RA 4726 June 18, 1966 e) Statement of the purposes for which the building or

AN ACT TO DEFINE CONDOMINIUM, ESTABLISH buildings and each of the units are intended or
REQUIREMENTS FOR ITS CREATION, AND GOVERN ITS restricted as to use;
INCIDENTS. f) A certificate of the registered owner of the
property, if he is other than those executing the master
Sec. 1. The short title of this Act shall be "The Condominium deed, as well as of all registered holders of any lien or
Act". encumbrance on the property, that they consent to the
Sec. 2. A condominium is an interest in real property consisting registration of the deed;
of separate interest in a unit in a residential, industrial or g) The following plans shall be appended to the deed as
commercial building and an undivided interest in common, integral parts thereof:
directly or indirectly, in the land on which it is located and in other - A survey plan of the land included in the project,
common areas of the building. unless a survey plan of the same property had
- A condominium may include, in addition, a separate previously be filed in said office;
interest in other portions of such real property. Title to - A diagrammatic floor plan of the building or
the common areas, including the land, or the buildings in the project, in sufficient detail to identify
appurtenant interests in such areas, may be held by a each unit, its relative location and approximate
corporation specially formed for the purpose dimensions;
(hereinafter known as the "condominium corporation") h) Any reasonable restriction not contrary to law, morals
in which the holders of separate interest shall or public policy regarding the right of any condominium
automatically be members or shareholders, to the owner to alienate or dispose of his condominium.
exclusion of others, in proportion to the appurtenant
interest of their respective units in the common areas. The enabling or master deed may be amended or revoked upon
- The real right in condominium may be ownership or any registration of an instrument executed by the registered owner
other interest in real property recognized by law, on or owners of the property and consented to by all registered
property in the Civil Code and other pertinent laws. holders of any lien or encumbrance on the land or building or
portion thereof. The term "registered owner" shall include the
Sec. 3. As used in this Act, unless the context otherwise registered owners of condominiums in the project. Until
requires: registration of a revocation, the provisions of this Act shall
a) "Condominium" - a condominium as defined in the next continue to apply to such property.
preceding section.
b) "Unit" - a part of the condominium project intended for any Sec. 5. Any transfer or conveyance of a unit or an apartment,
type of independent use or ownership, including one or office or store or other space therein, shall include the transfer
more rooms or spaces located in one or more floors (or part or conveyance of the undivided interests in the common areas
or parts of floors) in a building or buildings and such or, in a proper case, the membership or shareholdings in the
accessories as may be appended thereto. condominium corporation:
c) "Project" - the entire parcel of real property divided or to Provided, however, That where the common areas in the
be divided in condominiums, including all structures condominium project are owned by the owners of separate
thereon, units as co-owners thereof no condominium unit therein
d) "Common areas" - the entire project excepting all units shall be conveyed or transferred to persons other than Filipino
separately granted or held or reserved. citizens, or corporations at least 60% of the capital stock of
e) "To divide" - real property means to divide the ownership which belong to Filipino citizens, except in cases of
thereof or other interest therein by conveying one or more hereditary succession.
condominiums therein but less than the whole thereof. Where the common areas in a condominium project are held by
a corporation, no transfer or conveyance of a unit shall be valid
Sec. 4. The provisions of this Act shall apply to property divided if the concomitant transfer of the appurtenant membership or
or to be divided into condominiums only: stockholding in the corporation will cause the alien interest in
1) if there shall be recorded in the Register of Deeds of the such corporation to exceed the limits imposed by existing laws.
province or city in which the property lies and
2) duly annotated in the corresponding certificate of title of the Sec. 6. Unless otherwise expressly provided in the enabling or
land, if the latter had been patented or registered under master deed or the declaration of restrictions, the INCIDENTS
either the Land Registration or Cadastral Acts OF A CONDOMINIUM GRANT are as follows:
a) The boundary of the unit granted are the interior surfaces
An ENABLING OR MASTER DEED which shall contain, of the perimeter walls, floors, ceilings, windows and
among others, the following: doors thereof.
