All Unpaid Rent during ECQ, MECQ, and GCQ can be paid in 6 Months says DTI
Department of Trade and Industry (DTI) Secretary Ramon Lopez clarified on Sunday, June 7, 2020, that the policy for the payment of residential and commercial rents remains the same.
He said that the 30-day grace period still has not changed for both residential and commercial rents and that this will still apply to Micro, Small, and Medium Enterprises (MSMEs) not allowed to operate during the Enhanced Community Quarantine (ECQ).
“As we slowly transition to the new normal, we need to ensure the survival of businesses during these difficult times and in the months beyond the lifting of the quarantine,” DTI Sec. Lopez said.
Clarification of Some Provisions
Furthermore, based on the guidelines under DTI Memorandum Circular No. 20-31, Series of 2020 issued last June 4, 2020, the grace period on rents is covered under the ECQ, Modified ECQ (MECQ), and General Community Quarantine (GCQ).
Payment Option for Tenants/Lessees
The same memorandum stated that tenants/lessees may choose to pay all unpaid rents (during ECQ, MECQ, and GCQ) in installment equally amortized in six (6) months following the end of the 30-day minimum grace period without incurring interests, penalties, fees, and other charges.
Guidelines for Residential and Commercial Rents
On the other hand, in clarification of certain provisions in the earlier released supplemental guidelines of MC 20-12, here are the guidelines for the payment of residential and commercial rents:
- The minimum thirty (30)-day grace period to be granted for residential rent shall start from the last due date or from the lifting of the ECQ, MECQ, and GCQ, whichever is longer.
- For commercial rents falling due upon MSMEs and sectors not permitted to operate during the ECQ, MECQ, and GCQ, the minimum thirty (30)-day grace period shall also start from the last due date or from the lifting of the ECQ, MECQ, and GCQ whichever is longer.
“These guidelines will help our countrymen in the wake of the restrictions imposed during the Community Quarantines (CQ) that have severely affected businesses, especially MSMEs,” said Lopez.
Appeal to Lessors
Since a lot of businesses have been greatly affected by the COVID-19 outbreak, DTI urges lessors to adopt any of the following in the spirit of goodwill, generosity, and fair play:
- Totally or partially waive the commercial rents that are falling due during the ECQ, MECQ, and GCQ
- Grant reprieve or a reduction in the amount of rent due in the months following the ECQ, MECQ, and GCQ
- Open for renegotiation the Lease Term Agreements with the lessees
- Use other recourse to mitigate the impact of the ECQ, MECQ, and GCQ to the MSMEs
The agency also emphasized that during the quarantine period, lessors are not allowed to evict their lessees/tenants due to the failure to pay for residential or commercial rent.
However, as stated in the amended guidelines, lessors are not obliged to refund residential and commercial rents paid by the lessees before or during the period of the community quarantine.
Is it also applicable to own to rent basis?