Republic Act No.

6552 | The Realty Installment Buyer Protection Act

This law deals primarily with one’s rights as a real estate investor or a real estate buyer paying in installments. It also
describes the rights of a buyer defaulting in payments for such purchases.

Section 2 of the Maceda Law that the protection of buyers of real estate on installment payments against onerous and
oppressive conditions is declared a public policy. The law is on the side of the homebuyers should there be any
misdemeanor committed on the side of the developer or seller.

Who is covered by the Maceda Law?

2 types of “qualified buyers” are afforded protection:

Section 3: One who has paid at least 2 years of installments in all transactions or contracts involving the sale or financing
of real estate on installment payments. Properties covered include residential condominiums, apartments, houses,
townhouses, and house and lots, among others, but excluding industrial lots, commercial buildings, and sales of properties
to existing tenants.

Section 4: One who has purchased any of the properties enumerated above, but who has paid less than two years of
installments.

What are the guarantees of borrowers who fall behind in making payments or should the contract be canceled?

Section 3: Buyers are entitled to a refund, as well as grace periods, so long as they have paid for at least two years.

On defaulting: Buyers who default on their payments of installments are entitled to pay, without additional interest, the
unpaid installments due within the total grace period they have earned. This total grace period has been fixed at the rate
of a one-month grace period for every one (1) year of installment payments made. However, this right can only be
exercised by the buyer once in every five years of the life of the contract and its extensions.

On contract cancellation: If the contract is canceled, the seller shall refund to the buyer the cash surrender value of the
payments on the property, which is equivalent to 50 percent of the total payments made. After five years of installments,
an additional five percent for every year of payments will be added, but not to exceed 90 percent of the total payments
made. For this to apply, the actual cancellation of the contract must take place 30 days after receipt by the buyer of the
notice of cancellation. This notice of cancellation or a demand for rescission at that must be by a notarial act and upon
the full payment of the aforementioned cash surrender value to the buyer.

What are the guarantees if the borrower just paid less than two years of installments?

Section 4: States that the buyer is entitled to a grace period of not less than 60 days. This is counted from the date the
installment became due.

The seller, on the other hand, is entitled to the cancellation of the contract, if the buyer fails to pay the installments due
at the end of the grace period. The seller, however, must first notify the buyer of the cancellation, or of the demand for
rescission of the contract. This notice or demand must be by a notarial act and shall only render the cancellation or
rescission effective 30 days after such notice or demand has been made.

Can the buyer sell or assign his rights to the property to another person?

Section 5: Those buyers covered by Sections 3 and 4 have the right to sell or assign their rights over the property to another
person. They may also reinstate the contract if they so choose by updating the account during the given grace period. This
transaction, however, must be made prior to the actual cancellation of the contract. The corresponding deed of sale or
assignment must be done by notarial act.

Can the borrower opt to pay off his balance ahead of the due date? Will he be allowed to do so without incurring the
corresponding interests?
Section 6: Stated that buyers shall have the right to pay in advance any of the installments or the full unpaid balance of
the property’s purchase price. This can be done any time without incurring interest. This full payment may also be
annotated in the certificate of title over the property.

What if the contract entered into are inconsistent with existing laws? Which will have more bearing?

Ordinarily, the Constitution would tell us that no law impairing the obligations of contracts shall be passed, but in this
case, the Maceda Law, under Section 7, provides that any stipulation in any contract that is contrary to Sections 3, 4, 5,
and 6 are to be deemed null and void. This particular provision serves to protect those who may have overlooked the fine
prints of contracts during signing that has been required by real estate contractors or developers.

In relation to this, should the developers be, in any possible way, at fault – in terms of delays, damages, among others –
the provisions of the Presidential Decree No. 957 or the Revised Rules and Regulations Implementing the Subdivision and
Condominium Buyer’s Protective Decree may instead be explored and applied.

Does the Maceda Law apply when I pay through a housing loan from a bank?

This is where the common misconception usually lies in terms of the coverage of the Maceda Law.

To provide a quick background, developers nowadays merely require that the buyer pay a down payment, which
constitutes a percentage of the purchase price. The remaining balance would then often be shouldered by a financing
scheme (usually a housing loan) that may be provided by commercial banks, Pag-IBIG Fund, by the developers themselves
through their in-house financing schemes, or by other financing institutions.

If you are taking a housing loan from a bank like most people, this means that the balance that you have to pay the real
estate developer has already been paid for in full by the bank through the loan. In other words, you, in essence, have
already paid the purchase price in full by availing of the loan. The subsequent monthly payments you now make to the
bank are not to pay for the balance of the purchase price, but for the loan itself, the interests accruing on the principal
loan, and the charges that may be or may have been incurred.

Hence, having been fully paid insofar as the purchase price is concerned, the only balance you are liable for is that of the
loan, and since you are not exactly paying in installments anymore, considering that the property is technically fully paid
for, RA 6552 or the Maceda Law would no longer apply.

Republic Act No. 4726 | The Condominium Act (June 18, 1996)

Definition of Terms:

(a) "Condominium" means a condominium as defined in the next preceding section.

(b) "Unit" means a part of the condominium project intended for any type of independent use or ownership, including
one or more rooms or spaces located in one or more floors (or part or parts of floors) in a building or buildings and such
accessories as may be appended thereto.

