Questions Concerning the Implementing Rules and

Regulations of PD 957 and BP 220

Author: eZ publish admin

On the Design Standards and Guidelines

What are the latest minimum design standards ?

Under BP 220

Minimum lot area

Single Detached - 72 sqm for economic housing; 64 sqm for socialized housing
Duplex/Single Attached - 54 sqm for economic housing; 48 sqm for socialized housing
Rowhouse - 36 sqm for economic housing; 32 sqm for socialized housing

Minimum floor area

22 sqm for economic housing; 18 sqm for socialized housing

Under PD 957

Minimum lot area

Single Detached - 120 sqm for open market housing; 100 sqm for medium cost housing
Duplex/Single Attached - 96 sqm for open market housing; 80 sqm for medium cost housing
Rowhouse - 60 sqm for open market housing; 50 sqm for medium cost housing

Minimum floor area

42 sqm for open market housing; 30 sqm for medium cost housing

What are the latest price ceilings?

The current price ceilings as set by the Housing and Urban Development Coordinating Council (HUDCC)
are the following:
Socialized housing = PHP 300,000.00 and below;
Low Cost
- Level 1 = above PHP 300,000.00 to PHP 1,250, 000.00 (BP 220 standard);
- Level 2 = above PHP 1,250,000.00 to PHP 2,000,000.00 (PD 957 standard);
Medium cost = PHP 2,000,000.00 up to PHP 4,000,000.00;
Open Housing = above PHP 4,000,000.00

Are the revised IRRs for PD 957 and BP 220 already in effect?
The revised IRRs which were approved per Board Resolutions No. 699 and 700, Series of 2001 took effect
last 06 May 2002. Amendments approved per Board Resolution No. 725, Series of 2002 took effect on 26
July 2002.

How do we get copies of the new IRRs for PD 957 and BP 220?
Copies of the IRRs for PD 957 and BP 220 are available at the Rules and Standards Development Group,
2nd Floor of the HLURB Central Office, Kalayaan Avenue, Diliman, Quezon city. Requesting parties are
charged P200 per copy to cover cost of printing.

You may also download the IRRs of PD 957 & BP 200 in pdf from this link.
Where can 20% compliance to balanced housing requirement be located?
The 20% socialized housing requirement can be located within the same city or municipality as the main
project. In cases where this is not feasible, the compliance project may be located in any city or
municipality within the same region or in any city or municipality within the regions adjacent to it.
Questions Concerning the Urban Development and Housing
Act (RA 7279)

On the requirements of balanced Housing Development

How is the requirement of 20% socialized housing compliance computed , is it based on the gross
area or the saleable area of the project?

On the Gross area of the main subdivision project

Is this requirement of 20% compliance based only on area or also on project cost?

At the option of the developer , it can be based on either

What housing projects are covered?

All housing projects whose selling price is above PHP180,000

in highly urbanized areas and above, PHP150,000 in non urbanized areas

Are residential condominiums covered?

No; per Opinion of the Department of Justice, the law aplipes only to subdivisions; condominiums are a
different type of project, and there is no legal basis for requiring them to be covered by this requirement

Questions Concerning Land Use Plans and Planning

Guidelines

On CLUP Guidelines

How many volumes are the guidelines ?

Ten (10) in all

What are the Costs per volume ?

(Demography) = PHP 100.00

Volume 1

(Social Sector) = PHP 350.00

Volume 2
 (Economic Sector) = PHP 350.00
Volume 3

(Infrastructure) = PHP 250.00

Volume 4

(Land use) = PHP 300.00

Volume 5

(Local Admin) = PHP   80.00

Volume 6

(Mapping) = PHP 200.00

Volume 7

(Report Writing) = PHP   50.00

Volume 8

(Plan review) = PHP 200.00

Volume 9

(Model Zoning Ordinance) = PHP 150.00

Volume 10

Questions Concerning Subdivision/Condominium Projects

What is a subdivision project?

Subdivision project refers to a parcel of land registered under Act No. 496 which is partitioned into
individual lots for residential, commercial, industrial or other purposes with or without improvements
thereon, and offered for sale to the public.

What is a condominium project?

Condominium project refers to the entire parcel of real property divided or to be divided into condominium
units for residential, commercial, industrial or other purposes, including the structure thereon.

Can a chapel be constructed in open space reserved for parks and playgrounds?

No. Open space reserved for parks and playground is non-buildable and chapel as well as other
subdivision’s facilities may only be constructed in open space not reserved for parks and playground.

