The Recto and Maceda Law

The Recto and Maceda Law (RA6552) in
the Philippines
The Recto Law, which forms part of the Civil Code, covers installment sales of
personal property while the Maceda Law governs installment sales of real property.
The Recto Law
The Recto Law comprises Articles 1484 to 1486 of the Civil Code. It was added to the
Civil Code to prevent abuses in the foreclosure of chattel mortgages, such as when
mortgagee-creditors foreclosed mortgaged property, bought them at a low price (on
purpose,) then prosecuted the mortgagor-debtors to recover the deficiencies.
In the event a buyer of personal property defaults by failing to pay two or more of
the agreed installments, the seller can do any of the following:
1.
Demand that the buyer pay (a.k.a. specific performance)
2.
Cancel or rescind the sale
3.
Foreclose the mortgage on the property bought (if there ever was a chattel mortgage)
Regarding no. 3, this happens when a person takes a loan to buy something and he
mortgages the thing he bought to ensure the creditor that he will pay the loan.
Remember: If you choose one remedy, you cant choose the others. These
remedies, believe it or not, are also available to the buyer. You also cant use all or
any of them at the same time. The Recto Law also wont apply to a straight sale (i.e.
a sale where there is a down payment and the balance is payable in the future in a
single payment only.) The seller can also assign his credit to another person, making
that person the new creditor.
If the buyer refuses to surrender the items to the seller, he becomes a perverse
buyer-mortgagor. When that happens, the seller can recover expenses and
attorneys fees.
The Recto Law also covers leases with the option to purchase.
The Maceda Law, Ra 6552
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 RA 6552 follows.
The Maceda Law, RA 6552, is the real estate equivalent of the Recto Law. Like the
Recto Law, it also covers financing of sales of real property (which is why mortgages
also come in.) It doesnt apply,however, to the following sales:
1.
Industrial lots
2.
Commercial buildings and lots
3.
Lands under the CARP Law
MACEDA LAW (RA6552) Maceda Law in the Philippines applies to the purchaser of
real property by installment payments when the purchase becomes cancelled by a
delinquency in payment. It provides the buyer with a right to a refund as a requisite
for cancellation of contract due to delinquency when the buyer has paid at least two
years. The refund is 50% of total payments; additional 5% per year after 5th year.
To qualify for the Maceda Law, the buyer must have already paid at least 2 years of
installment payments.
1.
The buyer has the right to continue the unpaid installments due without additional
interest provided that the buyer must pay within the grace period. The grace period provided
is one month for every one year of installments paid.
2.
The buyer has the right to opt for a refund of the installment payments being made (This
includes the down payments, deposits or options on the contract). The buyer is entitled to
50% refund from his total payments made. An additional of 5% refund per year for every 5
years.
If the buyer has paid less than two years installment:

The buyer has the right to continue his payments within a grace period of 60 days.
FULL TEXT OF MACEDA LAW:
REPUBLIC ACT NO. 6552REALTY INSTALLMENT BUYER PROTECTION ACTAN 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.
Section 2. It is hereby declared a public policy to protect buyers of real estate on
installment payments against onerous and oppressive conditions.
Section 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.
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 thirty days from receipt by the buyer of the
notice of cancellation or the demand for rescission of the contract by a notarial act.
Section 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.
Section 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.
Section 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.
Section 8. If any provision of this Act is held invalid or unconstitutional, no other

provision shall be affected thereby.
Section 9. This Act shall take effect upon its approval.
Maceda Law in the Phillippines applies to the purchaser of real property by

installment payments
when the purchase becomes cancelled by a delinquency in payment. It provides the
buyer with a
right to a refund as a requisite for cancellation of contract due to delinquency when
the buyer has
paid at least two years. The refund is 50% of total payments; additional 5% per year
after 5th year.
Read more: http://wiki.answers.com/Q/What_is_maceda_law#ixzz22uPwRAlk
RIGHTS OF SUBDIVISION LOT BUYER (MACEDA LAW - R.A. 6552)
1. When buyer has paid at least two years of installment:
2. To pay, without additional interest, any installment due within the grace period
(which is equivalent
to one month for every year of payment.)
3. To receive a 30-day notarial notice of cancellation before his contract can be
canceled for nonpayment of amortization.
4. To receive the cash surrender value of his total payments before his contract
can be canceled for
non-payment of amortization. The cash surrender value is equivalent to 50% of
total payments and,
after the fifth year, an equivalent 5% per year but not to exceed 90% of the total
payments.
5. To transfer of assign his right to the contract.
6. To register or annotate his contract on the title.
7. To pay in advance the remaining balance before the term of the contract.
8. When buyer has paid less than two years of installment:
a. To pay, without additional interest, any installment due within the grace period
of 60 days.
b. To receive a 30-day notarial notice of cancellation before his contract can be
cancelled for nonpayment of amortization.
9. To transfer or assign his right to the contract.
10. To register or annotate his contract on the title.
Read more:
http://www.sulit.com.ph/index.php/view+topic/id/15916/Rights+of+Subdivision+Lot
+Buyer+under+Mace
da+Law
Philippine Real Estate Laws Ownership, Practice, Taxes
FUNDAMENTALS OF PROPERTY OWNERSHIP, REAL ESTATE PRACTICE & TAXES
Real Estate Ownership
CONCEPT OF OWNERSHIP
Ownership is the independent right of a person to the exclusive enjoyment and
control of a property including its
disposition and recovery subject only to the restrictions established by law and rights
of others.
RIGHTS INCLUDED IN OWNERSHIP
Fee simple consists of the so called "bundle of rights" which are inherent in or
appurtenant to ownership, without any limitations or restrictions other than those
imposed by law or contract. The bundle of rights include the following: 1) Right to
possess 2)Right to use and enjoy 3) Right to the fruits 4) Right to dispose 5) Right to
vindicate or recover
LIMITATIONS ON RIGHT OF OWNERSHIP

1) Those imposed in general by the State in the exercise of the power of taxation,
police power, and power of eminent
domain.
2) Those imposed by law such as legal easement, requirement of legitimate
succession, zoning, building code, rent
control, urban and agrarian reform, subdivision regulations, escheat.
3) Those imposed by the grantor of the property on the grantee by contract, such as
donation, last will, or usufruct.
4) Those imposed by the owner himself, such as voluntary easement, lease,
mortgage.
SURFACE, SUBSURFACE AND AIR RIGHT
Land, in its legal signification, extends from the surface downwards to the center of
the earth and extends upwards
indefinitely to the skies. The surface and subsurface of rights of an owner entitle him
to construct thereon any works or
make any plantations and excavations without detriment to servitudes and special
laws. Air right is the right of an owner to
use and control the air space over his land subject to the requirements of aerial
navigation, laws, or contract.
RIGHT TO HIDDEN TREASURE
Hidden treasure belongs to the owner of the land, building, other property on which
it is found. When the discovery is
made on the property of another, or of the State or any of its subdivisions, and by
chance, one-half of the treasure shall be
allowed to the finder. If the finder is a trespasser, he shall not be entitled to any
share of the treasure. If the things found
be of interest to science or arts, the State may acquire them at their just price, which
shall be divided in conformity with the
rule above stated. Hidden treasure, for legal purpose, is understood to be any hidden
unknown deposit of money, jewelry,
or other precious objects, the lawful ownership of which does not appear.
RIGHTS OF ACCESSION
1) In General - The ownership of property gives the right by accession to
everything which is produced thereby, or
which is incorporated or attached thereto, whether naturally or artificially.
2) With Respect to Produce of Property - To the Owner belongs the:
a) Natural fruits - the spontaneous product of the soil
b) Industrial fruits - those produced by land cultivation or labor
c) Civil fruits - the rental income of buildings and /or lands
3) With Respect to Immovable Property:
a) The owner of the land on which anything has been built, sown or planted in
good faith shall have the right:
aa) To appropriate as his own the works, sowing or planting after payment of
indemnity provided by law, or
bb) To oblige the builder or planter to pay the price of the land. However, the
builder of planter cannot be obliged to
pay for the land if its value is considerably more than that of the building or planting.
In such case, he shall pay reasonable
rent if the owner does not choose to appropriate the building after proper indemnity.
The parties shall agree on the terms
of the lease and in case of disagreement, the court shall fix the terms thereof.
b) The owner of the land on which anything has been built, planted or sown
In bad faith may:
aa) Demand the demolition of the work or removal of the planting or sowing
at the expense of the builder or planter,
or
bb) compel the builder or planter to pay the price of the land and the sower,
the proper rent. The landowner is also
entitled to damages from the builder planter or sower.
cc) To the owners of land adjoining the banks of rivers belong the accretion
which they gradually receive from the
effects of the current of the water.
dd) Whenever a river, changing its course by natural causes, opens a new bed
through a private estate, the new
bed shall become a public dominion.
Modes of acquiring title
Private Grant - voluntary transfer or conveyance of private property by a private
owner, such as sale or donation.
Public Grant - acquisition of alienable lands of the public domain by homestead
patent, free patent, sales patent, or other
government awards.
Involuntary Grant - acquisition of private party against the consent of the former
owners, such as foreclosure sale,
execution sale, or tax sale
Inheritance - acquisition of private property through hereditary succession
Reclamation - filling of submerged land, subject to existing laws and government
regulations.
Accretion - acquisition of more lands adjoining the banks of rivers due to the gradual
deposit of soil as a result of the river
current
Prescription - acquisition of title by actual, open, continuous, and uninterrupted
possession in the concept of owner for the
period required by law
RIGHT TO OWN
1. General Rule - Only Filipino citizens and corporations at least 60% capital of
which is owned by Filipinos are entitled
to acquire and own land in the Philippines.
2. Exceptions to the General Rule - Alien acquisition of real estate in the
Philippines is allowed in the following cases:
a) Acquisition before the 1935 Constitution.
b) Acquisition thru hereditary succession if the acquiree is a legal heir.
c) Purchase of not more than 40% interest in a condominium project
d) Purchase by former natural born Filipino citizens subject to limitations
prescribed by B.P. 185 and R.A. 8179
3. A Filipina who marries an alien retains here Philippine citizenship (unless the law
of her husband's country makes her
assume the citizenship of her husband because of such marriage) and can therefore
acquire real estate in the Philippines.
ACQUISITION BY FORMER NATURAL BORN FILIPINO CITIZENS
1. Mode of acquisition is not limited to voluntary deeds (such as sale or donation)
but includes involuntary deeds (such
as foreclosure, execution or tax delinquency sale)
2. Maximum area that may be acquired:
a) For residential purpose - 1,000 square meters of urban or one hectare of rural
land.
b) For business purpose - 5,000 square meters of urban land or 3 hectares of
rural land.
Business purpose refers to the use of land primarily, directly, and actually in the
conduct of business or commercial
activities in the broad areas of agriculture, industry, and services, including the lease
of the land but excluding the buying
or selling thereof.
In case of married couple where both spouses are former natural born Filipino
citizens, both of them may avail of the right
provided that the total acquisition shall not exceed the maximum area allowed.
A transferee who acquired urban or rural land for residential purpose while still a
Filipino citizen may acquire additional
urban or rural land for residential purpose which, when added to that already owned
by him, shall not exceed the
maximum area allowed by law.
Rule in case of double sale: The priority of rights in case of double sale of titled
property shall be governed by the following
rules:
1. The buyer who acquired in good faith and was the first to register the sale shall
have a better right.
2.If none of the buyers registered the sale, the buyer who acquired to good faith
and was the first one in possession
shall have a better right.
3. If none of the buyers registered the sale or took possession, then the buyer who
acquired in good faith and has the
oldest title shall have a better right
Contract of Sale and Contract to Sell
1. Distinction: In a contract of sale, there is already a transfer or ownership. In a
contract to sell, there is no transfer of
ownership yet but merely a mutual promise to buy and sell
Criterion: The test to determine whether a contract is a contract of sale or a contract
to sell is not the manner of payment whether cash or installment, but whether or not there is conveyance of ownership in
the dispositive or grant clause of the
deed. There is transfer of ownership when the dispositive clause states that the
vendor "hereby sells, transfers and
conveys unto the vendee in a manner absolute and irrevocable x x x"
Rights of buyer who has paid two years or more of installments:
1. To pay, without additional interest, any installment due within the grace period
which is equivalent to one month for
every year of installment payment, provided that such right can only be availed of
once every five years.
2.To receive a thirty-day notarial notice of cancellation before his contract can be
cancelled for delinquency
Rights of buyer who has paid less than 2 years of installment
1. The grace period to pay without additional interest due is fixed as 60 days
2. For cancellation of contract due to delinquency, the buyer is only entitled to
receive a 30-day notarial notice of
cancellation without right to receive the cash surrender value pf his payments
Right to refund under P.D. 957 & Maceda Law
Presidential Decree 957: Right to refund applies when the developer fails to
complete the development within the required
period. Refund is 100% of total payments
Maceda Law: Right to refund applies as a requisite for cancellation of contract due to
delinquency when the buyer has
paid at least 2 years. Refund is 50% of total payments; additional 5% per year after
the 5th year.
MACEDA LAW (R.A. 6552) When the buyer is delinquent in his payment
Objective: To protect installment buyers of real estate against onerous and
oppressive conditions.
Applicability - Applies to sale or financing of residential estate on installment
payment covered by contract to sell and not sale with mortgage, but excluding
industrial lots, commercial building, and sales to tenants under R.A. 3844. Rights of
buyer who has paid two years or more of installments:
a) To pay, without additional interest, any installment due within the grace period
which is equivalent to one month for every year of installment, provided that such
right can only be availed of once every five years.
b) To receive a thirty-day notarial notice of cancellation before his contract can be
cancelled for delinquency.
c) To receive the cash surrender value of his total payments before his contract can
be cancelled due to delinquency. The refund is equivalent to fifty percent of total
payments and, after the fifth year, an additional five percent per year of installment
payment, but not to exceed ninety percent of total payments.
d) To transfer or assign his right to the contract
e) To register or annotate his contract on the title
f) To pay, without additional interest, the full principal balance of the price before the
term of the contract.
Rights of buyer who has paid less than two years of installment - The buyer has
practically the same rights as a buyer who has paid two years or more of
instalmments, except for the following differences:
a) The grace period to pay without additional interest on any installment due is
fixed at sixty days
b) For cancellation of contract due to delinquency, the buyer is only entitled to
receive a thirty-day notarial notice of cancellation but without right to receive the
cash surrender value of his payments.
FOREIGN OWNERSHIP OF CONDOMINIUM UNIT
In the condominium concept of ownership, absolute ownership by a foreigner is
allowed not to exceed forty percent interest in the project. The unit owner is the
absolute owner of the space within the interior surface of his unit, but is only a coowner of the exterior facade of the unit.
RIGHTS OF A CONDOMINIUM UNIT OWNER
Absolute ownership of his unit
Co-ownership of land and common areas
Exclusive easement of the space of his unit