(c) "Project" means the entire parcel of real property divided or to be divided in condominiums, including all structures
thereon,

(d) "Common areas" means the entire project excepting all units separately granted or held or reserved.

(e) "To divide" real property means to divide the ownership thereof or other interest therein by conveying one or more
condominiums therein but less than the whole thereof.

A condominium, according to the law, is an “interest in a real property consisting of a separate interest in a unit in a
residential, industrial, or commercial building and an undivided interest in common, directly or indirectly, in the land in
which it is located and in other common areas of the building.”
In other words, a condominium is a building where sections of which can be owned individually by a person or, in some
cases, a corporation. This can be for either a residential, industrial, or commercial purpose.

Who can own condominiums?

Filipino citizens and corporations can own condominiums. Foreigners, however, are restricted to owning no more than 40
percent of the total and outstanding capital stock of a corporation, which must be Filipino-owned and controlled. In
addition to that restriction, foreigners and foreign corporations are, by law, prohibited to own land.

What is my stake in a condominium?

As a unit owner, you are, in essence, a co-owner of the condominium, entitled to such privileges and limited by such
restrictions that may follow the title.

What forms part of a condominium unit?

Everything within the boundaries of your unit forms part of the same. According to the law, the interior surfaces of the
perimeter walls, floors, ceilings, windows, and doors form the boundary of your unit. That is, of course, unless the master
deed or the declaration of restrictions prescribed by the condominium corporation or the administration stipulate
otherwise.

Am I allowed to alter anything beyond the boundaries of my unit?

Generally, no. However, if the administration allows such alteration or does not prohibit the same, then you may be
allowed to. A thorough read of the house rules or the contract would be a good idea.

What does not form part of the condominium unit?

In most cases, areas that are not found inside the unit are deemed to be excluded from the unit but the condominium law
itself lists aspects of properties that generally do not form part of the unit. To wit: “bearing walls, columns, floors, roofs,
foundations, and other common structural elements (e.g., lobbies, stairways, hallways, and other common areas),
elevator equipment and shafts, central heating, central refrigeration, and central air-conditioning equipment, reservoirs,
tanks, pumps, and other central services and facilities, pipes, ducts, flutes, chutes, conduits, wires, and other utility
installations, wherever located.” An exception to the list is those outlets that are located within the unit.

Can I freely sell my unit?

Yes. That is not prohibited in the condominium law. When you sell your unit, however, you are not just selling the unit
itself, you are also selling your interest in the common areas, as well as your membership and shareholdings in the
condominium corporation.

Can I freely sell my condominium?

Not exactly. Selling a unit may be simple, but selling a condominium is restricted by certain rules under the Condominium
Act. One of such restrictions is the ownership requirement. For condominiums where the common areas are co-owned by
the owners of the units, the law requires that the purchaser be either a Filipino citizen or corporation—a corporation that
is at least 60 percent owned and controlled by Filipinos. For condominiums owned by corporations, the sale will be
deemed invalid if such a sale would result in the foreign interest in the corporation exceeding the limits prescribed by law,
which in this case, is 40 percent. In other words, in both cases, the foreign ownership in the purchasing corporation cannot
exceed 40 percent, otherwise, the sale would be invalid.

Can I mortgage my unit for a loan?

Yes. The condominium law states that “each condominium owner shall have the exclusive right to mortgage, pledge, or
encumber his condominium and to have the same appraised independently of the other condominium owner is personal
to him.”
Can the condominium corporation sell the condominium without my consent?

As a general rule, it can. However, if the master deed contains a requirement that the property should first be offered to
the other condominium owners within a reasonable time before offering it to third parties, then it may not.

Another restriction, however, is one that has been amended to the Corporation Code by Republic Act No. 7899, which
states that, as an owner, you shall not sell, exchange, lease, or otherwise dispose of the common areas of a condominium
without the approval of the simple majority of the registered owners, subject as well, to the approval of the Housing and
Land Use Regulatory Board (HLURB).

The Condominium Act stipulates that the owners can sell the condominium after 50 years. Does that mean that I will
not have any say in the sale?

No, that is not the case. Upon turnover of the unit to you, you become a member of the corporation that owns the
condominium. Hence, your concurrence or dissent on the matter will count. If, however, it has been decided that the
building shall be sold, then you will be compensated for your appropriate share from the proceeds of the sale.

Who owns the common areas in a condominium?

Generally, titles to the common areas are held by a corporation formed for the purpose. However, the condominium law
also states that the common areas are held in common by the unitholders, in equal share for each unit.

What are my rights as a condominium unit owner?

Aside from those already mentioned, the only other right you have as a unit owner is the right to renovate your unit, for
as long as all renovations are done within the boundaries of your unit. All restrictions on your rights and activities are
those that are stipulated in the declaration of restrictions or on the contract you signed upon the turnover of the unit to
you.

I own a condominium building, and I want to amend or revoke the master deed. May I do so without reservation?

No. The Condominium Act states that you can only do this upon the registration of an instrument (a formal legal document)
executed by a simple majority of the registered owners of the property. In this case, a simple majority could mean either
of the two: a majority based on per-unit ownership or a majority based on the floor area of ownership.

For condominiums used for either residential or commercial purposes, the former would apply, while if it is for a mix of
both purposes, it is the latter. This requirement also stipulates that the registered owners must be notified in advance.
Evidence of a vote of a simple majority must also be submitted to the HLURB.