Vous êtes sur la page 1sur 7

Defaulting Payments Know Your Rights under

Republic Act 6552 (Maceda Law)


Posted by: Joanne Almaden in Real Estate Laws On:June 18, 2016 Last updated: February 24, 2017

Knowing your rights as purchaser of a real estate property under the


Maceda Law, will mean a huge difference. It can mean losing everything
you have put in for your investment, or getting at least 50% of it back,
when for some reason on your part, you cannot continue with your
installment purchase. So in this post, we will discuss the most important
points in the Maceda Law that are relevant to a distressed real estate
buyer.

WHAT IS THE MACEDA LAW?

The Maceda Law, also known as The Realty Installment Buyer


Act or Republic Act 6552 is the law that lays out a defaulting buyers
rights in the Philippines with regards to his purchase of a real estate
property, whether its a condominium unit or a house-and-lot unit in a
subdivision development. This was initiated by lawmaker Ernesto
Maceda and has taken into effect on August 26, 1972.

WHO IT APPLIES TO

Today, more and more people in the working class, especially OFWs
are buying condominiumsor house-and-lots in subdivision projects. But
paying them in full in just one payment is just too much.

So practically, they opt to pay the equity by installment since developers


or contractors installment equity payment schemes have become
increasingly affordable. This is through stretching their equity payment or
down payment stage to 20, 30, 40 months or sometimes even longer.
Then they just take out a loan from their bank for the remaining balance
since banks usually have lower interest rates compared to in-house
financing.
If you have taken advantage of this convenience in acquiring your
property, everything is okay as long as you can keep up with your
payments. But times are not always good. There are times when we face
difficult situations and times when we just cant make the payments
anymore.

If you come into this situation, the Maceda Law was passed to help
protect you. It established the rights of a qualified buyer who cant
continue with his payments anymore.

Under the Maceda Law, there are two qualification categories of buyers
accorded protection. These buyers are:

1. Under Section 3 of Maceda Law, a buyer with at least 2 years of


installments

2. Under Section 4 of Maceda Law, a buyer with less than 2 years of


installments

RIGHTS OF A BUYER

Section 3
where the buyer has paid at least two years of installments, the buyer is
entitled to the following rights in case he defaults in the payment of
succeeding installments:

a. To pay, without additional interest, the unpaid installment due


within the total grace period earned by him, which is hereby fixed at the
rate of one month grace period for every one year of installment
payments made; provided that this right shall be exercised by the buyer
only once in every five years of the life of the contract and its extensions, if
any.

b. If the contract is cancelled, the seller shall refund to the buyer the
cash surrender value of the payments on the property equivalent to
fifty percent of the total payments made Down payments, deposits
or options on the contract shall be included in the computation of the
total number of installment payments made

Section 4

In case where less than two years of installments were paid, the seller
shall give the buyer a grace period of not less than sixty days from the
date the installment became due.

If the buyer fails to pay the installments due at the expiration of the grace
period, the seller may cancel the contract after 30 days from the receipt by
the buyer of the notice of cancellation or the demand for rescission of the
contract by a notarial act.

In other words, Section 3 of Maceda Law indicates that the buyer has a
right to a refund and grace periods as long as the buyer has paid at least
two years. However, if theres still less than 2 years of installment
payments made, the buyer is only entitled to 60 days grace period as
indicated in Section 4.
More importantly, there is a section in the Maceda Law that protects the
buyers from the fine prints of contracts imposed by the contractors or
developers. These fines prints are oftentimes neglected by the buyers to
review during the contract signing.

Section 7 of the Maceda Law states that:

Any stipulation in any contract hereafter entered into contrary to the


provisions of Sections 3,4,5, and 6 shall be null and void.

This section emphasizes the overriding power of the Maceda Law


against the contract made by the developer and the buyer.

FREQUENTLY ASKED QUESTIONS

The following questions have been commonly asked by our readers:

Does it apply when Ive been paying to the bank already?

A common practice today is for the developers to require only the


equity to be paid in installments. This equity or also called down
payment, varies from 10% to 50% (usually 20%), depending on the
developer or the particular development project. The remaining
balance after the equity, will be shouldered by some financing
scheme.

This financing scheme may be provided by:

o Banks
o HDMF (formerly PAG-IBIG)

o In-house Financing, by the developer themselves

o or other financing institutions

If you opt to pay your remaining balance using bank financing, that
means youll be taking a housing loan from the bank.

When you start paying to the bank, that means youve already taken
out your housing loan from them. When you took a loan from your
bank, you basically borrowed money and then you used that money
to pay the developer in full. But this all happened in the background
and the money did not go through your hands anymore. The bank
gave it straight to the developer. And this is what commonly confuses
people.

So now, your property has been fully paid as far as the


developer/seller is concerned. In fact, as far as the law is concerned,
your property has been fully paid already. But your loan from the
bank is whats outstanding. Your debt is now to the bank the
money you borrowed, to pay the developer.

So the answer to the question on whether this Maceda Law will still
apply, is no, it will not apply anymore. Thats because the property
is technically, already paid in full.

Does it apply when Ive been paying to PAG-IBIG already?

Please refer to the answer to the preceding question above.

My developer/seller is very slow or is already late in delivering


the property, will Maceda Law apply if I back out from the
purchase?
You check first when the developer is supposed to deliver the
property to you their supposed deadline. You may check your
contract. Or you may also call your nearest HLURB office and check
with them when is the deadline given to the developer, as indicated in
their License to Sell for the specific project where your property is in.

After determining that your developer is at fault, you may file a


complaint for recision of your contract and for total refunds plus
damages, as appropriate, at HLURB.

But as far as Maceda Law is concerned, it is not the appropriate law


to rely on, now. Read carefully the provisions of P.D. 957. This is
what applies in cases like this.

My developer is for some reason, the one whos at fault and I


want to back out. Will Maceda Law apply?

The Maceda Law only assures 50% refund on all the payments
youve made (or a little more as appropriate). If your developer is at
fault, you should not ask for only 50% refund but for the entire
amount youve already paid. You can even demand for damages as
you deem fit.

If your developer is at fault, the provisions of P.D. 957 may apply;


and/or the appropriate provisions of Book IV of the New Civil Code on
Obligations and Contracts.

Below is the full text of the Maceda Law from HLURB:

Download

OTHER LAWS PROTECTING BUYERS OF REAL ESTATE IN THE


PHILIPPINES
Further, there are other laws that protect the rights of condominium and
subdivision property buyers such as The Condominium Act of the
Philippines or RA 4726 and The Subdivision and Condominium Buyers
Protective Decree or Presidential Decree 957 (more commonly known
simply as PD 957).

Although both basically cover the same issue which is refunds, both
laws cover different situations on how the refunds are supposed to be
granted.

Depending on your situation, there are laws that protect you as a buyer.
Know your rights and you dont have to loose more money than you
have to. You may not know it, but you might even be entitled to receive
100% full refund of all the payments youve made.

Thinking of buying a property in the Philippines?

Make sure you do it right, in order to avoid ending up having to use the
Maceda Law. Work only with brokers who are reliable and who really know
what they are doing. See how we can help you today:

Check out our services

Disclaimer: The information in this post is not meant as legal advice and
should not be taken as such. See our full legal disclaimer.