Can a Developer sell the subdivision’s open space?

No because subdivision’s open space is beyond the commerce of man.

Can an owner/developer of a subdivision project impose a height limitation on the house to be

constructed therein?

Yes, in order to preserve the style and uniformity of project but height limitation should not be contrary to
the approved zoning ordinance the same will be deemed inoperative.

 
Questions Concerning Certificate of Registration/License To
Sell

Where can a prospective buyer check whether a subdivision project has a Certificate of Registration
and License to Sell

He can check it with the Regional Office Of the HLURB which has jurisdiction of the place where the
project is located

What is the remedy of a buyer to recover his payment upon knowing that the owner/developer of the
subdivision/condominium has no license to sell?

He may demand from the seller the refund of the amount he already paid by filling a complaint with
HLURB.

What is the liability of the subdivision owner if he sold subdivision lots without license to sell? What
is the effect of the sale?

The sale is valid but the owner is liable to pay administrative fine for unauthorized selling.

While, the buyer may opt to rescind the contract and demand for a refund or proceed with the sale.

Is pre-selling allowed?

No. Pre-selling which is disposing for valuable consideration of subdivision lots or condominium units I a
subdivision or condominium project to the public prior to the issuance of Certificate of Registration and
License to Sell is a violation of PD 957.

Are owners/developers of the columbariums required to secure License to Sell?

Yes, Construction and/or development of columbariums and crematoriums, including the sale thereof to the
public is subject to HLURB Rules and Regulations for Memorial Parks and Cementeries. Thereof, the
owner/developer thereof is required to secure the necessary license to sell for selling the columbarium units
 
Questions Concerning Real Estate Management

What can be done when a buyer found out that the size of the lot in the Deed of Restrictions and
Contract to Sell that he originally signed did not match with what is indicated in the title?

If the sale is on a per square meter basis and the area turns out to be smaller, the buyer is entitled to a
reduction of the price. In the same way the area turns out to be bigger, the buyer should pay for the increase
in area.

In other case, the buyer may have opt to rescind the contract if he would not have bought the property had
he known of the difference in the area.

Is a subdivision owner bound by each advertisement even though the facilities advertisers are not
included in the approved plan?

Yes.

What is the period of time to complete the facilities as advertised?

Refer to Sec. 20 of P.D. 957

Who will pay for the electric consumption for street lights before the same are donated to the LGU?

The new IRR of PD 957 and BP 220 provide for the proportionate sharing by the subdivision owner and
subdivision buyers.

Questions Concerning Homeowners Association

Do we still need to register anew our association with the SEC after we register in HLURB?

No, the moment a Certificate of Registration is issued, the association acquires and continues juridical
personality. However, submission of financial statements and other reportorial requirements shall now be
with the HLURB.

Can officers of a developer collect association dues or fees from homeowners for the maintenance
and security of a subdivision?

No, because association dues or fees for the maintenance and security of a subdivision can only be
collected by a property organized Homeowners Association with the consent of a majority of the lot or unit
buyers actually residing in the subdivision project (Sec. 27 of PD 957)

More HOA Queries

Filipino Version

Sino ang maaaring magtatag ng Homeowners’ Association?

Ang maaaring magtatag ng asosasyon ay mga nakatira sa subdivision na wala pang asosasyon at mga taong
nais magakaroon ng bahay at lupa sa ilalim ng mga programang pabahay ng pamahalaan.

Saan nagpapaparehistro ng Homeowners’ Association?

Ang asosasyon ay ipinarerehistro sa regional office ng HLURB na nakakasakop sa subdivision o lupang
nais bilhin ng asosasyon.

Ilan dapat ang bilang ng incorporators?

Ang bilang ng incorporators ay hindi dapat bababa sa lima at hindi hihigit sa labinglima.

Ilan dapat ang bilang ng directors?

Ang bilang ng directors ay hindi dapat bababa sa lima at hindi hihigit sa labinglima.

Ilan dapat ang bilang ng mga kasapi ng isang asosasyon?

Sa mga asososyon sa subdivision, walang limitasyon ang dami ng miyembro. Sa mga asosasyon ng mga
mangungutang sa CMP, ang bilang ng miyembro ay hindi dapat lalampas sa tatlong daan.

Bakit inirerehistro ang isang asosasyon?

Inirerehistro ang isang asosasyon upang ito ay magkaroon ng juridical personality na iba sa mga opisyales
at kasapi nito.

Ilan dapat ang bilang ng directors o trustee?