Non-exclusive easement to common areas for ingress or egress
Right to sell, lease, or mortgage his unit
Right to repair, paint, decorate the interior surface of his unit
Right to participate and vote in condominium corporation meetings
OBLIGATIONS OF A CONDOMINIUM UNIT OWNER
Pay the realty tax on his unit
Pay the insurance on his unit
Pay the shared monthly dues for maintenance of common areas/amenities/garbage
disposal
Comply with use restrictions
P.D. 957 When the developer fails to complete the development within the required
period
The refund is 100% of total payments less penalty interest plus legal interest of
money
REAL ESTATE PRACTICE & REAL ESTATE TAXES
Capital Gains Tax - Income tax payable to the BIR for the sale, transfer, or other
disposition of real estate classified as capital asset.
Transfer Tax - A tax payable to the local government unit for sale, transfer or other
disposition of real estate, whether capital or ordinary asset
Withholding Tax - A tax payable to the BIR on the sale, transfer or other disposition of
real estate classified as ordinary asset.
Cost approach - a method of estimating the fair market value of an improvement by
estimating present reproduction cost and deducting depreciation.
Economic life - The period during which a property can be profitably used or
expected to generate more income than expenses.
Principle of diminishing returns - States that the application of more factors of

production will tend to increase net income up to a certain point, beyond which the
introduction of more factors of production will tend to decrease net income.
Principle of Progression - An appraisal principle which holds that the value of a
property tends to be enhanced by association with superior properties
Principle of Regression - An appraisal principle which holds that the value of a
property tends to be adversely affected by association with inferior properties.
Principle of Substitution - an appraisal principle which holds that the value of a
replaceable property is inferred from the value of an equally desirable substitute
property.
Presentation: concept - It is an orderly written or oral explanation of facts and figures
that make a given property attractive to a prospect. Scope of coverage:
1. Property Identification - location, block number, lot number, lot area and
dimensions, floor area, type of property, terrain, view, description of improvements,
zoning classifications, facilities and amenities, titled
or to be titled, price, terms, discounts, financing.
2. Advantages and benefits - quality of neighborhood, availability of public
transportation, proximity to public marker / schools / hospitals, reasonableness of
price.
3. For income properties - present potential income, return of investment. 4. Lot and
vicinity plan, subdivision map, and pictures of the property
Demonstration: concept - It is the process of showing the property and pointing out
its physical qualities and other advantages and benefits to arouse the desire to own
it. Preparing for demonstration:
Preparation of checklist of physical attributes and other data which may be the
object of prospect's inquiry. Update availability with the developer.
Organization of selling points to be emphasized
Anticipation of possible objections
Appointment with prospect and notice to owner
Selection of ideal route to create a favorable impression of the neighborhood
Negotiation: concept - It is the process of reconciling the opposing views of the
parties to a transaction as to price and terms. Items which should be covered in
negotiation:
Price and terms and discounts
Expenses for execution and registration of sale

Date for delivery of property
Items included or excluded in a sale
Manner of payment & financing
Update Payment of Electricity, Water, Telephone
Update Payment of Realty Tax
Penalties or Forfeiture in case non-compliance
Who is going to process the documents and deadline
Appointments for Earnest money, or sales contract or deed f sale Common
difficulties
Silent objection - hesitancy of the prospect to express his objection thereby
depriving the broker of the
opportunity to answer or overcome it
Presence of supposed advisers of the prospect who give negative remarks which
tend to undermine the
transaction
Failure or inability to analyze prospects real need and affordability
Promise of a prospect to call the broker which is almost always broken
Waiting advice from spouse or relative who were not present during the tripping
Broker's failure to identify time wasters such as window shoppers or speculators
Closing
Persuading the prospect to visit the developer's office to be able to hold the
property with a reservation fee
Securing papers/documents from developers such as copy of title, lot plan, deed
of restrictions, copies of
reservation agreement, deed of restrictions, contract to sell, deed of sale
Securing papers/documents from prospects such as copy of income tax returns,
bank statements, certificate of employment, copy of passport, TIN, residence
certificate etc
Arrangement of appointment between parties for contract signing and payment

Non-forfeiture of Payments. No installment payment of the buyer May be forfeited by
the developer when the buyer who is not delinquent, and after due notice, desists
from further payment due to failure of the developer to complete within the required
period. The buyer may at his own option, be reimbursed with total amount paid
including amortization interest, with interest thereon at legal rate.
Mortgage of Project - No mortgage of any lot by the project owner/developer without
permit to mortgage from HLURB. Permit to mortgage may be granted upon
submission of proof that the loan proceeds will be used for development and verified
undertaking by the mortgagee to release from the mortgage any lot/unit whose loan
value has been paid. In case a mortgage was executed by owner/developer pursuant
to HLURB permit to mortgage, the buyer may at his own option, pay his installment
directly to the mortgagee.
Alteration of Plans - any alteration in the approved plans relating to open spaces,
facilities and other forms of development require prior approval from HLURB (now
LGU) and written consent of Homeowners Asscociation
Advantages of condominium Concept
Enhance affordability by fractionalizing cost of land & building
Facilities utilities, amenities and services will cost less to build and maintain
Economy in land space. Families holding title contiguous lands of say 40 or 50 square
meters by obtaining adequate housing by consolidating their lots and constructing a
condominium project
Enhances marketability because foreigners can buy
Multiples saleable or rentable floor areas by as many storeys put upEliminates the
routinary chores of daily maintenance, security, and garbage collection associated
with single-detached dwellings
Rights of unit owner
1.Absolute ownership of his unit.
2.Co-ownership of land and common areas.
3.Exclusive easement of the space of his unit.
4.Non-exclusive easement to common areas for ingress or egress.
5.Right to sell, lease, or mortgage his unit.

6.Right to repair, paint, decorate the interior surface of his unit.
7.Right to participate and vote in condominium corporation meetings.
Obligations of condominium unit owner
1.Pay the realty tax on his unit.
2.Share the realty tax on the land and common areas.
3.Pay the insurance on his unit.
4.Share the insurance on the common areas.
5.Comply with use restrictions.
6.Pay dues and assessments.
7. Give other unit owners the priority right to buy his unit (right of first refusal). If so
required by the master deed.
Dues and Assessments
1.The Deed of Restriction usually provides for two kinds of assessments:
a.) Regular assessment - a monthly obligation to fund ordinary project expenses,
such as security, garbage collection, repair and maintenance of the common areas,
electricity and water bills on the common areas and realty tax and insurance on the
common areas.
b.) Special assessment - this is imposed as the need arises, such as the need for
replacement of the generator.
Extent of interest in common areas
In the absence of any provision in the master deed, all unit owners shall have equal
share in the common areas. If the intent is to pro-rate the unit owners' interest on
the common areas, such fact must be expressly provided in the master deed. The
interest based on floor area of ownership is arrived at by dividing the unit area by
the total floor area of all condominium units.
Condominium Corporation
Optional and Mandatory Requirement. The condominium corporation is optional if no

unit will be sold in foreigners.
However, the corporation is mandatory if some units, not exceeding forty percent
interest in the project, will be sold to foreigners, in which case title to the land will be
transferred in the name of the condominium corporation and thus comply with the
constitutional mandate that corporations may acquire real estate provided that at
least sixty percent of its capital or membership is Filipino
1.Principal Purposes: a) To hold title to the land and b) To set as the management
body of the condominium project.
2.Conflict with Master Deed. In case of conflict between the articles of incorporation
of the condominium corporation and the master deed of the condominium project,
the latter should always prevail because:
a) It is the matter deed which gives birth in the condominium project. The project
cannot exist without a master deed, but it can exist without a condominium
corporation.
The condominium law specifically provides that the articles of incorporation and bylaws of the condominium corporation shall not conflict with the master deed.
REAL ESTATE TAXATION
Rate of Real Estate Tax
a) In Provinces - not exceeding one percent of assessed value.
b In Cities and Metro Manila Municipalities - not exceeding two percent of assessed
value.
Special Education Fund Tax - an annual levy on real estate equivalent to one percent
of assessed value which shall be in addition to the basic real estate tax
Date of Payment of basic realty tax and SEF tax:
a)May be paid in four equal quarterly installments on or before March 31, June 30,
September 30, and December 31.
Payment in advance of the schedule is entitled to not more than twenty percent
discount.
Delinquent payment shall be subject to interest of two percent per month but in no
case to exceed thirty six months
CAPITAL GAINS TAX

