of leasehold or usufruct( the same shall be transitory and the beneficiaries must be encouraged to become independent from the Program )ithin a given period of time( to be determined by the implementing agency concerned, Secti"# $+. &ligibility Criteria for Sociali5ed Housing Program Beneficiaries - To 7ualify for the sociali5ed housing program( a beneficiary:
1, Must be a =ilipino citi5en6 3, Must be an underprivileged and homeless citi5en( as defined in Section 8 of this "ct6 8, Must not o)n any real property )hether in the urban or rural areas6 and 9, Must not be a professional s7uatter or a member of s7uatting syndicates, Secti"# $7. Registration of Sociali5ed Housing Beneficiaries - The Housing and 0rban Development Coordinating Council( in coordination )ith the local government units( shall design a system for the registration of 7ualified Program beneficiaries in accordance )ith the =rame)or., The local government units( )ithin one >1A year from the effectivity to this "ct( shall identify and register all beneficiaries )ithin their respective localities, Secti"# $-. Balanced Housing Development - The Program shall include a system to be specified in the =rame)or. plan )hereby developers of proposed subdivision pro'ects shall be re7uired to develop an area for sociali5ed housing e7uivalent to at least t)enty percent >3?@A of the total subdivision area or total subdivision pro'ect cost( at the option of the developer( )ithin the same city or municipality( )henever feasible( and in accordance )ith the standards set by the Housing and #and 0se Regulatory Board and other eisting la)s, The balanced
housing development as herein re7uired may also be complied )ith by the developers concerned in any of the follo)ing manner: 1, Development of ne) settlement6 3, Slum upgrading or rene)al of areas for priority development either through 5onal improvement programs or slum improvement and resettlement programs 8, %oint*venture pro'ects )ith either the local government units or any of the housing agencies6 or 9, Participation in the community mortgage program, Secti"# $9. !ncentive for the ational Housing "uthority - The ational Housing "uthority( being the primary government agency in charge of providing housing for the underprivileged and homeless( shall be eempted from the payment of all fees and charges of any .ind( )hether local or national( such as income and real taes, "ll documents or contracts eecuted by and in favor of the ational Housing "uthority shall also be eempt from the payment of documentary stamp ta and registration fees( including fees re7uired for the issuance of transfer certificates of titles, Secti"# 2. !ncentives for Private Sector Participating in Sociali5ed Housing - To encourage greater private sector participation in sociali5ed housing and further reduce the cost of housing units for the benefit of the underprivileged and homeless( the follo)ing incentives shall be etended to the private sector:
1, Reduction and simplification of 7ualification and accreditation re7uirements for participating private developers6 3, Creation of one*stop offices in the different regions of the country for the processing( approval and issuance of clearances( permits and licenses: Provided( That clearances( permits and licenses shall be issued )ithin ninety >2?A days from the date of submission of all re7uirements by the participating private developers6 8, Simplification of financing procedures6 and 9, &emption from the payment of the follo)ing: o
Pro'ect*related income taes6
o
Capital gains ta on ra) lands used for the pro'ect6
o
Galue*added ta for the pro'ect contractor concerned6
o
Transfer ta for both ra) and completed pro'ects6 and
o
Donor;s ta for lands certified by the local government units to have been donated for sociali5ed housing purposes,
Provided( That upon application for eemption( a lien on the title of the land shall be annotated by the Register of Deeds: Provided( further( That the sociali5ed housing development plan has already been approved by the appropriate government agencies concerned: Provided( finally( That all the savings ac7uired by virtue of this provision shall accrue in favor of the beneficiaries sub'ect to the implementing guidelines to be
issued by the Housing and 0rban Development Coordinating Council, "ppropriate implementing guidelines shall be prepared by the Department of =inance( in consultation )ith the Housing and 0rban Development Coordinating Council( for the proper implementation of the ta eemption mentioned in this section )ithin one >1A year after the approval( of the "ct, Property o)ners )ho voluntarily provide resettlement sites to illegal occupants of their lands shall be entitled to a ta credit e7uivalent to the actual non*recoverable epenses incurred in the resettlement( sub'ect to the implementing guidelines 'ointly issued by the Housing and 0rban Development Coordinating Council and the Department of =inance, Secti"# 2$. Basic Services - Sociali5ed housing or resettlement areas shall be provided by the local government unit or the ational Housing "uthority in cooperation )ith the private developers and concerned agencies )ith the follo)ing basic services and facilities:
