Do you want to know your rights as a real estate investor, or simply as a real estate buyer who is making installment payments? The first logical step would be to know what law applies and what that particular law contains, which in this case would be the full text of Republic Act No. 6552. More popularly known as the Maceda Law, the full text of RA 6552 follows.
Know the law and know your rights (photo credit: steakpinball via flickr)
REPUBLIC ACT NO. 6552
REALTY INSTALLMENT BUYER PROTECTION ACT
AN ACT TO PROVIDE PROTECTION TO BUYERS OF REAL ESTATE ON INSTALLMENT PAYMENTS
Section 1. This Act shall be known as the “Realty Installment Buyer Act.”
Sec. 2. It is hereby declared a public policy to protect buyers of real estate on installment payments against onerous and oppressive conditions.
Sec. 3. In all transactions or contracts involving the sale or financing of real estate on installment payments, including residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants under Republic Act Numbered Thirty-eight hundred forty-four, as amended by Republic Act Numbered Sixty-three hundred eighty-nine, 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 the 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.
Sec. 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 thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act.
Sec. 5. Under Section 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 updating 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.
Sec. 6. The buyer shall have the right to pay in advance any installment 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.
Sec. 7. Any stipulation in any contract hereafter entered into contrary to the provisions of Sections 3, 4, 5 and 6, shall be null and void.
Sec. 8. If any provision of this Act is held invalid or unconstitutional, no other provision shall be affected thereby.
Sec. 9. This Act shall take effect upon its approval.
Approved: August 26, 1972
Up next: Maceda Law salient features
Of course, this post will not be complete without covering the salient features of the Maceda Law. This will be covered in the next part of this series. Please watch for it.
To our success and financial freedom!
Jay Castillo
Real Estate Investor
PRC Real Estate Broker Registration No. 3194
Blog: http://www.foreclosurephilippines.com
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Text by Jay Castillo and Cherry Castillo. Copyright © 2011 All rights reserved.
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{ 13 comments… read them below or add one }
nice job on posting thanks its a good information for real estate buyers/investors
please post now the salient features of maceda law and recto law..please..
comment lang paano kung nagsign ako ng contract pero nakasaad duon na no refund policy? may karapatan pa din ba ako na marefund ung ininvest ko let say 2yrs na ako nakakabayad?
i guess yes kasi in Section 7 it states that any contract contrary to section 3-7 will be considered null and void…so meaning yung contract na nakalagay na you cant refund is void kasi it is also our rights as buyers to protect ourselves from developers. So any developers shouldnt claim any immunity to the law. So dapat makukuha mo parin ang 50% refund no matter what kaya nga ginawa ang batas na yan.
just want to ask about the 50% refund? makukuha b agad un ng buyer or paano ang procedure? kailangan b umalis muna ang buyer s bhay bago ibigay ung refund?
what if downpayment palang yung binayaran. pwede pa bang i withdraw yung contract??
Paano naman ang mga nakapagbayad lang ng 18 months, may makukuha din kaya kahit paano?? I look forward to your speedy response, thank you.
just want to ask if i will be entitled to 50%, i payed 27mos out of 30mos of downpayment, but i haven’t signed the contract yet since i’m outside the county. House and Lot not yet built.
Ask ko lng po kung may ma rerefund pa ako sa housing loan ko more than two years po kami tumira sa bhay namin then 1 year po kami nkatira sa bhay namin, pero tumagal po bkasyon ko as a seaman kaya di kami nkabayad, ngaun po umuupa n lng kami, may chance pa po ba na may ma refund kami kahit konti sa hinulog gko in 2 years.thank you po!!!
ang sister ko po ay kumuha ng house and lot last 2009..she had already paid the full downpayment last yr pa..ngkaroon ng problem ang developer kya nastop ang construction ng unit..early last yr inaasign ng developer sa isang bank yung property na kinukuha nya but until now wla pa ring malinaw na usapan between the two parties kya di pa rin matapos tapos yung bhay..my right po ba na irefund na lang ng sister ko yung downpayment na hinulog nya if she decide na magbackout na lng..kung ang developer ang nagkaroon ng problem kya di natuloy ang paghulog ng buyer applicable po ba ang maceda law pra walang marefund ang buyer if less than two yrs lng nakapaghulog sa downpayment? in the first place, she was given 12months to pay the downpayment in full..thank you and i hope that your response will help me to take some favorable actions regarding this matter..God Bless and more power..
We acquired a lot on Feb 20, 2010. We started paying the 6monthly installment on downpayment on March 20, 2010 and started paying the monthly amortization on Sept. 20, 2010. However, we defaulted on our monthly amortization last Feb. 20, 2012. My question is, how many months do we still have to pay in order for us to qualify for a refund of 50% according to the Maceda Law – RA6552?
ask ko lang po, kumuha po kami ng house and lot, may reservation agreement po ako pinirmahan na nakalagay dun na no refund. ang sabi pa sken 50% ng downpayment start ng gawin ang house, ang problema ko po tapos na po kami magbayad ng downpayment hangang ngaun po mag 2months nako naghihintay gawin yung house pero hangang ngaun wala pa din ginagawa bahay lagi lang saken sasabihin na gagawin na pero wala, balak ko nalang ewithdraw at maghanap ng bahay na ready to move in, pero sabi saken wala daw ako makukuha sa binayad ko, sila naman po hindi tumutupad sa usapan. may makukuha pa po ba ako sa downpayment na binayad ko? sana po masagot nio po ako salamat po & god bless.
Is Maceda law covered Pag-ibig Loan?WE have Pag-ibig housing loan for 10 years to paid we already paid for 4 years now. as of now di na kami makabayad. meron po pa kami marerefund as pag-ibig?