Rate and Basis Tax - the rate of capital gains tax is six percent computed on the
following basis:
a) Sale of Lot: - Basis is price per deed of sale or lot zonal value, whichever is higher.
b) Sale is Lot with improvement: - Basis is price per deed of sale, or lot zonal value
plus improvement value, whichever is higher.
Conditions for exemption from Capital Gains Tax:
a) The seller is a natural person and the capital asset sold is his principal residence
(family home).
b) The proceeds of the sale will be used to acquire / purchase construct a new family
home.
c) The BIR is duly notified by the taxpayer within thirty days from the date of sale
through a prescribed return, of his intention to avail of the tax exemption.
d) The tax exemption can only be availed of once every ten years.
If there is no full utilization for the proceeds of the sale, the portion of the gain
presumed to have been realized from the sales shall be subject to capital gains tax
Installment Sale - A sale is considered on installment basis when the initial payment
in the year of sale is twenty-five percent or less, in which case the transferor may opt
to pay initially a portion of the tax in accordance with the following formula:
Initial Tax = Initial Payment x Total Tax
Total Price
WITHHOLDING TAX
Transactions Subject to Withholding Tax - Sale, exchange, or transfer of ordinary
asset by natural persons, corporations, estate or trust.
Rates and Basis - Computed on the same basis as capital gains tax, the rates of
creditable withholding tax.
Rate of Withholding Tax
0% - When the property sold is part of an HLURB registered socialized housing
project of the seller
1.5% - When the seller is habitually engaged in real estate business and the price
does not exceed P500,000.00
3.0% - When the seller is habitually engaged in real estate business and the price is
over P500,000.00
5.0% - When the seller is habitually engaged in real estate business and the price
exceeds P 2 million.
6.0% - When the seller is not habitually engaged in real estate business.
TRANSFER TAX
1.Concept - A tax payable to the local government (City or Provincial Treasurer) for
the sale or other disposition of real estate, regardless of classification of the property.
2.The rate is not more than one percent for properties located in cities and
municipalities in Metro Manila, and not more than one-half percent for properties
outside of Metro Manila.
3.Basis is the contract price or market value per tax declaration whichever is higher.
However, the local government may enact an ordinance prescribing as basis the
contract price or zonal value, whichever is higher.
DOCUMENTARY STAMPS
1.On Sales - P15.00 per P1,000.00 or a major fraction thereof, computed on the
same basis as capital gains tax, and payable within five days following the month
when the document was notarized.
2.On Mortgages - P20.00 for first P5,000.00 and P10.00 per P5,000.00 after the first
P5,000.00
On leases - P3.00 for first P2,000.00 or fraction thereof, and additional P1.00 for
every P1,000.00 or fraction thereof in excess of the first P2,000.00 for each year of
the term of the lease
SALIENT FEATURES OF E-VAT RELATING TO REAL ESTATE Concept : Expand Value
Added Tax is an indirect tax. It can be passed on to the buyer. However, it is should
be inputed or built-in the price. The sales contract cannot stipulate the "E-VAT shall
be for the account of the buyer."
Transactions subject to E-VAT
1.Sale, barter or exchange or real estate held primarily for sale to customers in the
ordinary course of trade or business where the annual gross sales or invoice exceed
P750,000.00, except sale by real estate dealers and/or lessors of house and lot and
other residential dwellings price P1.5 Million and below.
2.Lease of real estate for commercial use when the annual gross receipts exceed
P750,000.00
3.Lease of real estate for residential use when the monthly rental per unit exceeds
P10,000,000 and the annual gross receipts exceed P750,000.00
Liability as non-VAT taxpayer
1.In cases where the real estate dealer or lessor is not subject to E-VAT, he shall be
liable as a non-VAT taxpayer subject to three percent tax. However, he has the option
to register as VAT taxpayer subject to 10% VAT with the benefit of input tax.
Commissions of real estate brokers are subject to E-VAT if the annual gross receipts
exceed P550,000.00, otherwise they shall be subject to seven percent tax.
Real estate dealers are not allowed to withhold the E-VAT from commissions of real
estate brokers
Computations of E-VAT payable
1.E-VAT payable = output tax (sales receipts x 1/11) less input tax (purchase receipts
x 1/11)
Credit for input tax can only be availed of if the payee is VAT-registered.
Basis of E-VAT
1.Cash/Deferred payment plan - Basis is the contract price or zonal value whichever
is higher. In the absence of zonal value, basis shall be market value per tax
declaration or contract price, whichever is higher.
Installment Plan - Basis is actual consideration received, including interests and other
charges. However, upon full payment, if the zonal value is higher than the total
receipts / collection, the additional E-VAT shall be paid accordingly. Expenses for
execution and registration of sale In the absence of any stipulation to the contrary,
the seller shall pay for the execution and registration of the sale.
Welcome! I'm Giancarlo Enrico S. Pozon, a Wushu instructor, investor and Law
Student... That's right, Law Student. I created this blog to make Philippine Law
easy to understand for the average person. It's all about free legal advice. There
are many law blogs. But the problem is that many of them are written for lawyers
and law students. They use words that can't be understood by ordinary people.
Many lawyers, judges and law students consider themselves as superior to most
human beings because of their knowledge of the law. It bothers me since the law
is supposed to serve society. Since the law is meant to serve society as a whole,
it is important that is must be understood by everybody. This does not mean that
we should all become lawyers. It means that although law is a highly specialized
profession, the first duty of everybody in this profession is to make the law
understandable to all; that's why all these articles are free legal advice. Like I
said, this blog is about law -but it's for the ordinary people, not the lawyers. It's
for the ordinary folk so they will know what is good and bad for them, and that
making them aware of the law will help us all improve society as a whole. This is
free legal advice for everybody!
The Recto and Maceda Laws