1, Potable )ater6 3, Po)er and electricity and an ade7uate po)er distribution system6 8, Se)erage facilities and an efficient and ade7uate solid )aste disposal system6 and 9, "ccess to primary roads and transportation facilities The provision of other basic services and facilities such as health( education( communications( security( recreation( relief and )elfare shall be planned and shall be given priority for implementation by the local government unit and concerned agencies in cooperation )ith the private sector and the beneficiaries themselves, The local government unit( in coordination )ith the concerned national agencies( shall ensure that these basic services are provided at the most cost*efficient rates( and shall set a mechanism to coordinate operationally the thrusts( ob'ectives and activities of other government agencies concerned )ith providing basic services to housing pro'ects, Secti"# 22. #ivelihood Component - To the etent feasible( sociali5e8d housing and resettlement pro'ects shall be located near areas )here employment opportunities are accessible, The government agencies dealing )ith the development of livelihood programs and grant of livelihood loans shall give priority to the beneficiaries of the Program, Secti"# 2%. Participation of Beneficiaries - The local government units( in coordination )ith the Presidential Commission for the 0rban Poor and concerned government agencies( shall afford Program beneficiaries or their duly designated representatives an opportunity to be heard and to participate in the decision*ma.ing process over matters involving the protection and promotion of their legitimate collective interests )hich shall include appropriate documentation and feedbac. mechanisms, They shall also be encouraged to organi5e themselves and underta.e self*help cooperative housing and other livelihood activities, They shall assist the $overnment in preventing the incursions of professional s7uatters and members of s7uatting syndicates into their communities,
!n instances )hen the affected beneficiaries have failed to organi5e themselves or form an alliance )ithin a reasonable period prior to the implementation of the program or pro'ects affecting them( consultation bet)een the implementing agency and the
affected beneficiaries shall be conducted )ith the assistance of the Presidential Commission for the 0rban Poor and the concerned non*government organi5ation, Secti"# 2'. Consultation )ith Private Sector - +pportunities for ade7uate consultation shall be accorded to the private sector involved in sociali5ed housing pro'ect pursuant to this "ct, Article VI AREAS FOR PRIORIT! DEVELOPMENT, /ONAL IMPROVEMENT PROGRAM SITES AND SLUM IMPROVEMENT AND RESETTLEMENT PROGRAM SITES Secti"# 2(. Benefits - !n addition to the benefits provided under eisting la)s and other related issuances to occupants of areas for priority development( 5onal improvement program sites and slum improvement and resettlement program sits( such occupants shall be entitled to priority in all government pro'ects initiated pursuant to this "ct, They shall also be entitled to the follo)ing support services:
1, #and surveys and titling at minimal cost6 3, #iberali5ed terms on credit facilities and housing loans and one hundred percent >1??@A deduction from every homebuyer;s gross income ta of all interest payments made on documented loans incurred for the construction or purchase of the homebuyer;s house6 8, &emption from the payment of documentary stamp ta( registration fees( and other fees for the issuance of transfer certificate of titles6 9, Basic services as provided for in Section 31 of this "ct6 and , Such other benefits that may arise from the implementation of this "ct, Article VII URBAN RENE)AL AND RESETTLEMENT Secti"# 2+. 0rban Rene)al and Resettlement - This shall include the rehabilitation and development of blighted and slum areas and the resettlement of Program beneficiaries in accordance )ith the provisions of this "ct, +n*site development shall be implemented )henever possible in order to ensure minimum movement of occupants of blighted lands and slum areas, The resettlement of the beneficiaries of the Program from their eisting places of occupancy shall be underta.en only )hen on*site development is not feasible and after compliance )ith the procedures laid do)n in Section 3 of this "ct, Secti"# 27. "ction "gainst Professional S7uatters and S7uatting Syndicates - The local government units( in cooperation )ith the Philippine ational Police( the Presidential Commission for the 0rban Poor >PC0PA( and the PC0P accredited urban poor organi5ation in the area( shall adopt measures to identify and effectively curtail the nefarious and illegal activities of professional s7uatters and s7uatting syndicates( as herein defined,
"ny person or group identified as such shall be summarily evicted and their d)ellings or structures demolished6 and shall be dis7ualified to avail of the benefits of the Program, " public official )ho tolerates or abets the commission of the abovementioned acts shall be dealt )ith in accordance )ith eisting la)s, =or purposes of this "ct( professional s7uatters or members of s7uatting syndicates shall be imposed the penalty of si >
