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Philippine Property Laws Summary

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42 views3 pages

Philippine Property Laws Summary

Uploaded by

christelmae.gidraga.23
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Summary of Philippine Property Laws

1. Explanation of the Laws:

a. Recto Law
The Recto Law (Articles 1484-1486 of the Civil Code) applies to sales of personal property
where payment is made through installments (for example, appliances or vehicles). It’s
designed to protect sellers when buyers fail to pay their installments. If a buyer defaults, the
seller can choose one of these remedies:
1. Exact fulfillment: The seller can demand that the buyer continue making the payments.
2. Cancellation of the sale (rescission): The seller can cancel the contract and repossess the
item sold.
3. Foreclosure: If the item was mortgaged, the seller can foreclose, take the item back, and
sell it to recover unpaid amounts, but they can no longer sue for additional payment if they
have chosen foreclosure.

b. Maceda Law (RA 6552)


This law protects buyers of real estate on installment payments (for example, house and lot
purchases, subdivision lots). If you’ve been paying for at least two years, the law provides
more rights for you as the buyer in case of payment defaults. Specifically:
1. If you’ve paid two years or more, you are entitled to a grace period (one month per year
of installments paid) to catch up on missed payments without additional interest.
2. If the contract is canceled, you’re entitled to a 50% refund of the total payments made,
with an additional 5% per year after the fifth year of installment payments.
3. If you’ve paid less than two years, you have a 60-day grace period to settle your missed
payments. If you fail to do so, the seller can cancel the contract, but they are not required to
refund any payments.

c. Subdivision and Condominium Buyer’s Protective Act (PD 957)


This law provides strong protection for buyers of subdivision lots and condominium units.
It was enacted to stop deceptive practices by developers and ensure that buyers get what
they pay for. PD 957 requires developers to:
1. Deliver the property on time and according to what was promised.
2. Ensure buyers’ payments are secure (no hidden fees, no fraud).
3. Register the property titles properly.
4. If the developer does not comply, buyers can demand a refund of their payments, with
interest, and the government can also penalize the developer.

2. Requisites and Remedies:

a. Requisites for Recto Law to Apply


1. The sale must involve personal property (something movable like furniture, appliances,
or cars).
2. The payment method should be through installments.
3. The buyer must have defaulted on the payment terms of the installment contract.

b. Remedies Available to the Seller under Recto Law


1. Exact fulfillment: The seller can ask the buyer to pay what is due under the contract.
2. Rescind the sale: The seller can cancel the contract and take back the item sold.
3. Foreclosure: If the item is mortgaged, the seller can foreclose (take back) the item and sell
it to recover their loss.

c. Remedies Available to the Seller under Maceda Law


1. For buyers who have paid less than two years: The seller can cancel the contract if the
buyer fails to pay within a 60-day grace period, with no refund required.
2. For buyers who have paid two years or more: The seller can cancel the contract, but only
after giving the buyer a grace period (one month per year of installment payments). The
seller must also give the buyer a 50% refund of total payments, with an additional 5%
refund per year after the fifth year.
3. The seller can also allow the buyer to sell or assign their rights to another person,
provided that the seller is notified of this sale.

d. Rights of the Buyer under PD 957


1. Timely delivery: Buyers have the right to expect their subdivision lot or condominium
unit to be delivered on time and as agreed.
2. Refund: If the developer fails to comply, the buyer can ask for a refund, including interest.
3. No fraud: The buyer is protected from fraud, hidden charges, and misrepresentation.
4. Right to withhold payments: The buyer can withhold further payments if the developer
fails to comply with their obligations.

3. Examples:

a. Recto Law Example


A person buys a TV set from a store and agrees to pay it in 12 monthly installments. After
paying five installments, the buyer stops making payments. The store can then:
1. Ask the buyer to continue paying the balance (exact fulfillment),
2. Cancel the contract and take back the TV (rescission),
3. Or foreclose the item (if the TV was mortgaged) but can no longer ask for additional
payments beyond what they recover from the sale of the TV.

b. Maceda Law Example


A buyer has been paying for a house and lot for three years but suddenly loses their job and
can’t pay for two months. Under the Maceda Law, the developer must give the buyer a grace
period of three months to pay the missed installments. If the buyer still fails to pay, the
contract can be canceled, but the developer must refund 50% of the payments the buyer has
already made.
c. PD 957 Example
A buyer has paid in full for a condominium unit, but the developer fails to deliver the unit on
time. After waiting for several months, the buyer can demand a refund of the entire amount
paid, plus interest, under PD 957.

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