Tuesday, September 28, 2010
in Civil, Commercial, Law
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These two laws are relevant and are very often the issue of many court cases.
Both laws govern the sale of property by installments. The Recto Law, which
forms part of the Civil Code, covers installment sales of personal property while
the Maceda Law governs installment sales of real property.
The Recto Law
The Recto Law comprises Articles 1484 to 1486 of the Civil Code. It was added to
the Civil Code to prevent abuses in the foreclosure of chattel mortgages, such as
when mortgagee-creditors foreclosed mortgaged property, bought them at a low
price (on purpose,) then prosecuted the mortgagor-debtors to recover the
deficiencies.
In the event a buyer of personal property defaults by failing to pay two or more
of the agreed instalments, the seller can do any of the following:
1.) Demand that the buyer pay (a.k.a. specific performance)
2.) Cancel or rescind the sale
3.) Foreclose the mortgage on the property bought (if there ever was a chattel
mortgage)
Regarding no. 3, this happens when a person takes a loan to buy something and
he mortgages the thing he bought to ensure the creditor that he will pay the
loan. Remember: If you choose one remedy, you can't choose the others. These
remedies, believe it or not, are also available to the buyer. You also can't use all
or any of them at the same time. The Recto Law also won't apply to a straight
sale (i.e. a sale where there is a down payment and the balance is payable in the
future in a single payment only.) The seller can also assign his credit to another
person, making that person the new creditor.
If the buyer refuses to surrender the items to the seller, he becomes a perverse
buyer-mortgagor. When that happens, the seller can recover expenses and
attorney's fees.
The Recto Law also covers leases with the option to purchase.
The Maceda Law
The Maceda Law, RA 6552, is the real estate equivalent of the Recto Law. Like
the Recto Law, it also covers financing of sales of real property (which is why
mortgages also come in.) It doesn't apply, however, to the following sales:
1.) Industrial lots
2.) Commercial buildings and lots
3.) Lands under the CARP Law
Depending on when the buyer defaults, there are two (2) possible scenarios: if
the buyer paid at least two (2) years' instalments and if the buyer paid less than
2 years' instalments.
If the buyer paid less than 2 years' instalments and defaults, he is given a grace
period of sixty (60) days starting from the date of his last instalment to resume
paying. This period can be increased by the seller. If after the grace period the
buyer still can't pay, the seller must make a notarial demand to cancel the sale.
The cancellation becomes effective thirty (30) days after the buyer was notified.
So it's possible that the buyer could be notified two months after the 60-day
period and then the 30-day period will begin.
If the buyer paid at least two years' instalments, the buyer can pay the unpaid
balance without interest. The grace period is computed at one (1) month per
year of instalment payments. It also begins from the time the buyer paid his last
instalment. The grace period can be used only once every five (5) years of the
sales contract's life -including its extensions. So it's possible to have a grace
period of a year if the buyer had been paying his instalments faithfully for 12
years. Once the buyer chooses to use the grace period, he can't get it again until
another five years are over.
If the seller wants to cancel the sale, he has to refund the buyer of 50% of the
actual payments. If the buyer paid more than five years' instalments another 5%
for every year is to be added to the refund, but only up to 90% of the total
payments made. The payments mentioned here include the down payment,
options and deposits. The refund is made in this way: if the buyer paid more 2 to
5 years' instalments, he can get back 50% of the cash surrender value. If he paid
for more than 5 years, he can get the 50% plus 5% per year up to 90%.
The buyer is also allowed to make advanced payments, or even the full price,
without interest. He can also assign his rights to another person, making that
person the new buyer, but he can only do that with a notarial deed of sale
assignment.
The Maceda Law cannot be used by a real estate developer (see here.) It also
cannot be used by the highest bidder in foreclosure proceedings.
Copyright by Enrico. Follow me on facebook. Posted at at 11:43 PM
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113 comments:
ForexKiller said...
Thanks for your insightful post. On a point of clarification. You state that the law
excludes commercial buildings AND lots but RA 6552 only indicates that
commercial buildings are not covered. It does not explicitly state that commercial
lots are not covered.
Am I therefore correct in inferring that commercial lots ARE in fact covered by RA
6552?
Just a little confused. Thanks for your help.
Steve
December 24, 2010 at 4:53 PM
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src="http://3.bp.blogspot.com/_z1RYiUf1scs/TD5YP_NvEcI/AAAAAAAAAA0/qaqZV
9S7HX0/S45-s35/Enrico4.jpg" width="35" height="35" class="photo" alt="">
Enrico said...
Hi Steve, thanks for your comment. Real property, under the Civil Code, refers to
the land as well as the permanent structures built on it. Therefore, the sale of a
building normally includes the lot it is built on. The exception is if the sales
contract specifically stated that only the building is for sale. That's why there are
some pretty funny scenarios that actually can come up, such as the building
being owned by one person and the lot by another. RA 6552 is a law that governs
the process of the sale of real property, it's not the law on real property itself.
The general law for real property is the Civil Code. The exceptions are found in
different laws (CARP, etc.)
January 6, 2011 at 12:15 PM
ForexKiller said...
Hi Enrico - Thanks for your response. I take your point that a commercial building
must obviously be built on a commercial lot but, as in my case, a residential
building can also be built on a commercial lot.
Since RA6552 specifically states 'commercial building' and not lot my question
still remains. Is it the commercial building that is not included or the commercial
lot?
I'm not sure if I've explained that properly.
Steve
PS: It's actually section 6 I'm concerned about. My developer is refusing to
accept full payment of the principal and is instead insisting that I also pay
projected interest for the next five years. This seems to be not only ridiculous but
also contrary to section 6.
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Enrico said...
Hi Steve,
So your building is a residential one on a commercial lot? Yes, that's also
possible. But that kind of scenario can lead to complications. One such problem
is the dispute between tax law and property law on the treatment of a building
built on a type of lot. Under tax law, a building built on a commercial lot is
considered commercial for tax purposes regardless of whether it's a commercial
building or not. Property law treats it differently. I'll ask my teacher in property
law about how your building should be treated.
If ever you do decide to buy another lot in the future, however, my advice is that
you have the lot reclassified before you develop it so you can avoid any
complications.
Regarding Sec. 6, you are perfectly within your rights because under the basic
doctrine on contracts, contracts are the law of both parties unless they contain
provisions that are contrary to law.
Hope this helps for now.
Enrico
January 11, 2011 at 4:29 AM
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Enrico said...
Hi Steve,
My teacher says that your lot should be treated as residential for non-tax
purposes. For tax purposes, however, it's still commercial. He also said you might
want to put up a small store in the building so that you can avoid paying the 6%
Capital Asset Tax and the 1% Documentary Stamp Tax. The problem kasi is the
BIR will be looking at the market value of the land and will base their assessment
on either the market value or the gross selling price, whichever is higher.
Enrico
ForexKiller said...
Hi Enrico - Thanks for the response and for taking the time to talk to your
teacher.
Regards
Steve
January 16, 2011 at 11:30 AM
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Enrico said...
You're welcome, Steve.
Fred said...
Hi Enrico,
Very insightful this blog to me. Reading from your post under buyer paid less
than 2 years' installment and default. To me, it is more of a seller's right than the
buyer's right. What are the rights of the buyers if he paid less than 2 years?
Fred
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Enrico said...
Hi Fred,
It's already there; and yes the provisions appear to sound like seller's rights.
They're actually more of a requirement for the seller. You see, if the buyer
defaults in his payments the law won't allow the seller to cancel the contract
outright.
The grace period serves the buyer. It allows him to make good on his payments
for a total of 90 days (if he paid less than 2 year's worth of installments
-remember the 60 and 30 day periods.)
So the right can be read out like this: if you can't pay, you have the right to be
given time to pay. The seller can't kick you out until he has exhausted all
remedies available to him. Some rights, kasi, are inferred from statements in law.
A common example is that in tax law, what is not covered is not taxed -so don't
be fooled by the taxman when he comes to make an assessment.
There's a rule in law we refer to as the Exhaustion of Remedies rule. It states that
before somebody can go to court, he has to exhaust all remedies available to
him (settlement, grace period, etc.) otherwise his case will be dismissed outright.
Enrico
February 1, 2011 at 11:17 PM
Fred said...
Hi Enrico, thank you for your response. Would it be possible for you to cite other
examples or scenario where the rights of the buyer had been violated and that
seller's right in so far and the maceda law is concern does not apply. I raise this
because certain sellers/developers also use maceda law as their rights, for
example, they are going to cancel the 'contract to sell' for those payments of
less than 2 years.
There is an existing case I know that because of the impending housing loan
application with the bank (where the seller/developer itself made an application
on behalf of the buyer) but because the bank insist of a stricter requirements,
the application could not be approved. And such application is taking time. Then
the seller/developer is demanding payment from the buyer when in the first
place no loan application has yet been approved. They sent letters with the 30
day notice and said they are going to cancel the contract and forfeit the
downpayment considering the buyer made only payment of less than 2 years in
accordance with the Maceda law.
Thanking you in advance for this.
Fred
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Enrico said...
Hi Fred,
Sorry for the late reply. Just finished our delayed midterms.
Regarding the example you mentioned about the developer asking for payment
when the bank hasn't approved a loan yet, that's an example of an onerous and
oppressive condition in the Lagandaon case. They can't demand payment until
the loan has been released because contracts with illegal provisions (such as
what you mentioned) are not binding.
There's another case, if you'd like; Active Realty & Development Corp. vs Daroya,
GR 141205, May 9, 2002. This case goes into deeper explanation about the
"onerous and oppressive conditions" mentioned in the Lagandaon Case. I've just
posted it right. Although the case doesn't mention any specific practices, it uses
the catch-all term in Civil Law known as "Contracts of Adhesion." Contracts of
adhesion are strictly interpreted against the person who draws them up. They
have a duty to inform the signer completely. Then, they have to fulfill their part
of the contract. If not, they can be held liable. Hope this helps.
Enrico
sollixua88 said...
I am a relatively new seller. I want to offer installment payments for what I sell.
Should I return the full amount they paid should they cancel their purchase(s)?
The stuff I sell are of high value and mobile (can be moved from place to place).
February 17, 2011 at 1:59 AM
alejo said...
hi atty enrico,
please enlighten me about this law...does the 'maceda law' covered the fully paid
equity?if i want to cancel the contract due to its been 3 years i fully paid the
equity and the purchase house and lot is not yet built.what action should i make
to get may money back?atty. many of my fellow workers are not aware of this
law..
sincerely
alejo
February 20, 2011 at 12:14 AM
lyra said...
HELLO ATTY ENRICO,
I would like to inquire about my lot which i purchased 3 years ago. for 2 years I
was able to pay on time for my monthly amortization due to some financial
problems in the 3rd year I was not able to pay my due. I am already 3 months
delequent in paying my monthly due so I asked my sister in the Philippines to go
to the main office for re computation because I want to lower down the monthly
amortization but they insist in paying my 3 months due before the recomputation until my sister has been pass on to different personnel so it ended
up nothing happened to my request. It's been a year and a half since then that
now I asked my sister to go to main office to inquire about my lot and one of the
personnel there inform her that the lot is no longer to mine. I already paid half of
the value of the lot. what is my right? please help. thank you
<img
Enrico said...
Hi everybody. Sorry for the late reply. I've been busy.
Solixua88, in your case the Recto Law is what you will be using. In case the buyer
decides to cancel a sale, the ordinary rules on contracts state that both parties
should return to each other what they have been given. However, the items must
be in more or less the same condition as they were when the sale was made. If
the item you sold was returned to you in pieces, definitely, the contract can't be
cancelled. My advice to you is that you put the money on time deposit so that if
the buyer decides to cancel the sale, you will still have money left.
Alejo, and Lyra, I'll have to ask my teacher in Commercial Law what you should
do.
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Enrico said...
By the way, Lyra, I forgot. Since you have been paying for the lot for at least 2
years, you can ask for a cancellation under the Maceda Law's above 2 year's
payment rule. That way, you can get back 50% of what you paid plus 5% per
year for every monthly installments paid (but you can only get back up to 90% of
the money that you paid.)
Noli said...
Hi Enrico,
I just want to know more about my issue, coz we bought a house and alot under
BF citiland but the property was loaned from Allied bank, but i'm paying the
mortgages in BF citiland developer. Is Maceda law still covers this coz i've been
paying the property for almost 5 years now but something came up and i might
not be able to contiue with the said mortgage. Is there a possibility that i can
also request for refund? Thanks and in advance.
regards,
March 3, 2011 at 7:07 PM
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Enrico said...
Hi Noli,
Yes, you can ask for a request. What the Maceda Law says is at least 2 years.
You're in for almost 5 years, so you are perfectly within the requirement.
Enrico
March 4, 2011 at 12:34 AM
Noli said...
Hi Enrico,
thanks for your reply, sorry for asking again coz my friend in realty business said
that if the property is under a mortgage, this is not included on the maceda law
is this correct. Please help me to know the truth about this issue, before giving
them my decision. thank you so much.
Regards,
Noli
March 4, 2011 at 6:01 PM
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Enrico said...
Hi Noli,
Mortgages are also covered by the Maceda Law. Normally there are 2 parties in a
sales contract: the buyer/debtor and the seller/creditor. When you enter into a
mortgage to secure the loan to finance the property you're buying, a new party
enters: the financing company, which can be a bank, Pag-ibig, or any other
agency. When you take a loan, the law considers the bank/Pag-ibig, etc. as taking
the place of the original creditor/seller. If a financing contract forms part of the
sales contract (like Pag-ibig financing, for instance) it's as if the seller becomes a
collector of the bank, Pag-ibig, etc.
Enrico
March 8, 2011 at 2:01 AM
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Enrico said...
Another thing Noli. I just remembered. When the seller becomes the collector,
the financing company, Pag-ibig, bank, etc. becomes the real seller/creditor.
March 8, 2011 at 2:05 AM
Noli said...
thanks Enrico for giving me alot of information on this matter.
March 13, 2011 at 5:31 PM
Mary said...
Hi! Enrico,
Thank you so much for such a wonderful interpretation of the law. I need advice
regarding the lot that I bought in the Philippines under Sta. Lucia Developer. I've
been paying for this property for almost a year now, but until now we still haven't
receive the original copy of the "contract to sell," and since we are currently
having a financial difficulty I requested for a refund because I think that they
didn't fulfill their responsibilities by not providing me with copy of the contract
and other documents, and when I asked my contact the real estate agent she
told me that it wasn't notarized yet, so I don't know if the contract valid. She also
mentioned that we will not get a refund because of the Maceda law, we need at
least two years of payments. So I requested to transfer the lot to a smaller size
instead. Luckily they approved my request for transfer but I was so dissappointed
because they deducted more than half million of my payments (and more than
half of my payments) towards Marketing Cost and will carry over the remaining
balance towards the new property. So now I don't know if I will just try to
continue with my payments until I reach the two years period and get the 50%
refund other than continue making business with them. My questions are:
1. Since we still don't have copy of the contract that we signed is the contract or
purchase of the lot still valid?
2. When is the start of the two years of payments, because I sent the payment to
the Fil-Estate Realty last June but it was forwarded to Sta. Lucia after two months
I think.
3. Is there any other protection for us here in abroad buying property in the Phils.
since we didn't even physically check the lot/property.
I desperately need your advice. Please help. Thanks
May 6, 2011 at 5:03 AM
ralphmagno_16 said...
Hi Enrico,
I need your advice for house n lot i bought last June 2009 they said i have to pay
the down payment within a year so i dried my best to pay them, i finish the total
down payment last June 2010 w all papers requirement they need for pag ibig
loan , then they start build my house which we agreed on d model house they
show to me.And they also said it will be finish 75 days.we have contract sign
both parties as per agree upon. Days, weeks, months past by in the middle of
Sept.2010 the contractor pull out his worker due to non payment of the
developer.So i complain to the developer they again promise i can move in by
Jan.2011 so they fast track the house.Feb.2011 another problem came up they
said my loan still on process,but still they haven finish my house, again they
promise by April 15 i can move in.So i called up Pagibig office to find out my loan
they said it was already approved, but the house still not yet been appraised by
the pagibig.So i went to the house and i found out some of the materials check
list they gave me not yet installed and they said they revised the plan without
consulting me.And also i measure the lot it was short of 1 square meter.I was
really upset this happen,so i went to the office again and they said while waiting
for appraised of pagibig i can move in but i have to pay a rent to them, i answer
y? they said that there policy . So decide to pullout, could i refund all payment i
made them.They did not follow what we agree upon.I need your advice sir thank
you.Roger Cruz
May 16, 2011 at 11:04 PM
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Enrico said...
Hello Mary,
If you weren't given a copy of the contract, that means something's already
wrong. The 2-year period begins from the time the first installment was paid. If
you paid on a certain date, even if the developer received the money 2 months
later, it's still considered paid on the date of payment itself unless there's a
specific time mentioned in the contract. Regarding protection, you will have to
give someone you trust over here a power of attorney to handle your affairs. You
will have to specify what powers your attorney-in-fact will carry and what
properties are covered by the power of attorney. Hope this helps. Sorry for the
late reply.
May 26, 2011 at 10:59 AM
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Enrico said...
Hello Roger,
Your case isn't just simply a matter of getting back your refunds. The developer
is already in culpa aquiliana because he didn't finish on time, redid the house
without consulting you and handed you a lot that is smaller than the agreed size.
On top of that, he is saying that he is waiting for the loan when the loan was
already approved and wants you to pay rent for your own property! This is
already a tort. I suggest you see a lawyer. Something here is very wrong already.
May 26, 2011 at 11:21 AM
etoma82 said...
I'm Edwin Tomada. Currently, I am a house and lot unit buyer. I'm currently on my
15th month payment for my downpayment (DP) and already fully paid the 1st14th month. But recently, I'm having a financial problem and possibly will not be
able to sustain the monthly dues. Now, I explain my current situation to my
seller, and request instead if possible I will pull out/cancel the contract due to my
financial problem. The seller told me that the payments I already made will just
turned to be forfeited because I'm not qualified yet for a refund. I need to be in
2yrs payment to be able for me to be qualified for a refund. She said this is
according to Maceda Law.
I read the Maceda law and it seems nothing related to it or maybe I just missed
to understand the said law.
Please help explain for me understand this law.
Thank you in advance for your time.
May 30, 2011 at 7:23 PM
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Enrico said...
Hello Edwin,
Under the Maceda Law you need to have 2 years' payments to entitle you to a
refund, which is 50 to 90%, depending on how many years you paid for the lot.
The law doesn't say you can get a refund if you paid less than 2 years.
Hope this helps.
May 31, 2011 at 12:01 AM
Bernaldo said...
Dear Atty.Pozon,]
What can I do so that the developer will issue the notice to cancel the contract so
that I can get my 50 percent of my money? It has been five months and their
Alibi, their Attorney is out of the country and no one knows when he/she is
coming.
Bernie
June 7, 2011 at 9:45 PM
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Enrico said...
Hello Bernie,
You must first have paid at least 2 year's worth of installments. Regarding the
lawyer, you can actually use his absence to your advantage by paying your
monthly installments.
June 13, 2011 at 10:48 PM
<img src="http://2.bp.blogspot.com/AGAZPv5jGFY/TZRnXcHGHEI/AAAAAAAAABg/zod049k-oWU/s35/kiss.jpg"
width="35" height="35" class="photo" alt="">
cherry said...
does the maceda law cover parking space? please enlighten me on this. thanks
June 21, 2011 at 6:16 PM
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Enrico said...
Hello Cherry,
Parking spaces are considered part of the lot in question, so it depends on what
the building there is.
June 28, 2011 at 5:22 AM
Unknown said...
Dear Atty Pozon,
Can I ask who are the person behind Recto law and Maceda law?
July 7, 2011 at 7:26 AM
jeff said...
hi,
Just like to ask... the developer already issued a notice of delinquency, my
payments are as follows: spot dp 20% ; + 7 mos installment for additional 10%
for dp at 0% int; + 10 months amort; + 1 advance payment of 400k. my
payments already totaled 50%+ of the value of the property but i made these
payments in less than 2yrs (18 mos) and this year i was not able to continue my
payments due to financial problems. am i qualified for a refund?
thanks
Jeff
July 26, 2011 at 11:15 AM
erwin said...
Hi atty enrico,
My monthly amortization starts feb 14, 2004,I was able to pay 40 monthly
ammortization which is equivalent for 3 years and 4 months.The unpaid
installment commence on june 15, 2007 until this date.I receive the notice of
cancellation or rescission yesterday so i have 30 days,my question is under
maceda law can i refund the 50% of my total payment made without the seller
deducting the interest and penalty to the total unpaid amount? tnx
August 2, 2011 at 7:39 AM
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Enrico said...
Hello Jeff,
Sorry for the late reply. 4th year law school has turned my schedule topsy-turvy.
The good news is you can be refunded, but only up to 50% if the developer
wants to cancel the sale. You can only avail of the additional amounts if you paid
at least years' worth of installments
<img
Enrico said...
Hello Erwin,
Since you have paid for more than 2 years, you can get your refund.
Anthony said...
Hi Sir,
Hope you could help me with this,I.m Anthony Rempillo from Muntinlupa, I and
my Neighbor bought a house and lot from Prosperity builders inc last June 2010
and paid already around 72k (13 months) The agreement was after one year we
can move in,But came June 2011 they said that still under construction and I
Haven't yet approve for Pag-Ibig but I submitted all the Docs they need for how
many times coz they need an updated info (payslip,COE, etc)Now we decided to
request a refund and its almost 2 months when we requested it and they always
say that still in the process of approval.Under PRESIDENTIAL DECREE 957 - Right
to refund applies when the developer fails to complete the development within
the required period. Refund is 100% of total payments less penalty interest. My
question is"Is there any LAW regarding the time frame on How long it will take to
have the refund? and if in case it will be declined what would be our next step? in
terms of Legal action. Please enlighten me with this.Many Thanks
August 10, 2011 at 9:12 PM
<img
Enrico said...
Hello Anthony, sorry for the late reply. 4th year na ako kasi. Regarding your
question, if a law doesn't say when the time frame starts (like PD 957 for
instance,) we turn to the Civil Code, which provides a default rule: the time to
ask for a refund begins the moment you make a demand (written, of course) to
the other person. Hope this helps.
August 25, 2011 at 7:12 PM
CJ said...
Good day po sir. The Maceda law provides in Sec. 3: "Down payments, deposits
or options shall be included in the computation of installment payments made."
But I cannot understand why the Supreme Court in the case of DELA CRUZ vs.
COURT OF APPEALS, G.R. No. 151298 (Nov. 17, 2004) did not take into
consideration the P1.5 million down payment of respondents but only the
P50,000-installment in computing the total number of installments made. It
simply said that since there was only one installment made, Sec. 3 does not
apply but instead, Sec. 4. So, how should the P1.5 million down payment be
treated then? If this amount of P1.5 million is not included in the computation of
total installments made, what then is the significance or use of this the abovequoted provision? If you have time, can you please research on the debates and
discussions made by the lawmakers during their deliberation of RA 6552 in order
that we may be enlightened on this unfair decision of the Supreme Court. Thank
you very much.
August 27, 2011 at 12:59 AM
vash_stampede_46 said...
Hi Enrico, what are the salient features of the Maceda Law? Thanks!
September 16, 2011 at 7:27 AM
vash_stampede_46 said...
Hi again, kindly advise me on this. My issue is somewhat related to "Noli's Case".
My wife bought a house & lot when she was still single under CitiHomes
Developer and the property was loaned at Pag-ibig. She is paying for almost 7
years now. Since we are experiencing financial difficulties at the moment, she is
planning to "voluntarily surrender" the property. With regards to the Maceda Law,
she is entitled for a 50% refund and 5% for every year. However, when we
consulted Pag-ibig, they told us that since the Certificate of Title was already
under her name, "she is not entitled to any refunds". Please help me on this
matter. Many thanks!!!
<img src="http://2.bp.blogspot.com/OWybwJSpsug/Tk0qtWpR5NI/AAAAAAAAABU/xnfg6ZhCx4/s35/manny_112209.jpg" width="35" height="35" class="photo" alt="">