P(???A but not more than +ne hundred thousand pesos >P1??(???A( or both( at the discretion of the court,
Secti"# 2-. &viction and Demolition - &viction or demolition as a practice shall be discouraged, &viction or demolition( ho)ever( may be allo)ed under the follo)ing situations:
1, Fhen persons or entities occupy danger areas such as esteros( railroad trac.s( garbage dumps( riverban.s( shorelines( under)ays( and other public places such as side)al.s( roads( par.s( and playgrounds6 3, Fhen government infrastructure pro'ects )ith available funding are about to be implemented6 or 8, Fhen there is a court order for eviction and demolition, !n the eecution of eviction or demolition orders involving underprivileged and homeless citi5ens( the follo)ing shall be mandatory: 1, otice upon the affected persons or entities at least thirty >8?A days prior to the date of eviction or demolition6 3, "de7uate consultations on the matter of resettlement )ith the duly designated representatives of the families to be resettled and the affected communities in the areas )here they are to be relocated6 8, Presence of local government officials or their representatives during eviction or demolition6 9, Proper identification of all persons ta.ing part in the demolition6 , &ecution of eviction or demolition only during regular office hours from Mondays to =ridays and during good )eather( unless the affected families consent other)ise6 <, o use of heavy e7uipment for demolition ecept for structures that are permanent and of concrete materials6 , Proper uniforms for members of the Philippine ational Police )ho shall occupy the first line of la) enforcement and observe proper disturbance control procedures6 and , "de7uate relocation( )hether temporary or permanent: Provided( ho)ever( That in cases of eviction and demolition pursuant to a court order involving underprivileged and homeless citi5ens( relocation shall be underta.en by the local government unit concerned and the ational Housing "uthority )ith the assistance of other government agencies )ithin forty*five >9A days from service of notice of final 'udgment by the court( after )hich period the said order shall be eecuted: Provided( further( That should relocation not be possible )ithin the said period( financial assistance in the amount e7uivalent to the prevailing minimum daily )age multiplied by sity >
Secti"# 29. Resettlement - Fithin t)o >3A years from the effectivity of this "ct( the local government units( in coordination )ith the ational Housing "uthority( shall implement the relocation and resettlement of persons living in danger areas such as esteros( railroad trac.s( garbage dumps( riverban.s( shorelines( )ater)ays( and in other public places such as side)al.s( roads( par.( and playgrounds, The local government unit( in coordination )ith the ational Housing "uthority( shall provide relocation or resettlement sites )ith basic services and facilities and access to employment and livelihood opportunities sufficient to meet the basic needs of the affected families, Secti"# %. Prohibition "gainst e) !llegal Structures - !t shall be unla)ful for any person to construct any structure in areas mentioned in the preceding section,
"fter the effectivity of this "ct( the barangay( municipal or city government units shall prevent the construction of any .ind of illegal d)elling units or structures )ithin their respective localities, The head of any local government unit concerned )ho allo)s( abets or other)ise tolerates the construction of any structure in violation of this section shall be liable to administrative sanctions under eisting la)s and to penal sanctions provided for in this "ct, Article VIII COMMUNIT! MORTGAGE PROGRAM Secti"# %$. Definition - The Community Mortgage Program >CMPA is a mortgage* financing program of the ational Home Mortgage =inance Corporation )hich assists legally organi5ed associations of underprivileged and homeless citi5ens to purchase and develop a tract of land under the concept of community o)nership, The primary ob'ective of the program is to assist residents of blighted or depressed areas to o)n the lots they occupy( or )here they choose to relocate to( and eventually improve their neighborhood and homes to the etent of their affordability, Secti"# %2. !ncentives - To encourage its )ider implementation( participants in the CMP shall be granted )ith the follo)ing privileges or incentives:
