DTI issues MC 20-29 and MC 20-31 supplementing the guidelines on the 30-day grace period to pay residential and commercial rents of MSMEs
Client Alert – 19 June 2020
Department of Trade and Industry ("DTI") issued last June 2, 2020 its Memorandum Circular No. 20-29 (“MC 20-29”) as amended by Memorandum Circular No. 20-31.
MC 20-29 supplements the guidelines on the concession of residential and commercial rents earlier provided in Memorandum Circular No. 20-12.
MC 20-29 covers all residential and commercial rents of micro, small and medium enterprises (“MSMEs”) that have been affected by the community quarantine (which can be ECQ, MECQ and GCQ).
MC 20-29 provides the following rules for applying the minimum 30-day grace period for paying rent:
MC 20-29 prohibits any eviction from March 17, 2020 until the end of the grace period granted to a lessee for failure to pay the residential and commercial rent due.
Any violation of MC 20-29 may be filed with the DTI for investigation and may result in an administrative and criminal complaint against the offender.
Lessors who are affected by the MC 20-29 should grant the mandatory grace period to their lessees in order to avoid the penalties for non-compliance, which include possible imprisonment.
Lessors should note however that the grace period applies only to rent during the community quarantine and for a limited time after. Further, the grace period does not apply during MGCQ.
On the other hand, lessees can invoke the mandatory grace period to give themselves economic respite from the community quarantine.
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The Legal Tree team
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