Manuel Antonio said...
Hi Enrico. I bought a property 10 years ago on installment. On the 7th year, I
failed to pay my installments and the property was foreclosed by the developer.
When I learned about the Maceda Law, I requested the developer to refund me
what is due to me as stated in the said law. However, when I received their
computation, they said that I can only refund the amount of P92,000+. What I
remembered is that I already paid almost P800k before the property was
foreclosed. Can you give me an advice how to go over this?
September 21, 2011 at 6:59 PM
<img
Enrico said...
Hi Vash, sorry for the late reply. Your case is actually complicated because the
title was already issued. I think The reason why Pag-ibig won't give a refund is
because they think the property is already your wife's because of the title. But
the Maceda Law doesn't say anything about whether or not the issuance of a title
bars a refund. I think you actually can ask for a refund. To be safe, I would
suggest surrendering the title to Pag-ibig.
October 28, 2011 at 8:16 PM
<img
Enrico said...
Hello Manuel. Sorry for the late reply. We had a very long final exam period.
You're supposed to get a refund of 50% plus 5% per year of payment but only up
to a total of 90%. Yes, the developer's computation does look suspicious. I
suggest you ask for a recomputation, but have a lawyer make the request in
writing.
jose said...
Hin enrico,
I have only read about these laws today. I have 2 cases:
-House and Lot1.The DP for the house and lot I was supposed to purchase was under 1 year-topay installment which will become due on December 2011
2.I have paid about 6 months amortization already (about P37,000)
3. On 7 Oct 2011 I WROTE the developer that I would be withdrawing my intent
to purchase the property and asked for refund.
Questions:
-Which law will apply to me- the maceda law or recto law? (or neither?)
- how much can I recover from the DP I have paid if any
- what shall i do to get my refund
-Condo1.I have paid about P45,000 as Full Reservation Application Fee (FRAF-thats the
term they used in the form I signed) for the condo I was planning to buy. The
total DP is about P150,000 due on 13 Oct 2011
2.The Condominium Reservation Form I filled out and signed has the following
conditions:
a)if my application would be approved, the FRAF would form part of the DP (it
was approved)
b)I have to pay the balance of the P150,000 not later than 13 Oct 2011
c) submit some docs etc.
3) Due to some conditions in their offer which I later discovered, I decided not to
pay DP balance on 13 Oct. I would like to withdraw now.
Questions:
-Which law will apply to me- the maceda law or recto law? (or neither?)
- How much can I recover from the P45,000 I have paid if any
- how can i get my refund?
thanks jose
November 8, 2011 at 11:23 PM
JEC said...
Hi Enrico
Thank God I found your blog.
Hope you can help me with my concern.
I bought a unit from EMPIRE EAST..
I already paid 34 months of the required downpayment plus the reservation fee.
But now I need to cancel the contract because I need the money for a very
important reason.
I called the EMPIRE EAST to ask if I can get a refund if ever I cancel the contract,
to my dismay, they said that based from the contract I cant get any refund. I told
them about the MACEDA LAW, they said that I can use the LAW but it will go to a
LEGAL process..
DO you think na may possibility na I cannot get a refund?
Im afraid na If I apply for a cancellation I cannot get anything..
Please enlighten me..
November 14, 2011 at 2:54 AM
<img
src="http://1.bp.blogspot.com/_c6oYHTGVgDs/Sap2PtdKFsI/AAAAAAAAAGk/tWvB
A_HhIrY/S45-s35/NEW%2B3%2BTIER.jpg" width="35" height="35" class="photo"
alt="">
exomod said...
Good Day Enrico,
In regards to my case, I have purchased a unit from Megaworld and payments for
almost 3 years, then financial crisis happened in my part that I can't longer pay
the monthly payments. Till now Megaworld hasn't issued me a notarized
cancellation of sale, I just told them via email that I can't longer to continue on
my payments and look for other options on how to save my investment of
P907,500.00 before I found out about the Maceda Law I was told by MW accounts
specialist that they can do a transfer of credit with a one year to other MW
projects for a minimal fee and all I had to do is send a request letter. I sent the
request letter over 2 months ago and just yesterday I finally got an email reply
from MW that my request was approved over certain conditions. Please see
actual email reply of MW below:
Dear Mr. & Mrs Picazo,
Your request for a 1 year credit transfer has been approved with the following
conditions:
1) 50% forfeiture of payments and 50% of actual payments to be transferred to
new unit
Total Payments: 907,500.00 (subject to verification of Accounts Receivable Dept)
50% Transfer: 453,750.00
2) Signing and notary of Release Waiver and Quit Claim (Please see attached
template. For faster transaction, kindly print 3 copies and send original copies to
us. Or we can send original copies to your address if you want.) Please pass this
document on or before December 20, 2011 so we can effect said request.
Regards,
Gabrielle C. Castillo
Accounts Management Specialist
16F The World Center Bldg.
330 Sen Gil Puyat Ave.
Makati City 1200
Philippines
After reading this and knowing more about Maceda Law I replied back with email:
Gabrielle,
As a Megaworld client I want to schedule a personal meeting with an upper
management. I will not agree on a 50% forfeit of payment. Please give a contact
number.
-----------------------------------------------Gabrielle,
I will be at your office at 9 am Tuesday, just an fyi I am aware of the Maceda Law
and how will it be applied in cases like this and if this is what I am going to get
after requesting a credit transfer then I will just request for a 50% refund under
the Maceda Law, I can't believe that after dealing with your account specialist KM
Liberato and told me and had me believed that a minimal fee will be applied if I
request for a credit transfer within a time period, and to be frank with you
P453,700.00 is not a minimal fee I also waited for over 2 months just to get a
response back after sending my request. Now I am very unhappy and dissatisfied
with your company and your services.
-----------------------------------------------this is there reply back to me:
Okay Sir,
If you would like a refund, kindly make a signed request letter containing your
request.
I'll see you on Tuesday.
Regards,
Gabrielle C. Castillo
Accounts Management Specialist
16F The World Center Bldg.
330 Sen Gil Puyat Ave.