1, $overnment*o)ned or controlled corporations and local government units( may dispose of their idle lands suitable for sociali5ed housing under the CMP through negotiated sale at prices based on ac7uisition cost plus financial carrying costs6 3, Properties sold under the CMP shall be eempted from the capital gains ta6 and 8, Beneficiaries under the CMP shall not be evicted nor dispossessed of their lands or improvements unless they have incurred arrearages in payments of amorti5ations for three >8A months, Secti"# %%. +rgani5ation of Beneficiaries - Beneficiaries of the Program shall be responsible for their organi5ation into associations to manage their subdivisions or places of residence( to secure housing loans under eisting Community Mortgage Program and such other pro'ects beneficial to them, Sub'ect to such rules and regulations to be promulgated by the ational Home Mortgage =inance Corporation( associations organi5ed pursuant to this "ct may collectively ac7uire and o)n lands covered by this Program, Fhere the beneficiaries fail to form an association by and among themselves( the ational Home mortgage =inance Corporation shall initiate the organi5ation of the same in coordination )ith the Presidential Commission for the 0rban Poor and the local government units concerned, o person )ho is not a bona fide resident of the area shall be a member or officer of such association, Article I& RELATED STRATEGIES
Secti"# %'. Promotion of !ndigenous Housing Materials and Technologies - The local government units( in cooperation )ith the ational Housing "uthority( Technology and #ivelihood Resource Center( and other concerned agencies( shall promote the production and use of indigenous( alternative( and lo)*cost construction materials and technologies for sociali5ed housing, Secti"# %(. Transport System - The local government units( in coordination )ith the Departments of Transportation and Communications( Budget and Ma nagement( Trade and !ndustry( =inance( Public For.s and High)ays( the Home !nsurance $uaranty Corporation( and other concerned government agencies( shall devise a set of mechanisms including incentives to the private sector so that a viable transport system shall evolve and develop in the urban areas, !t shall also formulate standards designed to attain these ob'ectives:
1, Smooth flo) of traffic6 3, Safety and convenience of travel6 8, Minimum damage to the physical environment6 and 9, "de7uate and efficient transport service to the people and goods at minimum cost, Secti"# %+. &cological Balance - The local government units shall coordinate )ith the Department of &nvironment and atural Resources in ta.ing measures that )ill plan and regulate urban activities for the conservation and protection of vital( uni7ue and sensitive ecosystems( scenic landscapes( cultural sites and other similar resource areas,
To ma.e the implementation of this function more effective( the active participation of the citi5enry in environmental rehabilitation and in decision*ma.ing process shall be promoted and encouraged, The local government units shall recommend to the &nvironmental and Management Bureau the immediate closure of factories( mines and transport companies )hich are found to be causing massive pollution, Secti"# %7. Population Movements - The local government units shall set up an effective mechanism( together )ith the appropriate agencies li.e the Population Commission( the ational &conomic and Development "uthority and the ational Statistics +ffice( to monitor trends in the movements of population from rural to urban( urban to urban( and urban to rural areas, They shall identify measures by )hich such movements can be influenced to achieve balance bet)een urban capabilities and population( to direct appropriate segments of the population into areas )here they can have access to opportunities to improve their lives and to contribute to national gro)th and recommend proposed legislation to Congress( if necessary,
The Population Commission( the ational &conomic and Development "uthority( and the ational Statistics +ffice shall li.e)ise provide advanced planning information to national and local government planners on population pro'ections and the conse7uent level of services needed in particular urban and urbani5able areas, This service )ill include early*)arning systems on epected dysfunctions in a particular urban area due to population increases( decreases( or age structure changes, Secti"# %-. 0rban*rural !nterdependence - To minimi5e rural to urban migration and pursue urban decentrali5ation( the local government units shall coordinate )ith the ational &conomic and Development "uthority and other government agencies in the
formulation of national development programs that )ill stimulate economic gro)th and promote socioeconomic development in the countryside, Article & PROGRAM IMPLEMENTATION Secti"# %9. Role of #ocal $overnment 0nits - The local government units shall be charged )ith the implementation of this "ct in their respective localities( in coordination )ith the Housing and 0rban Development Coordinating Council( the national housing agencies( the Presidential Commission for the 0rban Poor( the private sector and other non*government organi5ations,
They shall prepare a comprehensive land use plan for their respective localities in accordance )ith the provisions of this "ct, Secti"# '. Role of $overnment Housing "gencies - !n addition to their respective eisting po)ers and functions( and those provided for in this "ct( the hereunder* mentioned housing agencies shall perform the follo)ing:
1, The Housing and 0rban Development Coordinating Council shall( through the .ey housing agencies( provide local government units )ith necessary support such as: o