a) Description of the land on which building or buildings The following are not part of the unit bearing walls, columns,
and improvements are or are to be located; floors, roofs, foundations and other common structural
b) Description of the building or buildings, stating the elements of the building; lobbies, stairways, hallways, and
number of stories and basements, the number of units other areas of common use, elevator equipment and shafts,
and their accessories, if any; central heating, central refrigeration and central air-
c) Description of the common areas and facilities; conditioning equipment, reservoirs, tanks, pumps and other
d) A statement of the exact nature of the interest central services and facilities, pipes, ducts, flues, chutes,
acquired or to be acquired by the purchaser in the conduits, wires and other utility installations, wherever
separate units and in the common areas of the located, except the outlets thereof when located within the
condominium project. unit.
- Where title to or the appurtenant interests in the b) There shall pass with the unit, as an appurtenance thereof,
common areas is or is to be held by a condominium an exclusive easement for the use of the air space
corporation, a statement to this effect shall be included; encompassed by the boundaries of the unit as it exists at
any particular time and as the unit may lawfully be altered
or reconstructed from time to time. Such easement shall be
 automatically terminated in any air space upon destruction Such liens, unless otherwise provided, may be enforced by any
of the unit as to render it untenantable. condominium owner in the project or by the management
c) Unless otherwise, provided, the common areas are held body of such project. The Register of Deeds shall enter and
in common by the holders of units, in equal shares, one annotate the declaration of restrictions upon the certificate of
for each unit. title covering the land included within the project, if the land is
d) A non-exclusive easement for ingress, egress and patented or registered under the Land Registration or Cadastral
support through the common areas is appurtenant to each Acts.
unit and the common areas are subject to such
easements. The DECLARATION OF RESTRICTIONS shall provide for:
e) Each condominium owner shall have the exclusive right The management of the project by anyone of the following
to paint, repaint, tile, wax, paper or otherwise refinish management bodies:
and decorate the inner surfaces of the walls, ceilings, - a condominium corporation,
floors, windows and doors bounding his own unit. - an association of the condominium owners,
f) Each condominium owner shall have the exclusive right - a board of governors elected by condominium owners
to mortgage, pledge or encumber his condominium and - a management agent elected by the owners or by the
to have the same appraised independently of the other board named in the declaration.
condominiums but any obligation incurred by such It shall also provide for voting majorities quorums, notices,
condominium owner is personal to him. meeting date, and other rules governing such body or
g) Each condominium owner has also the absolute right to bodies.
sell or dispose of his condominium unless the master May also provide:
deed contains a requirement that the property be first A. As to any such management body;
offered to the condominium owners within a reasonable 1) For the powers thereof, including power to enforce the
period of time before the same is offered to outside parties; provisions of the declarations of restrictions;
2) For maintenance of insurance policies, insuring
Sec. 7. Except as provided in the following section, the condominium owners against loss by fire, casualty,
common areas shall remain undivided, and there shall be no liability, workmen's compensation and other insurable
judicial partition thereof. risks, and for bonding of the members of any
management body;
Sec. 8. Where several persons own condominiums in a 3) Provisions for maintenance, utility, gardening and
condominium project, an action may be brought by one or other services benefiting the common areas, for the
more such persons for partition thereof by sale of the entire employment of personnel necessary for the operation
project, as if the owners of all of the condominiums in such of the building, and legal, accounting and other
project were co-owners of the entire project in the same professional and technical services;
proportion as their interests in the common areas: 4) For purchase of materials, supplies and the like
Provided, however, That a partition shall be made only upon a needed by the common areas;
showing: 5) For payment of taxes and special assessments
a) That 3 years after damage or destruction to the project which would be a lien upon the entire project or
which renders material part thereof unit for its use prior common areas, and for discharge of any lien or
thereto, the project has not been rebuilt or repaired encumbrance levied against the entire project or the
substantially to its state prior to its damage or destruction, common areas;
or 6) For reconstruction of any portion or portions of any
b) That damage or destruction to the project has rendered damage to or destruction of the project;
one-half or more of the units therein untenantable and that 7) The manner for delegation of its powers;
condominium owners holding in aggregate more than thirty 8) For entry by its officers and agents into any unit
percent interest in the common areas are opposed to repair when necessary in connection with the maintenance
or restoration of the project; or or construction for which such body is responsible;
c) That the project has been in existence in excess of fifty 9) For a power of attorney to the management body to
years, that it is obsolete and uneconomic, and that sell the entire project for the benefit of all of the
condominium owners holding in aggregate more than fifty owners thereof when partition of the project may be
percent interest in the common areas are opposed to repair authorized under Sec.8 of this Act, which said power
or restoration or remodeling or modernizing of the project; shall be binding upon all of the condominium owners
d) That the project or a material part thereof has been regardless of whether they assume the obligations of
condemned or expropriated and that the project is no longer the restrictions or not.
