Act 4118 – Act 3135 as amended and governs extrajudicial foreclosures

Updated on May 4, 2015 by 6 Comments

As mentioned in my previous post which contains the full text of Act No. 3135, I am posting here Act No. 4118 which amends the original Act 3135. However, after reading the contents of Act No. 4118, I am inclined to believe that the full text of Act 3135 which I shared in my previous post was already Act 3135 as amended by Act 4118.

Why am I posting these? For starters, I just want to be sure that we are all on the same page when it comes to extrajudicial foreclosure sales in the Philippines. Please continue reading to find out more…


SECTION 1. Section six of Act Numbered Thirty-one hundred and thirty-five, entitled “An Act to regulate the sale of property under special powers inserted in or annexed to real-estate mortgages,” is hereby amended to read as follows:

Section 6. In all cases in which an extrajudicial sale is made under the special power herein before referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of the sale; and such redemption shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act.”

SECTION 2. The following three sections are hereby inserted after section six of said Act Numbered Thirty-one hundred and thirty-five:

Section 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

Section 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of possession cancelled, specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety-six; but the order of possession shall continue in effect during the pendency of the appeal.

Section 9. When the property is redeemed after the purchaser has been given possession, the redeemer shall be entitled to deduct from the price of redemption any rentals that said purchaser may have collected in case the property or any part thereof was rented; if the purchaser occupied the property as his own dwelling, it being town property, or used it gainfully, it being rural property, the redeemer may deduct from the price the interest of one per centum per month provided for in section four hundred and sixty-five of the Code of Civil Procedure.”

SECTION 3. The number of the present section seven of said Act Numbered Thirty-one hundred and thirty-five is hereby changed, making it section ten.

SECTION 4. This Act shall take effect on its approval.

Approved, December 7, 1933


To date I have only been featuring information and listings of two of the most common types of foreclosures we can invest in here in the Philippines. These are bank foreclosed properties or acquired assets and real property being sold through tax foreclosure auctions.


Soon I will be posting listings and information about a third type of foreclosures which are properties that are to be sold through an extrajudicial foreclosure sale. This is governed by Act 3135 as amended by Act 4118 hence if you are interested in participating in such auctions, you can use these as reference on how they are generally conducted.

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To our financial freedom!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
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Text by Jay Castillo. Copyright © 2009 All rights reserved.

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  • Aaron B. Satira

    Good day! We are taking care of a land for about 30 years, it was owned by my father’s uncle. September 2009, they offer it to us to buy the aforesaid land and we show great intent of buying it, but we don’t agree with the price at that time. Yesterday, January 16,2012, the owners came in and accompanied by their buyer without informing us that the price of the land is closed to my offer price last 2009. The land is adjacent to our own land. Could I apply LEGAL REDEMPTION because I can buy the same price they sold it to the third party? Knowing we are the tenants of the aforesaid land, is TRADITO BREVI MANO applicable also in filing case and complaint against them? Thank you.

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  • Darwin D. Destacamento

    Greetings! I have a housing loan with the Philippine National Bank, payable through my salaries. PNB filed a trumped-up criminal charges against me which I won for 11 years of legal battle on Dec. 19, 2007. Because of this, I was not able to pay my housing loan up to the time that PNB foreclosed my property and a certificate of sale was annotated at the back of my title, the date of inscription was Feb. 17, 2003. Until now, PNB has not consolidated my title to its name. Recently, on Mar. 28, 2011, when I went to PNB Bacolod Branch to inquire status of my letter dated Sept. 21, 2006 yet regarding my offer to re-purchase my property, unfortunately, AM Flaviano Caracut informed me that my property was already sold in the first week of January 2011. I went direct to the Register of Deeds of verify status of my property, it found that it is still in my name. My questions are, has PNB a right to sell my property without the proper consolidation of title? What will be my options? Thank you.

  • James T.

    Contact me: 09165660020 and I’ll give you some legal advice.

  • lloyd c timpac

    Our property was extra-judicially foreclosed under act 3135 until a writ of possession was issued to us. It was only then that we found out that the mortgagor does not have the authority to foreclose our property under such act because we never gave her the authority. But she went ahead and falsified the Real Estate Mortgage contract by inserting the phrase “judicially or Extra-judicially under act 3135″ She used this falsified mortgage contract to foreclose our property. What’s the best thing to do?

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