Ang bilang ng directors o trustees ay hindi dapat bababa sa lima at hindi hihigit sa labinglima katao.

Sapilitan ba ang pagpapatala ng isang asosasyon?

Sa mga subdivision, ang pagpapatala ng asosasyon ay hindi sapilitan ngunit sa mga nais mapasailalim ng
CMP, ito ay kailangan dahil hindi sila pauutangin kung hindi sila rehistrado.

Ano ba ang alituntunin tungkol sa pangalan ng asosasyon?

Ang pangalan ng isang asosasyon ay hindi dapat kasingtulad, kasing tunog o kasing hawig ng isang
asosasyon na nakatala o nakarehistro na. Ito ay para maiwasan ang pagkalito ng mga tao kung aling
asosasyon ang kanilang kaharap o kausap.

Ano ang nilalaman ng Articles of Incorporation?

Ang nilalaman ng Articles of Incorporation ay ang mga sumusunod:
1. Pangalan ng asosasyon
2. Pakay ng pagtatag ng asosasyon
3. Lugar ng opisina ng asosasyon na dapat ay nasa Pilipinas
4. Tagal ng buhay ng asosasyon
5. Mga pangalan, nationalities at tirahan ng mga incorporators
6. Bilang ng mga directors o trustees
7. Bilang ng kapital, ng mga pangalan, nationalities at tirahan ng mga nag-ambag at kung magkano
ang inambag ng bawa’t isa
8. Iba pang mga bagay na hindi labag sa batas na mahalaga sa pagkakaalam ng mga incorporators

Ano ang mga dapat na nilalaman ng By-Laws?

Ang mga dapat na nakasaad sa By-Laws ay ang mga sumusunod:
1. Lugar, oras at paraan ng pagtawag at pagdaos ng pulong ng mga directors o trustees
2. Lugar, oras at paraan ng pagtawag at pagdaos ng pangkalahatang pulong
3. Kinakailangang dami o bilang ng dadalo sa mga pulong at halalan
4. Paraan ng proxies at paraan ng pagboto ng proxy
5. Qualifications at disqualifications, tungkulin at pabuya sa mga directors o trustees
6. Araw ng halalan at paraan ng pagbigay ng paalala o pagtawag ng halalan
7. Paraan ng paghalal o pagtalaga at tagal ng panunungkulan ng mga director o trustees at mga
opisyales
8. Mga parusa sa paglabag ng mga alituntunin o By-Laws
9. Mga bagay na mahalaga at kanais-nais para sa asosasyon

Ano ba ang mga kapangyarihan o maaaring gawin ng isang asosasyon?

Ang mga maaaring gawin ng isang asosasyon ay ang mga sumusunod:
1. Maghabla at ihabla sa ilalim ng pangalan ng asosasyon
2. Ang magmana sa ilalim ng pangalan ng asosasyon habang ito ay hindi pa nabubuwag
3. Gumamit ng selyo ng isang korporasyon o asosasyon
4. Pagsusog ng Articles of Incorporation ayon sa Batas Pambansa Bilang 68
5. Paggawa ng By-Laws na hindi taliwas sa batas, kagandahang asal, polisiya ng publiko at ang
pagsususog nito
6. Tumanggap, bumili, mamigay, umupa, o humawak ng ari-arian ng sang ayon sa batas
7. Makipag-isa o sumapi sa ibang asosasyon upang makabuo ng isang asosasyon
8. Mamigay ng mga ari-arian ng asosasyon
9. Tumanggap ng mga kasapi
10. Gawing ang mga bagay na ikakatupad ng hangaring ng asosasyon na nakasaad sa Articles of
 Incorporation na hindi labag sa batas

Ano ang hindi maaaring gawin ng isang asosasyon?

Ang isang asosasyon ay hindi maaaring magkaroon o gumawa ng anumang karapatan maliban sa mga
ibinibigay dito ng batas at ng Articles of Incorporation at mga kaakibat ng mga kapangyarihang sasabi.

Gaano katagal ang buhay ng isang asosasyon?

Ang asosasyon ay maaaring tumagal ng limampung taon, maliban na lang kung ito ay bibigyan pa ng
karagdagang panahon o babawasan sa pamamagitan ng pagsusog ng Articles of Incorporation o
pagdissolve o pagbuwag nito ng mga opisyales at kasapi nito o ng pamahalaan/HLURB.

Kailan nagsisimula ang buhay ng isang asosasyon?

