The Philippines has laws that protect installment buyers of property. If the buyer's default is due to the failure of development by the seller/developer, the governing law is P.D 957 or the “Subdivision and Condominium Buyer’s Protective Decree” wherein the buyer shall be refunded of the total amount paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate. If the default is due to some other reasons other than failure of development, the governing law is Republic Act 6552, or the Maceda Law. Also known as the “Realty Installment Buyer Act” , Maceda Law applies only to residential properties under contract to sell, but excludes sale with mortgage, sale of industrial lots, commercial buildings and sale to tenants under R.A 3844. This law was authored by Ernesto M. Maceda, the 18th Senate President of the Philippines, and approved on August 26, 1972. This was the only bill signed into law before the proclamation of Martial Law.
There are 2 scenarios under the Maceda Law:
1. If the buyer has already paid at least 2 years of installment, his rights under Maceda law are as follows:
a. To pay without any additional interest any installment due with a grace period of thirty 30 days for every year of installment payment, to be exercised once every five (5) years
b. A 30-day notarial notice of cancellation before his contract may be cancelled
c. A refund equivalent to 50% of the total payments made and after the fifth year, 5% interest per annum, but the refund shall in no case exceed 90% of the total payments made.
2. If less than two years of installments have been paid, his rights are as follows:
a. Grace period of not less than 60 days from due date to pay the amount due
b. Not entitled to refund but must receive a 30-day notice before final cancellation
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