Makati City 1200
Philippines
------------------------------------------------I will be meeting MW on Tuesday, is there any
advice you can give me, also will it be better if have a written request for refund
done up by my attorney? Your input will be appreciated.
December 3, 2011 at 12:12 AM
<img
Enrico said...
Hello, Jose. Sorry for the late reply. I'm kinda busy because I'm already in 4th
year. Regarding the house and lot, the Maceda Law is controlling because the
Recto Law covers personal property. Since you didn't meet the 2-year
requirement for paying installments under the Maceda Law, you can't,
unfortunately, ask for a refund. What you can ask for is an extension. Regarding
the Condo, the Maceda Law also applies, but how for long have you been paying
your installments? Under the Maceda Law, you can get your refund only if you
paid at least 2 years' worth of installments.
<img
Enrico said...
Hello JEC, sorry for the very late reply. Rather busy because I'm in 4th year now.
Since you paid 34 months' worth of installments, you already qualify for a refund.
The legal process doesn't necessarily mean going to court, but a lot of people get
frightened when they hear it mentioned. Every large business is supposed to
have a grievance mechanism in case there are problems with clients. Also, going
to court isn't the next resort. Under the law, mediation is a cheaper alternative
and the courts actually encourage this. The court won't entertain a full-blown
trial unless the mediation has broken down.
<img
Enrico said...
Hello exomod, really sorry for the late reply since I'm already in 4th year law. I
think you did the right thing when you refused to agree to the waiver of the
refund.
miss patty said...

Hello Enrico! Medyo na confuse lang po ako sa Maceda Law. Is that law only
concerns deliquent buyers? In my case po kasi, I religiously paid my condo for 41
months now plus the downpayment, but due to unexpected circumstances, I
wont be able to continue the monthly payment. I havent missed any payment
yet but I'm planning to just cancel the future payments and opt for a refund
instead. Pano po yun? Is the Maceda Law still applicable kahit di naman ako
deliquent buyer or meron po bang ibang law regarding refunds to those who
decide na di na nila kayang bayaran yung condo units nila like me.
Cherrybum said...
Hi Enrico and all folowers of this helpful blog,
I'm sorry if I bother you and if this form of communication to you is rather
intrusive but I am in dire need of a legal advice.
Here is my story. (This is actually almost the same with one of the guys that you
have provided answer in the blog the guy Roger Cruz). My story is that, I have
purchased a property from a big real estate company. This happened on 2007. I
have paid the 20% DP for the whole 12 months. By 2008 my DP was fully paid
and the bank loan for the 80% has been approved and in fact given to the
developer early 2008. They have promised that property will be turnover
sometime 2008/2009. To cut the story short it has been 2011 err 2012 and the
property has not been turned over yet. I have been bugging them and I have
come to the point where I'm so disappointed and pissed off that I tried not to
think about them as it is giving me a lot of negative energies. Oh last year
after I have been emailing them of complaints and demand letter for them to
compensate me on the sooooo long delay of the turnover they said finally said
they will compensate me. I have given them a list of what I think I should be
compensated me from including the MRI -btw I have been paying for the
mortgage since 2008! the apartment rentals which I shouldnt be incurring
have I moved to the place since the time they have promised that they will
deliver, the fire insurance I'm paying for the property that has not been lived in
yet. Well, they did not approve everything but they did give me something to
compensate. They made me sign a quit claim (sometime Aug 2010) to which I
signed with their promised that nov /dec 2010 the unit will be ready. Obviously it
was not. May 2011 they finally said that the unit can inspected. And since I am
in the US I have sent a rep to inspect the unit in my behalf. My reps have found
some things that needs to be corrected. They took pictures to show me to shich
I told the developer I wont sign the acceptance because of those. A few months
have past I have not heard from them until about sept / oct I did a follow up on
them. After so many emails I have to copy the person whom I met personally
during the whole demand /compensation period and she the one who made the
ff/up to the turnover group to reply to me. They told me that most of the defects
were corrected they sent pictures but there were only 2 more for fixing. And
then come Dec 2011 I havent not heard from them again after so many emails
asking for update so I again forwarded my emails to my contact and asked her to
personally ff up for me. And here is the fun part they came back to me today
(the turnover group) with this email, I will make kapal my face to attached it
(obvious ba na I'm so mad pasensya na po). Basically they are telling me that I
have no choice now but to sign the unit acceptance to which I am not
comfortable with.
I have been contemplating long time ago to file a legal complain but I know they
are a big company and although I know I have very right I'm not sure if I have a
good case. I did reply to the email attached though telling them that since they
are bringing legal in matters in this I shall consult my lawyer too for proper
action. .is there any law that protects me from these kinds of brouhaha? thanks
so mch! - CherryB
Alexander C. Bobis said...

Hi sir Enrico I am Sandy a pre selling town homes buyer meaning the house is
not yet built but the developer already recruited as to pay our desire house and
lot area.I'd paid the down payment divided in 3 years but on the eight month i
decided to cancell my payments because the agent told us the house will be
built after 6 months or less than one year but it is still not being built by the
buyer...is the two laws applicable to this matter?or i would like to seek your
advise if i could refund all my money deposited if not all less percent of the
amount!!!please help me with these issues.Thank You very much and God bless
ablogtoremember said...
hello Sir i bought a condo in Mandaluyong it's a pre selling condo and ive been
paying for almost 3 years and half for downpayment and i want to cancel the
contract. Will the Maceda Law apply to it? I am only paying for the downpayment
with no interest.Thank you so much
January 24, 2012 at 12:54 PM
<img
Enrico said...
Hello ablogtoremember,
Yes, it will apply.
lovecantos said...
Hi Atty,
gusto ko sanang mag consult sayo regarding dun sa binili kong condo if i can
apply the MACEDA LAW.
I bought a pre-selling residential condo unit in Mandaluyong last 2008. I've been
paying with no default for the past 37 months (3 years and 1 month) and now i
decided to cancel it, so i talked to the developer's staff sabi nila sa email ko
ganito.
"please be informed that under the Contract to Buy & Sell which you signed with
us, withdrawal for any reason whatsoever shall entitle the Company to cancel
said Contract. Furthermore, Contract to Buy & Sell provides that upon its
cancellation, the Company shall be entitled to forfeit all your payments as
liquidated damages."
So sinasabi nila dyan na ma foforfeit yung binayad ko for the past three years.
Pero according to Maceda Law may rights ang DEFAULTING BUYER
sabi dito sa REPUBLIC ACT NO. 6552 REALTY INSTALLMENT BUYER PROTECTION
ACT
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.
so does it mean na yung pinirmahan kong kontrata sa kanila ay null and void
because there is Maceda Law? And meron din kasing mga other clients sila na
naka claim na ng 50% refund of what they have paid using Maceda Law. But i
just want to ask for you help and insight sana regarding this if i can apply my
case using Maceda Law para ma entitled ako sa refund of at least 50%. Kasi
medyo heartless ang developer na Empire East of Megaworld, kung hindi mo
alam na may batas pa lang ganito, hindi nila ibibigay ang karapatan ng buyers
nila. Thanks! hope you can give me advise on this. Thank you
January 25, 2012 at 10:58 AM
<img src="http://3.bp.blogspot.com/_xOkws6qZwc/Sau5k4bSccI/AAAAAAAAAGM/bhYbgoAnbjA/S45-s35/Me.jpg" width="35"
height="35" class="photo" alt="">
Elena Shella Tejada-Villamor said...
Hi Enrico,
I'm having high hopes that you'd be able to enlighten us regarding our situation.
we invested on a house & lot from DDC Land in Sta Rosa City. We explicitly told
our account manager back then that we want to begin paying our amortizations
only after we complete our equity/downpayments. unfortunately, they still
processed my husband's pagibig papers and so he got immediately approved for
a housing loan. the problem was, we were renting, paying for the equity & the
amortization now.
is DDC allowed to do that despite our verbal agreement to wait for the equity to
be fully paid before starting with our pagibig payments?
now, the developer has sent as a rescission of contract to sell (i just received it
today). the sad thing is -- we've never enjoyed living in the property! we feel that
we've been paying for thin air especially now that the property has been bought
back. we've only been paying for over a year of amortization. and worse, pagibig
is threatening to blacklist my husband.
what are our rights and what options do we still have left? please help us...
January 31, 2012 at 11:44 PM
Robert said...
Hello Enrico,
I have a 10 year mortgage and paid 21 months of installments. I also made a
down payment of Php 1,206,000. Is my down payment considered additional
monthly installmets? Or do I have to pay 3 more months to meet the 50%
Maceda Law requirement?
March 18, 2012 at 8:54 AM
atong said...
HI SIR
This september 2012 we will starts paying our first monthly ammortization now
with mri and fire insurance but still as the promise date of turnover of our condo
unit cant be by all means met because it was promise at the end of 2012 , what
move can we do , our downpayment is only 24 k
but on the ammort,stage we will be paying 34k +
thank you very much GOD BLESS YOU
March 23, 2012 at 11:23 AM
Bong said...
Hi I hope by now I can already address you as Atty Pozon. I already paid 2 years
of amortization but due to financial problems I defaulted paying my installments.
The developer asked me to execute a letter promising to pay in one year which I
made hoping I will land a job. This was 2004. Until this time I not able to pay my
account. My question: Can I still request for refund even if it has been so many
years now invoking the Maceda Law? Is there time limit applying the Mace a
Law?
Thanks. ... Bong N
March 27, 2012 at 6:50 PM
Pinoy Tagabantay said...