Ang asosasyon ay nagkakaroon ng buhay mula sa araw na ito ay mabigyan ng Certificate of Registration.

Sino ang nag-aapruba ng mga amiyenda sa Articles of Incorporation at By-Laws?

Ang majority ng board of directors o trustees ang unang nag-aapruba ng anumang amiyenda sa mga
provisions ng Articles of Incorporation at By-Laws at pinagtitibay ito sa pamamagitan ng isang Board
Resolution. Pagkatapos, ito ay ipapaapruba sa two-thirds o majority ng mga miyembro ng asosasyon.

Kailan nagkakabisa ang mga inamiyendahan sa Articles of Incorporation at By-Laws?

Ang Amended Articles of Incorporation at By-Laws ay nagkakabisa sa araw na ito ay maaprubahan ng
HLURB at mabigyan ng Certificate of Filing of Amended Articles of Incorporation and By-Laws kapag
naisumite lahat ng requirements ng opisina at ang mga amendments ay di labag sa batas.

Ano ang obligasyon ng asosasyon sa HLURB pagkatapos na ito ay mairehistro?

Ang asosasyon ay dapat magsumite sa HLURB ng reportorial requirements ukol sa resulta ng eleksyon ng
mga directors at officers at estadong pinansyal ng asosasyon kada taon, depende sa termino ng mga
opisyales. Dapat ding patatakan ang mga libro ng asosasyon sa HLURB.

Ano ang epekto kapag ang isang asososasyon ay hindi nakarehistro?

Kapag ang isang asosasyon ay hindi nakarehistro at ginagampanan at nag-ooperate sya na gamit ang
karapatan at pribilehiyo ng isang rehistradong asosasyon, ang mga opisyales at miyembro nito ang personal
na mananagot sa mga obligasyon at mga paglabag sa batas ng nasabing de facto association.
Questions Concerning Urban Land Reform and Areas for
Priority Development

What is the Urban Land Reform Law?

Presidential Decree No. 1517 issued on June 11, 1978 is what is known as the Urban Land Reform Law. It
was a piece of legislation that instituted the Urban Land Reform Program of the government. Briefly, this
program aims to rationalize -- with due process and through equitable means -- the existing pattern of land
use and ownership in urban and urbanizable areas. As such, it involves the imposition of certain limitations
on the use by the owner of his property.

Is urban land reform the same as agrarian reform?

No.

Agrarian reform (AR) involves the diffusion of land ownership through the imposition of retention limits
for owners of large tracts of land. It is mandatory in the sense that the landowner cannot refuse not to sell
the agricultural land in excess of the retention limit to the tenants who till the same.
In urban land reform (ULR), on the other hand, a landowner cannot ordinarily be compelled to sell the land
to the tenant. It is only when the land is expropriated that he or she is forced to sell, but only after due
process. In the event, however, that a landowner voluntarily decides to sell the property, the tenant has a
pre-emptive right to buy the property or the “right of first refusal” before it can be legally sold to another.
The law compels him merely to offer it first to the tenant.

In AR, all agricultural lands are covered although exemptions may be applied for. On the other hand, ULR
applies only to selected parcels of urban land.

Is the “right of first refusal” available to all urban tenants?

No. PD 1517 limited its application to Urban Land Reform Zones or specific parcels of land later identified
and proclaimed.

What are Areas for Priority Development or APDs?

The term Areas for Priority Development (APDs) was used in the pertinent decrees and proclamations
interchangeably or alternatively with the term Urban Land Reform Zones (ULRZs). From all indications
they have the same meaning. They refer to the 244 areas in Metro Manila specifically described and
identified in Proclamation 1967, and other sites later identified and proclaimed.

How many APDs/ULRZs are there at present?

There are at present 284 APDs / ULRZs.

In addition to the 244 APDs in Metro Manila under Proclamation No. 1967 and Dagat-Dagatan, Tondo
under Proclamation No. 2284, nineteen (19) Slum Improvement and Resettlement (SIR) sites were included
pursuant to Proclamation No. 1810 (Declaring that all sites under the Zonal Improvement Program (ZIP)
and SIR areas shall become ULRZs upon proclamation by the President). These are located in the regional
cities of Bacolod, Cebu, Cagayan de Oro and Davao. Subsequently, pursuant to the same decree, the
National Housing Authority identified and proclaimed 20 more APD sites – 19 in Metro Manila and one in
Cebu City.

