ACCLAW3-C QUIZ

1. What are the differences between Recto Law (Art. 1484 of the Civil Code) and Maceda
Law (R.A. No. 6552)? Clearly distinguish the two.

- Recto Law and Maceda Law are civil code that concerns and addresses issues with
governing the sale of property by installment basis.

Recto Law, also known as the Installment Sales Law, focuses on protecting its property
investors from misappropriation in the event that a buyer is unable to make additional
payments on a property that was initially designed for those who were interested in
purchasing personal assets in installments rather than just leasing out the personal
property, the agreement stated that it would be purchased following the alleged
completion of the contractual obligations. Recto Law affects the buyer and seller of
personal property. As the lessor and lessee, the parties may also be referred to in
specific cases. Personal property mortgages, as well as various transactions between a
mortgagor and the mortgagee, may be controlled by this regulation. This does not apply
to direct transactions in which a down payment has been made and a payment process
has been agreed upon.

If the Recto Law is violated, the seller may face the same consequences as the buyer,
which means the seller cannot attempt to collect any further payments if a buyer
previously returned their personal item to them. In the event of any misuse, the buyer
may be forced to incur extra costs, which are most likely to be reimbursed by a seller
who made a mistake.

However,the Maceda Law, also known as the Realty Installment Buyer Act of the
Philippines, protects its real estate investors and buyers who pay for their real estate in
installments. Buyers who do not make payments on such transactions are also
protected by this section, which explains their rights.

The protection of purchasers of real estate on installment plans from onerous and
repressive circumstances is to be declared as a national policy under Section 2 of RA
6552. A buyer's right to protection exists for two separate categories of people. A
qualified buyer is one who has paid at least two years of payments in all transactions or
contracts involving the sale or financing of real estate on installments, according to RA
6552. The assets include condominiums, apartments, and residences, but not industrial
areas, commercial structures, or sales of properties to present tenants.
2. Give an example as to how a buyer may avail the remedy provided under Maceda
Law.

Contract purchasers who fall behind on their installment payments are allowed to pay
the unpaid installments due. You can have a one-month time frame for every one (1)
year of installment payments completed; however, this entitlement can only be used
once per five years of the contract's term. If the contract is canceled, the seller is
expected to return the buyer the cash equivalent to 50% of the total payments made.
After five years of installments, an additional 5% for each payment year will be applied,
although this cannot exceed 90% of the total payments made. The contract can be
cancelled in writing 30 days after the buyer receives the notification of cancellation.

Buyers may wish to keep as much cash as possible in times of crisis, such as current
epidemic. Fortunately, the Maceda Law allows you a two-month grace period if you
have previously completed two years of installment payments. Only those who have
paid at least two years of installments on Maceda Law transactions are entitled for a
return of the down deposit.

3. Under P.D. No. 957 or otherwise known as Subdivision and Condominium Buyers
Protective Decree, in what cases does the Housing and Land Use Regulatory Board
exercise jurisdiction?

- The purpose of this Decree is to regulate the sale of subdivision lots and condos and to
provide penalties for infractions. It specifies the National Housing Authority's authority
to regulate the real estate trade and commerce, as well as issues concerning project
registration. The regulatory bodies are in charge of public safety, standards of practice,
disciplinary concerns, quality assurance, and competency maintenance.

According to this decree, the registered owner of a parcel of land who wishes to convert
it into a subdivision project must submit his subdivision plan to the Authority, which
must act on and approve the plan if it is found to comply with the Subdivision Standards
and Regulations in effect at the time the plan is submitted. The owner or dealer to
whom a registration certificate has been issued shall not be entitled to sell any
subdivision lot or condominium unit in the registered project unless he has first secured
a license to sell the project. The Act also specifies registration processes and the
conditions for obtaining a sales license.
References:

Subdivision and Condominium Buyers Protective Decree (Presidential Decree No. 957) |
UrbanLex
https://urbanlex.unhabitat.org/law/138#:~:text=This%20Decree%20aims%20at
%20regulating,regarding%20the%20registration%20of%20projects.

Maceda Law Significance to Homebuyers | Property Investment

https://www.lumina.com.ph/news-and-blogs/blogs/maceda-law-and-its-significance-to-
homebuyers/

MACEDA LAW SIMPLIFIED: Buyer’s Rights and What It Covers

https://www.themedian.com.ph/maceda-law-simplified-buyers-rights-and-what-it-covers/

Maceda Law and Recto Law | Real Estate Laws | Lumina Homes
https://www.lumina.com.ph/news-and-blogs/blogs/maceda-law-and-recto-law-difference/