o
o
=ormulation of standards and guidelines as )ell as providing technical support in the preparation of to)n and land use plans6 !n coordination )ith the ational &conomic and Development "uthority and the ational Statistics +ffice( provide data and information for for)ard* planning by the local government units in their areas( particularly on pro'ections as to the population and development trends in their localities and the corresponding investment programs needed to provide appropriate types and levels of infrastructure( utilities( services and land use patterns6 and "ssistance in obtaining funds and other resources needed in the urban development and housing programs in their areas of responsibility,
3, The ational Housing "uthority( upon re7uest of local government units( shall provide technical and other forms of assistance in the implementation of their respective urban development and housing programs )ith the ob'ective of augmenting and enhancing local government capabilities in the provision of housing benefits to their constituents6 8, The ational Home Mortgage =inance Corporation shall administer the Community Mortgage Program under this "ct and promulgate rules and regulations necessary to carry out the provisions of this "ct6 and 9, The Home !nsurance $uaranty Corporation shall design an appropriate guarantee scheme to encourage financial institutions to go into direct lending for housing, Secti"# '$. "nnual Report - The Housing and 0rban Development Coordinating Council and the local government units shall submit a detailed annual report )ith respect to the implementation of this "ct to the President and the Congress of the Republic of the Philippines, Article &I FUNDING
Secti"# '2. =unding - =unds for the urban development and housing program shall come from the follo)ing sources:
1, " minimum of fifty percent >?@A from the annual net income of the Public &states "uthority( to be used by the ational Housing "uthority to carry outs its programs of land ac7uisition for resettlement purposes under this "ct6 3, Proceeds from the disposition of ill*gotten )ealth( not other)ise previously set aside for any other purpose( shall be applied to the implementation of this "ct and shall be administered by the ational Home Mortgage =inance Corporation6 8, #oans( grants( be7uests and donations( )hether from local or foreign sources6 9, =lotation of bonds( sub'ect to the guidelines to be set by the Monetary Board6 , Proceeds from the social housing ta and( sub'ect to the concurrence of the local government units concerned( idle lands ta( as provided in Section 38< of the #ocal $overnment Code of 1221 and other eisting la)s6 <, Proceeds from the sale or disposition of alienable public lands in urban areas6 and , Domestic and foreign investment or financing through appropriate arrangements li.e the build*operate*and*transfer scheme, Secti"# '%. Sociali5ed Housing Ta - Consistent )ith the constitutional principle that the o)nership and en'oyment of property bear a social function and to raise funds for the Program( all local government units are hereby authori5ed to impose an additional one*half percent >?,@A ta on the assessed value of all lands in urban areas in ecess of =ifty thousand pesos >P?(???A, Article &II TRANSITOR! PROVISIONS Secti"# ''. Moratorium on &viction and Demolition - There shall be a moratorium on the eviction of all program beneficiaries on the demolition of their houses or d)elling units for a period of three >8A years from the effectivity of this "ct: Provided( That the moratorium shall not apply to those persons )ho have constructed their structures after the effectivity of this "ct and cases enumerated in Section 3 hereof, Article &III COMMON PROVISIONS Secti"# '(. Penalty Clause - "ny person )ho violates any provision of this "ct shall be imposed the penalty of not more than si >P(???A but not more than +ne hundred thousand pesos >P1??(???A( or both( at the discretion of the court: Provided( That( if the offender is a corporation( partnership( association or other 'uridical entity( the penalty shall be imposed on the officer or officers of said corporation( partnership( association or other 'uridical entity )ho caused the violation, Secti"# '+. "ppropriations - The amount necessary to carry out the purposes of this "ct shall be included in the annual budget of implementing agencies in the $eneral "ppropriation "ct of the year follo)ing its enactment into la) and every year thereafter, Secti"# '7. Separability Clause - !f for any reason( any provision of this "ct is declared invalid or unconstitutional( the remaining provisions not affected thereby shall continue to be in full force and effect,
Secti"# '-. Repealing Clause - "ll la)s( decrees( eecution orders( proclamations( rules and regulations( and other issuances( or parts thereof )hich are inconsistent )ith the provisions of this "ct( are hereby repealed or modified accordingly, Secti"# '9. &ffectivity Clause - This "ct shall ta.e effect upon its publication in at least t)o >3A national ne)spapers of general circulation, A00r"1e, M3rc4 2', $992.