viable, or that the condominium owners holding in B. The manner and procedure for amending such
aggregate more than seventy percent interest in the restrictions: Provided, That the vote of not less than a
common areas are opposed to continuation of the majority in interest of the owners is obtained.
condominium regime after expropriation or condemnation C. For independent audit of the accounts of the
of a material portion thereof; or management body;
e) That the conditions for such partition by sale set forth in the D. For reasonable assessments to meet authorized
declaration of restrictions, duly registered in accordance expenditures, each condominium unit to be assessed
with the terms of this Act, have been met. separately for its share of such expenses in proportion
(unless otherwise provided) to its owners fractional interest
Sec. 9. The owner of a project shall, prior to the conveyance of in any common areas;
any condominium therein, REGISTER A DECLARATION OF E. For the subordination of the liens securing such
RESTRICTIONS relating to such project which restrictions assessments to other liens either generally or specifically
- shall constitute a lien upon each condominium in described;
the project F. For conditions, other than those provided for in Sec. 8 & 13
- shall insure to and bind all condominium owners in the of this Act, upon which partition of the project and
project. dissolution of the condominium corporation may be made.
 Such right to partition or dissolution may be conditioned c) That the project has been in existence in excess of fifty
upon failure of the condominium owners to rebuild within a years, that it is obsolete and uneconomical, and that more
certain period or upon specified inadequacy of insurance than 50% of the members of the corporation, if non-stock,
proceeds, or upon specified percentage of damage to the or the stockholders representing more than fifty percent of
building, or upon a decision of an arbitrator, or upon any the capital stock entitled to vote, if a stock corporation, are
other reasonable condition. opposed to the repair or restoration or remodeling or
modernizing of the project; or
Sec. 10. Whenever the common areas in a condominium d) That the project or a material part thereof has been
project are held by a condominium corporation, such condemned or expropriated and that the project is no longer
corporation shall constitute the management body of the viable, or that the members holding in aggregate more than
project. seventy percent interest in the corporation, if non-stock, or
The corporate purposes of such a corporation shall be the stockholders representing more than seventy percent of
limited to the holding of the common areas, either in the capital stock entitled to vote, if a stock corporation, are
ownership or any other interest in real property recognized opposed to the continuation of the condominium regime
by law, to the management of the project, and to such other after expropriation or condemnation of a material portion
purposes as may be necessary, incidental or convenient to thereof; or
the accomplishment of said purposes. e) That the conditions for such a dissolution set forth in the
The ARTICLES OF INCORPORATION OR BY-LAWS OF declaration of restrictions of the project in which the
THE CORPORATION shall not contain any provision corporation owns of holds the common areas, have been
contrary to or inconsistent with the provisions of this Act, met.
the enabling or master deed, or the declaration of
restrictions of the project. Sec. 14. The condominium corporation may also be dissolved
Membership in a condominium corporation, regardless of by the affirmative vote of all the stockholders or members
whether it is a stock or non-stock corporation, shall not be thereof at a general or special meeting duly called for the
transferable separately from the condominium unit of purpose: Provided, That all the requirements of Section sixty-
which it is an appurtenance. When a member or two of the Corporation Law are complied with.
stockholder ceases to own a unit in the project in which the
condominium corporation owns or holds the common Sec. 15. Unless otherwise provided for in the declaration of
areas, he shall automatically cease to be a member or restrictions upon voluntary dissolution of a condominium
stockholder of the condominium corporation. corporation in accordance with the provisions of Sections 13 &
14 of this Act, the corporation shall be deemed to hold a
Sec. 11. The term of a condominium corporation shall be co- power of attorney from all the members or stockholders to
terminus with the duration of the condominium project, the sell and dispose of their separate interests in the project and
provisions of the Corporation Law to the contrary liquidation of the corporation shall be effected by a sale of the
notwithstanding. entire project as if the corporation owned the whole thereof,
subject to the rights of the corporate and of individual
DISSOLUTION condominium creditors.