18 Apr 12
Dear Atty,
Atty, want to hear your advice on our situation, actually i posted this last Monday
16 Apr'12, but when I open your blog to verify your reply, my whole story was
disappeared,don't know why. This is my situation: Year 2007 we bought 2 lots at
Mt House Subd.,Brgy Irisan, Baguio City at pre-selling price 2yrs to pay with zero
interest under BI Centennial as Developer. Before the signing of contract the
marketing of BI Centennial at Easwood, QC told us that their Subd's
development.,(Mt. House) will be finished within 2 yrs. So in other words, we
religiously paid the 2yrs monthly amortization. But when we pay the last 60k as
our full and last payment they (BI Centennial) did not accept for the reasons that
they have to accept it only when the title will be ready for issuance. But 2 yrs of
their promised had passed, until today 2012 when I visit the area the progress of
development was too slow which disappoint us it almost 5 yrs after we signed
the contract to sell. Now we decided to pull out our money. Atty, may we know
what law we'll be used as reference in our claims? tnx a lot
April 17, 2012 at 9:46 PM
Pinoy Tagabantay said...

18 April 2012
Atty,
We really need your advice or reply on our situation. Atty, pls thanks again pinoy tagabantay April 17, 2012 at 9:52 PM
Ma. Arrilu said...

Hi Attny,Libra Please give an advice. My apartment has been forclose because of
the sickness of my husband default for over a year I already paid the bank 3 yrs
if I had enough money I pay more to cover-up but still i cant update coz of
unavoidable circumstances I approach our bank they said they want me to paid
in full but I cant afford it my property is more far than my loan.And my 15yrs
abroad I invest so that we have our resources I want to save it What would I do,
Im very willing to compromise but not to extent killing us to pay. Thanks
April 21, 2012 at 10:35 PM
drscribe said...
Atty. Pozon: I would like to ask if, under the Maceda Law, the 50% refund
entitlement would mean a full 50% refund or does the developer have the right
to exercise demand for payment on penalties and unpaid amortizations? Thanks.
I desperately need your advice.
April 25, 2012 at 3:47 PM
ZWave27 said...
Hi Atty. We bought a condo unit under DMCI homes in 2006. DMCI experienced
some migration system error early 2010 and our account was one of those who
got affected. It lead us to become behind our monthly amortizations. July 5, 2010
we rec'd a letter demanding us to settle our dues within 60 days. We weren't
able to pay. I was telling them to waive the penalties on those said months our
checks weren't deposited due to said system error. Clearly it wasn't our fault and
yet they penalized us.They did not settle this matter. I did not make payment
from then anymore. Our hands were tied too because we are here in the US. All
along I thought DMCI have cancelled our contract already, basing it on the
demand letter they sent me. Only to find out that they have just cancelled it last
yr in October. Clearly, we are entitled of the 50% refund but because they just
barely cancelled our contract it would not be as much if they cancelled it in 2010.
I've been trying to call their customer service and legal department but nobody
seem to know what to do. Legal department says to call customer care and vice
versa. All they can tell me is to just get the refund already. But how about my
concerns? It was not our fault getting behind payments in the first place and why
are they barely cancelling our contract? Emails to them have been sent but no
reply. Is there a way to speed things up regarding this? Do I have a ground to
complain why they didnt cancel our contract right away where it was clearly
stated in the letter that they will cancel if not settled within 60 days. Please tell
me the steps to take. I have given my aunt over there a SPA so she can speak in
my behalf. Pls, Atty, tell me what to do. I am getting frustrated of getting
bounced back and forth.
June 1, 2012 at 2:41 AM
<img
Enrico said...
Hello lovecantos,
A basic rule in law is that although a contract operates as the law between the
parties, the contract can't be made in such a way that it can violate the law. So
yes, you can question the developer
June 21, 2012 at 5:36 AM
<img
Enrico said...
Hello Elena,
Sorry for the late reply. When did you enter into this contract with DDC?
June 21, 2012 at 5:39 AM
<img
Enrico said...
Hello Robert,
Sorry for the late reply. When the law says "installments," it means "installments"
so the downpayment isn't included.
June 21, 2012 at 5:42 AM
<img
Enrico said...
Hello Atong,
Sorry for the late reply. You can inquire into what is causing the delays. If they fail
to give a satisfactory answer, you can have the contract rescinded. But you must
remember that since you didn't pay at least 2 year's worth of installments, you
can't get a refund.
June 21, 2012 at 5:54 AM
<img
Enrico said...
Hello Robert,
Sorry for the late reply. Yes, you have to complete the 2-year requirement (as in
24 months) in order to qualify for a refund.
June 21, 2012 at 5:56 AM
<img
Enrico said...
Hello Pinoy Tagbantay,
Sorry for the late reply. The developer seems to be trying to avoid paying the
refund under the Maceda Law. The delays are tantamount to committing a tort.
You consequently can actually demand that they complete the construction (and
if the courts will allow it, ask for damages.)
June 21, 2012 at 6:00 AM
<img
Enrico said...
Hello drscribe,
Sorry for the late reply. The 50% refund refers to the actual amounts paid.
June 21, 2012 at 6:09 AM
<img
Enrico said...
Hello Ma. Arrilu,
Sorry for the late reply. Your problem isn't under the Maceda Law. I'm not a CPA
so I can't advise you exactly on how to go about this. If you and the bank can
enter into a debt-restructuring agreement, that might help.
June 21, 2012 at 6:16 AM
<img
Enrico said...
Hello Zwave27,
Sorry for the late reply.
Yes, you already have ground to complain. The fault lies with DMCI. There is also
a negligence issue here because DMCI didn't correct its systems error. You may
have to approach a lawyer now.
June 21, 2012 at 6:21 AM
Bong said...
Atty, is there prescription period to apply the maceda law. - Bong N.
June 21, 2012 at 7:15 PM
Sheila Carrillo said...

hi. Is Maceda Law applicable to all financing type? In case of voluntary
cancellation, is the buyer entitled to refund if payment is 2yrs already? Is it also
subject to standard deductions? thank you.
June 22, 2012 at 9:32 AM
Alexis Ferr said...

Is it true that in networking, if you gave your money to them and one of their
employees encoded your account without your permission that you can no
longer get the refund? I'm still a student and I paid 9800 for this which took me
about 2 years to save. I've been to their office for about three times now and
they always answer me with "This is not our responsibility, you should go talk to
the one who recruited you about this matter" I got my receipt back from the one
who recruited me, I just can't understand why I can't get my money back
because they said my name is already encoded, BUT they said I can recruit
someone else to replace my position considering that I will pay 300 pesos so that
I can transfer my account and change it's name. HELP :( What law is against this?
And what will I tell them? The fare is very expensive and I can't afford to go there
anymore and just listen to them telling me that I can no longer get refund on
this.
June 27, 2012 at 9:43 AM
mayonaise06 said...
hi! I bought a lot 2009 in one of the new development subd of LAND CO REALTY?
and fully paid last 2010.they give me copy of title.But until now my True copy is
still under process.they said its still in the bir etc etc.Right now Im planning
refund what I paid because Im tired to wait until next year.Is it possible to
refund?and who I should about my case? pls help.thanks!
July 18, 2012 at 6:20 AM
<img src="//lh4.googleusercontent.com/-6CDHRf4a8k/AAAAAAAAAAI/AAAAAAAAABg/7DO2pJVqDc8/s35-c/photo.jpg"
Paul Jason Bermudez said...
Hello Po, ask lng po ng advise regarding my problem. siguro nman po nabalitaan
nyo ang kaso ni Delfin Lee (Globe Asiatique). Ang problema po kasi 29 mos na
kaming nkabayad including yung sa dowmpayment. tpos since nagkaproblema
ang Globe Asiatique, nagstop payment muna kami. tpos last 3 weeks ago
nakareceived na kami ng letter for cancellation of contract. we decided nlng na
give up yung unit since alam nmen na makakreceive kami ng at leat 50% kasi
cover ng maceda law... pero ang sabi ng GA hindi daw cover ng maceda law kasi
magstart ang 2yrs nung naturn over yung bahay. ang tawag nila ay Interest
Bearing daw... tama po ba yun? ano po ba ang dapat nmen gawin? salamat po...
July 23, 2012 at 3:14 AM
<img src="//lh4.googleusercontent.com/-6CDHRf4a8k/AAAAAAAAAAI/AAAAAAAAABg/7DO2pJVqDc8/s35-c/photo.jpg"
Paul Jason Bermudez said...
Kasama po ba ang dowmpayment sa counting ng 24mos sa maceda law? for exp.
10mos to pay and downpayment, tpos naka 18mos ka ng payment after ng
downpayment. possible ba ang refund? thanks!
July 23, 2012 at 4:51 AM
<img
Enrico said...
Hello Bong N.
Sorry for the late reply. There is no mention of a specific prescriptive period in
the Maceda Law, so the Civil Code's rules on prescription apply.
July 23, 2012 at 10:53 PM
<img
Enrico said...
Hello Sheila,
to all your questions: Yes.
July 23, 2012 at 10:55 PM

<img
Enrico said...
Hello Alexis,
My advice to you is to leave networking to those people who have a lot of money.
I used to be in network marketing and it's not easy to make money in it.
When you were recruited, did you sign anything? And how much did they ask you
to pay?
July 23, 2012 at 11:01 PM
<img
Enrico said...
Hello Mayonaise06,
The Maceda Law doesn't apply anymore because the contract was fully paid for.
What you should do now is make a notarial demand that the developer hand
over the title to you.
July 23, 2012 at 11:04 PM
<img
Enrico said...
Hello Paul,
Yes I know about the GA scandal. The downpayment is part of the purchase price
pero hindi kasama ng installment payments. Iba yun.
Good news para sa 'yo, you can get your refund kasi ang Maceda Law nagsabi ng
2 years' installments. Period. Wala siyang qualifications ng trunover, etc. Sabi
lang ng Maceda Law na at least 2 years' installments lang.
July 23, 2012 at 11:10 PM
turvan gross said...
This comment has been removed by the author.

July 25, 2012 at 9:04 AM
turvan gross said...