In summary:

Number of APDs/ULRZs

By Proclamation No. 1967 - 244

By Proclamation No. 2284 - 1
By Proclamation No. 1810 - 19
By NHA Approval - 20

Total - 284

What is the significance of a parcel of land’s being within an APD/ULRZ?

Within an APD/ULRZ:

1. Legitimate tenants who have resided on the land for ten years or more who have built their homes
on the land, and residents who have legally occupied the lands by contract, continuously for the
last ten years shall not be dispossessed of the land and shall be allowed the right of first refusal to
purchase the same within a reasonable time and at reasonable prices.
2. No urban land can be disposed of or used or constructed on unless its disposition or use conforms
with the development and zoning plans. This is implemented through the requirement of
development use permit or locational clearance for projects within these areas.
3. In cases where the tenants and residents are unable to purchase the said lands, the government may
 acquire the same by expropriation or other land acquisition techniques in accordance with the
policies of existing laws.

May apartment dwellers invoke the “right of first refusal”?

No. The law is explicit that it applies only to urban land.

How do we know whether or not the land that we own or the land that we lease is within an APD or
ULRZ?

HLURB prepared books of detailed maps and land use plans for 245 APD sites declared under
Proclamation 1967 and 2284 and has condensed this to a Locational Reference Handbook which is
available to the public. This handbook presents the physical location of the sites though maps in relation to
their immediate vicinity and provides the precise location and complete boundary description. If necessary,
HLURB also issues a certification whether or not a piece of property is within or outside of an APD.

Did the Urban Development and Housing Act of 1992 (Republic Act No. 7279) repeal the Urban
Land Reform Law?

No. UDHA is actually more expansive than the ULR law.

As to Coverage:

PD 1517: Limited to areas proclaimed

RA 7279: All lands in urban and urbanizable areas, including existing areas for priority development
sites, and in other areas that may be identified by the local government units as suitable for socialized
housing.

As to Thrust

PD 1517: Land tenancy protected, with land purchase and expropriation only as an incident thereof
RA 7279 : Socialized Housing as primary strategy for providing shelter to put an end to tenancy status

As to Beneficiaries:

PD 1517: Legitimate tenants

RA 7279: Underprivileged and homeless citizen, must not own any real property, not a professional
squatter or a member of squatting syndicates;--must be actual occupants to avail of right of first refusal if
property is government-owned or acquired.

Questions Concerning Real Estate Brokers and Salesmen

FAQs

Revocation of Registration as Brokers and Salesmen

Registration may be refused or any registration granted be revoked by the Board, if, after reasonable notice
and hearing, it shall determine that such applicant or registrant:

1. Has violated any provisions of Section 11 of PD 957 or any rules or regulations being
implemented;
 2. Has made a material false statement in his application for registration;
3. Has been guilty of a fraudulent act in connection with any sale of a subdivision lot or
condominium unit;
4. Has demonstrated his unworthiness, to transact the business of broker or salesman, as the case
may be.

In case of charges against salesman, notice thereof shall also be given the broker employing such salesman.

Pending hearing of the case, the Board shall have the power to order the suspension of broker’s or
salesman’s registration provided that such order shall state the cause for the suspension.

The suspension or revocation of the registration of a broker shall carry with it all the suspension or
revocation of the registrations of all his salesmen.

In cases, the licensed brokers or salesmen decided to voluntary cease from further engaging in the real
estate business, the broker or salesman shall surrender his Certificate of Registration to the Board and
his/her name shall be cancelled from the Books of Register.

Voluntary Cancellation of Registration

In case the broker or salesman decided to discontinue his practice as a real estate agent, the broker or
salesman may apply in writing with the Board for the temporary cancellation of his registration provided
that said broker or salesman must renew his/her license for the current year. If this was undertaken, and the
broker or salesman decided to continue his/her practice after a period of time, shall not be penalized by the
Board and/or the DTI for his/her non-renewal of registration.
Thursday the 26. June 2008     19:43 Time

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iv. Subdivision & Condominium Laws

1. R.A. 4726 – Condominium Act

2. R.A. 7160 – devolves to LGUs the issuance of approval of subdivision laws
3. R.A. 7279 – Urban Development and Housing Act of 1992
4. R.A. 7899 – amendments to the Condominium Act

