For good acoustics, the sangguniang panlunsod ng Baguio recently passed an ordinance declaring a “rental holiday ordinance, to heal as one.” In sum, it says “renters in non-operating commercial establishments/spaces in the city during the enhanced and general community quarantine and in other similar situations are granted a rental holiday.”
The intention may be noble, but unfortunately it is unconstitutional. Hopefully it will be vetoed into oblivion by the mayor or if not, nullified by a court of law.
For one, it deprives lessors or owners of properties of due process as nowhere does it say that the same was passed in consultation with the concerned sector.
Second, the so-called “police power” of the State cannot be delegated to the local legislative body or what Political Law professors call undue delegation of powers.
Third, rental income may be classified as property; hence, government cannot deprive persons of their property rights under the equal protection clause without just compensation. Nowhere in the ordinance does it say that the city will cover the losses of lessors nor give tax incentives for their sacrifice.
Fourth, the local government unit, while it may have control over city-owned properties, which collect rentals such as from stall lessees at the city market and concessionaires at Burnham Park and Botanical Garden and may rightfully waive rentals during the pandemic, cannot dictate a holiday rental for nationally-owned properties like Camp John Hay or Maharlika Center as they do not have jurisdiction to do the same.
Thus, fifth, with more reason, they cannot infringe on private or commercial properties or impair the obligations and contracts between the owner and the lessee.
Notice that not even Republic Act 11469 or the Bayahihan to Heal as One Law dared to impose a holiday on rentals. President Rodrigo Duterte himself did not do it as he knows that all it can legally muster is a “moratorium” in the collection of rentals.
Also, Department of Trade and Industry Memorandum Circular 20-12, s. 2020 speaks of suspension of payment and not free rentals during the Covid-19 period. Thus, unless rentals are waived by the owners of the leased premises-national government owned or commercial and private, a lessee must still pay the required rentals after May 6, of course without penalties, interest or charges.
This much is admitted by the local law when it stated “the ordinance enjoins businesses allowed to operate during the ECQ and GCQ or under other similar situations, either at full or partial capacity, to provide relief to renters either by waiving, reducing, or reprieving/postponing the lease rentals.”
In all, it would be good for the august body, especially the lawyer-members, to take a second look and review their work, otherwise instead of healing, it would injure a sector of taxpayers contributing to the now fallen economy of the city. The means will never justify the end.
Sigh!
April 24, 2024