Hi Enrico,
Thank you so much for your blog. I also have similar cases as what I have read
above. My case is that I purchased a condo unit from L.I.K.A.S in sta mesa
manila, with total contract price: 1,052,000. I paid downpayment(10thou),
completed 24 months equity of 8521 each month, and additional 100thou so a
total of P314,000. I submitted all the requirements. But before they submitted
this to bank for loan approval, I decided not to continue purchasing. Based on
above scenarios I'm entitled to Maceda Law,but can I get the whole amount I
paid(P314,000), or if not, can I settle this with the seller so that I can get the
whole amount and not only 50%? Or is there any other way I can get the more
than 50% like asking the agent to find another buyer? I hope you can help me, as
I'm going to send tomorow my letter of requrest to cancel my purchase to their
finance dept. God bless you! - John
July 25, 2012 at 9:16 AM
<img src="//lh5.googleusercontent.com/4FbA1Dw4ze8/AAAAAAAAAAI/AAAAAAAAABE/EkhnlFYNxBg/s35-c/photo.jpg"
Emma Lenon said...
Good Day Sir, i would like to ask po sana if ever na nagpasa na po ako sa
developer ng request for a refund then nareceive naman po nila actually March
9, 2012 ko pinareceived ang tanong ko po talaga po bang matagal ang pag re
refund? Second, pag nag fo follow-up po ako ang sinasabi po nila antay antay
lang daw po kasi dapat daw pong may bumili muna ng lot na kinuha ko. Thank
you po
Jefferson Go said...
Hi Good Day Sir,
Gusto ko po i-inquire ang tungkol sa Maceda Law. Meron po kasi akong
residential lot na binabayaran sa isang developer (tapos ko na po ang 1 yr na
downpayment and 2 years na amortization) I am on my 3rd amortization year
pero hindi ko na po kayang ituloy. In my understanding, qualified po ako. Ano po
ba ang unang hakbang na gagawin ko para makuha ko ang refund? May mga
hearing din po ba ang ganitong situation? Are the sellers given a certain
leadtime to give our refund? I am worried na baka sadya nilang tagalan ang
proseso nila.
Maraming salamat po.

<img
Enrico said...
Hello turvan gross,
What the Maceda Law allows you to recover is 50% of the amount you paid plus
an additional 5% per year after the first 2 years but you can only recover up to
90%. If you want, you can sell the unit to someone else after it's been delivered
to you.
<img
Enrico said...
Hello Emma,
I think kailangan ka mag-execute ng notarial demand kasi based sa comment
mo, ba't maghanap sila ng ibang buyer? Feeling ko they're delaying. Go to an
attorney and have him exectue a notarial demand. Kung gusto mo, punta ka sa
Public Attorney's Office kasi libre ang kanilang services.
<img
Enrico said...
Hello Jefferson,
The first thing you have to do is to inform the developer of your inability to
continue paying. Since you've paid 3 years' worth, you're now entitled to a 55%
refund of the amount you paid. If the developer refuses -or delays- you can make
a notarial demand; this demand, however, must be made only if the developer
doesn't act on your complaint or delays.
hope this helps.
Anthony Gutierrez said...

Hello sir,
Sir pwede po bang paki enlighten kmi about maceda law. Kumuha po kami ng
house and lot on installment basis within 7 years. Issue po is nag back-out kmi
due to financial problem. We're trying to refund the 50% na naihulog na po
namin. Ang sabi po ng developer is that the interest is not included in the money
that can be refunded only are the principal and the down payment. We need your
advice before we proceed to the court if we have the chance to win this case.
Salamat po.
Anthony
drake said...
Sir ask ko lqng po may binibili po akong property sa state land nalabauad na po
ako religously for almost 8 months amounting to 700k due finacial problem nag
requedt pp ako sa developer ng refund sa lahat ng binayad ko it wa almost a
month na ang lumipas since i ask for refund then wala po ako ma tangap sa
kanila ng concrete answer then nung nakausap ko yung agent ko sabi niya na
forfieted nga daw lahat ng binayad ko even pano namn po yung binayad ko . I
realy need your help
October 7, 2012 at 2:18 AM
Jefferson Go said...
Hi Sir Enrico, would like to clarify regarding technicality of the "at least two (2)
years' installment" for me to qualify a 50% refund. Does this include the date
when my reservation fee was registered in my seller's database?
October 31, 2012 at 12:38 AM
marco polo said...

Good day sir, Asking for your help, my terms of payment for my lot was
restructured due to my financial problem so half po ng binayad ko already
forfeited. until I decided po na irefund na lang but according to them they still
need to deduct the penalties and expired interest from the remaining unforfeited
amount. I paid almost 85% of the lot cost. I need your opinion here sir. thank you
Dekya said...
Hi sir, ang case ko po ay almost the same ng nsa itaas .. Paid 24 months dp with
sm condo and decided to cancel.. I am overseas i did not receive any contract to
sell. Now they send me copy of deed of cancellation stating that no refund will be
given. Can my husband who is in the philippines do the work for me. Like the
notarized request to cancel and demand for a refund?Do i need to execute a SPA
for him to all the necessary transaction on my behalf?i received the deed of
cancellation december 24th and they are requesting it to be returned within 15
days. I did not sign it thou. Will it affect the cancellation and refund if i did not
sign and returned it to them within the said period? Hope you can enlighten me
in this thanks.
December 30, 2012 at 12:23 AM
Vid said...
Hi Enrico,
I am very desperate of my case. I bought a commercial lot sometime in July
2009. I've been payong monthly regularly for php16,000 until Jan 2011 and
become delinquent from Feb to July 2011. However, in August 2011, i have paid
php500,000 and having a remaining balance of Php65,400. And because I was
being promised to receive a rebate and discount I did not fully pay the balance.
Unfortunately, the next payment was again made in Jan 2012, June 2012,Oct
2012. When we inquired the latest balance in Dec 2012, a big surprise when the
current balance has increased incredibly. Then to realize from the statment that
12% VAT was added into my account. The developer has pass on to me the VAT
without our knowledge and consent. But the said VAT was not stipulated in the
contract. At the end I have paid the balance in full without consideirng the 12%
vat. The developer insists not to issue the deed of sale as they insists to pay first
the VAT otherwise they will forfeit the purchase of lot.
My questions are:
1. Can the developer forfeit the lot if we become deliquent for several months?
2. After becoming deliqunet and they still accept my payment I should then be
back as active payer? They insists that my lot has been forfieted a long time ago
in 2011 yet they have accept the next payment of USD500K? is it possible?
3. should i be liabe for the 12% vat where it is not stipulated in the contract at
the beginning. I would understand that when the lot was sold to me VAT should
included be considred in the selling price. so I am really liable for it?
4. Can the developer refuse to give the deed of sale?
5. when the lot was sold to us at the beginning, the lot plan was catgorized as
commercial and the rate was also for commercial but I recently realized that the
contract did not specify a purchase of as a commercial lotbut instead just a
purchae of lot. so it really a commercial lot? so there is no issue of VAT?

Thanks in advance.
Vida
Cheryl said...
Enrico, I am so happy you are from Cagayan de Oro. taga ato diay ka. tabangi ko
palihog.
unsay akong next step. nag palit ko ug condo sa Megaworld 2 years naku
nagbayad. some circumtances happened, amo gi cancel. amo na gipadala ang
cancellation letter. I want my Macedal Law REfund. Unsay sundo nakong
buhaton? naa kay maayo nga lawyer imong maka refer? salamat kaayo! Cher
D&G said...
This comment has been removed by the author.
March 10, 2013 at 1:56 AM
D&G said...
Please enlighten me with regards to the Maceda Law. Here is my case:
I signed up for a 15 years to pay contract with Empire East for a condo unit. I
paid for the down payment and the monthly amortization from Sept. 2005 until
December 2011. But due to some financial problems, last January 2012, I sent an
email informing them that I can no longer pay the monthly amortization and I am
requesting for the cancellation of the contract and release the rest of the post
dated checks issued. They asked for some documents needed to authenticate
my request and I sent it through email last Feb. 2013. I have not heard anything
from them up to this time regarding the status of my request. Then last August
2012, I got an email from their collection department for an OVERDUE BALANCE.
And another email last October 2012 for the AMNESTY PROGRAM on which they
will waive all the penalties for late payments.
Based on our contract, it says "all payments made will be forfeited":
with my situation, am I entitled for a refund though I requested to cancel the
contract? and I stopped paying since I requested for the cancellation of contract
last January 2012 up to the present. I paid for 6 years & 4 months, from Sept.
2010 to Dec. 2011.
I hope you can enlighten me with the above situation. Thank you in advance.
D&G
March 10, 2013 at 3:03 AM
Steven Plan said...

Hello Atty. Enrico.
May I seek your advice regarding a case about Maceda Law. What if the duration
of the contract entered by a buyer and seller is 2 years or less then the buyer
defaulted his payment say at his 10th monthly payment. What will be the
probable ruling on this one?I've read the provisions of Maceda Law but it seems
that it is not applicable on this case because of the term of the contract. Kindly
enlighten me on this one please.
March 21, 2013 at 3:30 AM
<img
Enrico said...
Hello Cher, Sorry for the VERY late reply. Sobra na ko ka busy. Maghimo ka ug
notarial demand.
April 21, 2013 at 11:39 PM
<img
Enrico said...
Hello Jefferson,
Sorry for the very late reply. I'm kinda floored right now. It means you paid a
minimum of 2 years' worth of installments as well as your reservation fee. Hope
this helps.
April 21, 2013 at 11:43 PM
<img
Enrico said...
Hello, D&G,
Sorry for the very late reply. I'm so busy lately. Yes, you are entitled to a refund.
Approach a lawyer and get him to execute a notarial demand.
April 21, 2013 at 11:47 PM
<img
Enrico said...
Hello Vida,
Sorry for the very late reply. First of all, VAT applies to the sale of residential units
by a developer. It's in the law. However, the developer can't forfeit the lot simply
because you didn't pay the VAT -and he also can't refuse to give you the deed of
sale. They're just trying to make you pay. If you became delinquent for a while
but started paying again, that means you're not delinquent anymore. Finally,
since you've been paying since 2009, you can get a refund; you need to go to a
lawyer
April 21, 2013 at 11:59 PM

The Recto and Maceda Law

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The Recto and Maceda Law

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The Recto and Maceda Law (RA6552) in

Demand that the buyer pay (a.k.a. specific performance)

Cancel or rescind the sale

Commercial buildings and lots

Lands under the CARP Law

If the buyer has paid less than two years installment:

Section 8. If any provision of this Act is held invalid or unconstitutional, no other

Maceda Law in the Phillippines applies to the purchaser of real property by

LIMITATIONS ON RIGHT OF OWNERSHIP

Exclusive easement of the space of his unit

Principle of diminishing returns - States that the application of more factors of

Expenses for execution and registration of sale

Arrangement of appointment between parties for contract signing and payment

5.Right to sell, lease, or mortgage his unit.

Optional and Mandatory Requirement. The condominium corporation is optional if no

CAPITAL GAINS TAX

The Recto and Maceda Laws

February 20, 2011 at 12:14 AM

February 25, 2011 at 5:42 PM

<img src="http://2.bp.blogspot.com/OWybwJSpsug/Tk0qtWpR5NI/AAAAAAAAABU/xnfg6ZhCx4/s35/manny_112209.jpg" width="35" height="35" class="photo" alt="">

330 Sen Gil Puyat Ave.

miss patty said...

Alexander C. Bobis said...

Pinoy Tagabantay said...

Pinoy Tagabantay said...

Ma. Arrilu said...

Sheila Carrillo said...

Alexis Ferr said...

July 23, 2012 at 10:55 PM

turvan gross said...

This comment has been removed by the author.

turvan gross said...

Maraming salamat po.

Anthony Gutierrez said...

marco polo said...

purchae of lot. so it really a commercial lot? so there is no issue of VAT?

Steven Plan said...

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