5. R.A. 9347 - an act establishing reforms in the regulation of rent of certain residential units,
provideing the mechanisms therefor and for other purposes.  
6. P.D. No. 957 – Regulating the Sale of subdivision lots and condominium  
7. P.D. No. 1216 – Defining open space in residential subdivision and amending Sec. 31 PD
957 requiring subdivision owners to provide roads, alleys, sidewalks and reserve open space
for park and recreational use.
 8. E.O. 71 – identifies the functions of HLURB devolved to the LGU and those functions
retained by HLURB
9. E.O. 72 – devolved to sangguniang panlalawigan the approval of comprehensive land use
plans
10. E.O. No. 143 – directing HUDCC to oversee the implementation of a local government
pabahay program
11. E.O. 184 – Creating Socialized Housing One-stop Processing Centers  
12. E.O. No. 216 - Amending Executive Order No. 159 S. 1999 and further strengthening the
Housing and Urban Development Coorfinating Council.
13. E.O. No. 258 – Prescribing Time Standards in the Issuance of Permits for Housing Projects
14. E.O. No. 648 – granting HSRC (now HLURB) the power to implement the regulatory aspects
of the Subdivision Condominium Buyer’s Protective Decree and other related laws  
15. B.P. 220 – An act authorizing the MHS (now HUDCC) to establish and promulgate different
levels of standards and technical requirements for economic and socialized housing projects
in urban and rula areas.
16. E.O. No. 90 – designates HLURB as sole regulatory body for housing and development
17. P.D. No. 953 – planting trees required for owners of existing subdivisions
18. HLURB Resolution No. R-699-01 – Amending the Rules and Regulations Implementing the
Subdivision and Condominium Buyer’s Protective Decree and other Related Laws

v. Agrarian Laws

a. R.A. 6657 – Comprehensive Agrarian Reform Law of 1988

b. R.A. 8435 – Agriculture and Fisheries Modernization Act of 1997

c. DAR No. 01-99 – Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-
Agricultural Uses

vi. Environmental Laws

vii. Financing Regulations

1. R.A. No. 6552 – An Avt to provide protection to Buyer of Real Estate on installments   payments

2. HDMF Circular No. 189-C – amended guidelines of the PAG-IBIG Housing Loan Program

viii. Others

1. R.A. No. 9182 – Special Purpose Vehicle (SPV) Act of 2002

Pending Legislation

i. House Bill No. 70

ii. House Bill No. 1081

iii. House Bill No. 986

iv. Senate Bill No. 1295

Buyers

Before Buying
Click here for Filipino Version
1. Check if the Project has a License to Sell.
You should ask the seller or broker/agent of the owner/developer if the project is registered and
has a License to Sell issued by HLURB:
o This can be verified in the HLURB website (www.hlurb.gov.ph) for list of projects with
approved Certificate of Registration and License to Sell;
o Or you may go to the nearest HLURB Regional Office for this information (Click here
for the names and addresses of HLURB Regional Officers with its telephone number).
2. Conduct a personal visit to the subdivision/condominium, where the house and lot or condo unit to
be purchased is located;
If the project has a License to Sell, you may already enter into a Contract to Sell with the
owner/developer. However, there are things which must be checked:
3. The date of completion of the project as indicated in the License to Sell;
4. If the property is mortgaged, it should have a Clearance to Mortgage from the HLURB;

5. That the facilities and amenities represented in the advertisement flyers/ brochures are in
accordance with the approved subdivision and condominium plan on file with HLURB.
When Buying
1. Check if the broker/agent is registered with HLURB;
2. Check if the property has not been sold to other buyers;
3. Look into your source of income whether you can afford to pay the equity and the monthly
installments;
4. Check if the materials of the house conform with the development standards and approved
construction specifications submitted to HLURB;
5. Check who would pay the cost of the water and electric meters, the subdivision perimeter fence,
etc;.

6. Check who would eventually operate the subdivision water system.

Before Signing the Contract to Sell
1. Don’t sign any blank form of the Contract to Sell;
2. Read thoroughly all the contents of the Contract to Sell more especially the terms and conditions
in fine print;
3. Secure a copy of the Contract to Sell and all other documents that you signed;
4. Make sure that the Contract to Sell would be registered by the owner/developer to the Register of
Deeds;
5. Pay directly to the owner/developer or the marketing agent authorized by said owner/developer
 only; and

6. Ask an official receipt on all payments for your file.

Right to a Clean Title
The buyer of a subdivision lot or condominium unit shall have a right to a clean title of said lot or unit upon
the full payment of the purchase price. If the lot or unit is mortgaged, the owner/developer shall redeem the
mortgage within six months from full payment so that the title could be delivered to the buyer. The only fee
collectible from the buyer is the registration fee for the deed of sale in the Registry of Deeds.
Read more
Time of Completion of the Project
The two most pressing questions an excited or anxious buyer would ask are:
1. When will the project be completed?
2. What are the facilities and amenities that go with my purchase of a unit?

Read more
Non-Forfeiture of Payments
A buyer’s payment for a subdivision lot or condominium unit cannot be forfeited by the owner or developer
when he desists paying on the ground that the project is not develop per approved plans and within the time
limit for development. He must, however, notify the owner or developer of his decision to suspend
payments.
Read more
Failure to Pay Installments
In case the buyer fails to pay his installments for other reasons not attributable to the non-development of
the project i.e. he failed to raise the needed money, he may avail of his rights under Republic Act 6552,
Realty Installment Buyer Protection Act. This is so provided under Section 24 of PD 957, thus:
SECTION 24. Failure to Pay Installment. – The rights of the buyer in the event of his failure to pay the
installment due for reason other than the failure of the owner or developer to develop the project shall be
governed by Republic Act No. 6552.

Where the transaction or contract was entered into prior to the effectivity of Republic Act No. 6552 on
August 26, 1972, the defaulting buyer shall be entitled to the corresponding refund based on the
installments paid after the effectivity of the law in the absence of any provision in the contract to the
contrary.
Rights of a Defaulting Buyer under RA 6552
Realty Installment Buyers Protection Act (MACEDA LAW)
Downloadable version in pdf

Right to update payments without additional interest or in the alternative a refund of cash surrender
value.

There are two categories of buyers accorded protection under this law:

1. a buyer with at least 2 years of installments under Section 3 RA 6552, and

2. a buyer with less than 2 years of installments under Section 4 RA 6552

Buyer with at least two (2) years of installment – Section 3 RA 6552

If the buyer in this category defaults in the payment of his succeeding installments, he is entitled
to the following rights:

a. to pay without additional interest the unpaid installments due within the total grace period earned
by him. Said grace period is equal to one (1) month for every year of installment payments he has made.
Here the buyer has at least two (2) months grace period for he should have paid at least two (2) years of
installments to avail of the rights under this section.
This right can be exercised by the buyer only once in every five years of the life of the contract.
b. to be refunded of the cash surrender value of his payments equal to 50% of his total
payments if the contract is cancelled. But if he has paid five years or more, he is entitled
to an increase of 5% every year and so on but the cash surrender value shall not exceed
90% of his total payments.

The actual cancellation of the contract referred to above shall take place only:
1. after 30 days from receipt by the buyer of the notice of cancellation or demand
for rescission, AND
2. upon full payment to the buyer of the cash surrender value.

In the computation of the total number of installment payments the following are
included:

1. down payment and

2. deposit or option money

Section 3 of RA 6552 provides, thus:

“SECTION 3. In all transactions or contracts, involving the sale or financing of

real estate on installment payments, including residential condominium
apartments … 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 installments 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 per cent of
the total payments made and, after five years of installments, an additional five
per cent every year but not to exceed ninety per cent of the total payments made;
provided, That the actual cancellation of the contract shall take place after thirty
days from receipt by the buyer of the notice of cancellation or demand for
rescission of the contract by a notarial act and upon full payment of the cash
surrender value to the buyer.

“Down payments, deposits or options on the contract shall be included in the

computation of the total number of installment payments made.”

Buyer with less than 2 years of installments Section 4 RA 6552

If he has paid less than two (2) years of installments, he still has the right to pay within a grace
period of not less than sixty (60) days from the date the installment became due.

If the buyer fails to pay the installment due at the expiration of the grace period, i.e. 60 days, the
seller may cancel the contract after 30 days from receipt by the buyer of the notice of cancellation
or demand for rescission of the contract by a notarial act.

Here the buyer is not entitled to any refund.

Section 4 of RA 6552 provides, thus:

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

Right to Assign/Reinstate Contract

The buyer has a right to sell or assign his rights over the lot or unit to another person or reinstate the
contract by updating the account provided this is done during the grace period and before actual
cancellation of the contract.

Section 5 of RA 6552 states:

“SECTION 5. Under Sections 3 and 4, the buyer shall have the right to sell his rights or assign the same to
another person or to reinstate the contract by upgrading the account during the grace period and before
actual cancellation of the contract. The deed of sale or assignment shall be done by notarial act.”

Right to Advance Payment without Interest and Annotation of Full Payment in the Title Subject of
the Sale

The buyer has the right to pay in advance any installments or the full unpaid balance without interest any
time and have such full payment annotated in the title.

Section 6 of RA 6552 states:

“SECTION 6. The buyer shall have the right to pay in advance any installments or the full unpaid balance
of the purchase price any time without interest and to have such full payment of the purchase price
annotated in the certificate of title covering the property.”
Sanctions for Violating PD 957
A violation of the provisions of the decree and its implementing rules and regulations will carry
administrative and penal sanctions. The liability extends to controlling persons in cases where the violator
is a partnership or corporation. The violation usually carries administrative and criminal penalties. The
HLURB as a quasi-judicial entity has jurisdiction over administrative aspect of the case while the criminal
aspect is lodge before the fiscal’s office and accordingly if there is a finding of probable cause a criminal
action is filed in the civil courts.

Section 38, 39 and 40 of PD 957 provides:

“SECTION 38. Administrative Fines. – The Authority may prescribe and impose fines not exceeding ten
thousand pesos for violations of the provisions of this Decree or of any rule or regulation thereunder. Fines
shall be payable to the Authority and enforceable through writs of execution in accordance with the
provisions of the Rules of Court.

“SECTION 39. Penalties. – Any person who shall violate any of the provisions of this Decree and/or any
rules or regulation that may be issued pursuant to this Decree shall, upon conviction, be punished by a fine
of not more than twenty thousand (P 20, 000.00) pesos and/or imprisonment of not more than ten (10)
years: Provided, that in the case of corporations, partnership, cooperatives, or associations, the President,
Manager or Administrator or the person who has charge of the administration of the business shall be
criminally responsible for any violation of this Decree and/or the rules and regulations promulgated
pursuant thereto.

“SECTION 40. Liability of controlling persons. – Every person who directly or indirectly controls any
person liable under any provision of this Decree or of any rules or regulation issued thereunder shall be
liable jointly and severally with and to the same extent as such controlled person unless the controlling
person acted in good faith and did not directly or indirectly induce the acts constituting the violation or
cause of action.”

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Venue for Filing of Cases for Violation of PD 957
A violation of the provisions of PD 957, as amended, carries civil and criminal liabilities which are
punishable primarily under PD 957 and other applicable penal laws.

An aggrieved buyer of a subdivision house and lot or a condominium unit may file the civil aspect of the
violation with the HLURB, a quasi-judicial government agency for housing and land development. The
proceedings on the civil case is governed by Rules of Procedure of HLURB. The proceedings is summary
in nature and the provisions of the Rules of Court is not applicable except in a suppletory character.
Read more
Task Force to Monitor Investment Scheme in Real Estate Project.
There are news of buyers who have invested hard earned money in the purchase of lots or condominium
units but find themselves short changed has been a cause for alarm. They found that projects were either
not existing or the housing units badly constructed.

Relative to this the Office of the President issued Administrative Order No. 185 creating an Investor
Protection Task Force (IPTF).

The IPTF has the power to monitor and give public warning on questionable schemes and products and
investigate and recommend prosecution of the perpetrators with the Department of Justice.

Administrative Order No. 185

“Administrative Order No. 185. Creating an Investor Protection Task Force

Section 1. There is hereby created an Investors Protection Task Force (IPTF) to monitor investment
schemes, including real estate projects, especially those marked to the public and Overseas Filipino
Workers.

Section 2. THE IPTF shall be headed by the Department of Finance, with the following as members:

Securities and Exchange Commission

Department of Trade and Industry
National Bureau of Investigation
Department of Labor and Employment
Housing and Land Use Regulatory Board

Section 3. The IPTF shall undertake the following activities:

1. Monitor investment schemes and products;
2. Give public warnings on questionable schemes and products;
3. File evidence and recommend prosecution to the DOJ; and
4. Recommend appropriate legislation and regulations for investor protection”

Read more
Prohibition Against Owner/Developer to Collect Fees for Community Benefit
May an owner/developer collect contributions from buyers to finance certain services for community
benefit? No.
 Any collections for said purpose may only be done by the duly organized homeowners association but with
the consent of the actual residents in the project.

Section 27 of PD 957 provides, thus:

“SECTION 27. Other Charges. – No owner or developer shall levy upon any lot or unit buyer a fee for an
alleged community benefit. Fees to finance services for common comfort, security and sanitation may be
collected only by a properly organized homeowners association and only with the consent of a majority of
the lot or unit buyers actually residing in the subdivision or condominium project.”
Mga Dapat Tandaan Kung Bibili ng Bahay at Lupa sa Isang Broker o
Developer
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