Sec. 12. In case of involuntary dissolution of a condominium
corporation for any of the causes provided by law, the common Sec. 16. A condominium corporation shall not, during its
areas owned or held by the corporation shall, by way of existence, sell, exchange, lease or otherwise dispose of the
liquidation, be transferred pro-indiviso and in proportion to common areas owned or held by it in the condominium
their interest in the corporation to the members or project unless authorized by the affirmative vote of all the
stockholders thereof, subject to the superior rights of the stockholders or members.
corporation creditors. Such transfer or conveyance shall be
deemed to be a full liquidation of the interest of such members Sec. 17. Any provision of the Corporation Law to the contrary
or stockholders in the corporation. After such transfer or notwithstanding, the by-laws of a condominium corporation
conveyance, the provisions of this Act governing undivided co- shall provide that a stockholder or member shall not be
ownership of, or undivided interest in, the common areas in entitled to demand payment of his shares or interest in
condominium projects shall fully apply. those cases where such right is granted under the
Corporation Law unless he consents to sell his separate
Sec. 13. Until the enabling or the master deed of the project in interest in the project to the corporation or to any purchaser of
which the condominium corporation owns or holds the common the corporation's choice who shall also buy from the corporation
area is revoked, the corporation shall not be voluntarily the dissenting member or stockholder's interest. In case of
dissolved through an action for dissolution under Rule 104 disagreement as to price, the procedure set forth in the
of the Rules of Court except upon a showing: appropriate provision of the Corporation Law for valuation of
a) That 3 years after damage or destruction to the project in shares shall be followed. The corporation shall have two years
which the corporation owns or holds the common areas, within which to pay for the shares or furnish a purchaser of its
which damage or destruction renders a material part thereof choice from the time of award. All expenses incurred in the
unfit for its use prior thereto, the project has not been rebuilt liquidation of the interest of the dissenting member or
or repaired substantially to its state prior to its damage or stockholder shall be borne by him.
destruction; or
b) That damage or destruction to the project has rendered Sec. 18. Upon registration of an instrument conveying a
one-half or more of the units therein untenantable and that condominium, the Register of Deeds shall, upon payment of
more than thirty percent of the members of the corporation, the proper fees, enter and annotate the conveyance on the
if non-stock, or the shareholders representing more than certificate of title covering the land included within the
thirty percent of the capital stock entitled to vote, if a stock project and the transferee shall be entitled to the issuance of
corporation, are opposed to the repair or reconstruction of a "condominium owner's" copy of the pertinent portion of such
the project, or certificate of title.
 Said "condominium owner's" copy need not reproduce the shall have power to bid at foreclosure sale. The
ownership status or series of transactions in force or condominium owner shall have the same right of
annotated with respect to other condominiums in the redemption as in cases of judicial or extra-judicial
project. foreclosure of mortgages.
A copy of the description of the land, a brief description of
the condominium conveyed, name and personal Sec. 21. No labor performed or services or materials
circumstances of the condominium owner would be furnished with the consent of or at the request of a
sufficient for purposes of the "condominium owner's" condominium owner or his agent or his contractor or
copy of the certificate of title. subcontractor, shall be the basis of a lien against the
No conveyance of condominiums or part thereof, condominium of any other condominium owner, unless such
subsequent to the original conveyance thereof from the other owners have expressly consented to or requested the
owner of the project, shall be registered unless performance of such labor or furnishing of such materials or
accompanied by a certificate of the management body of services. Such express consent shall be deemed to have been
the project that such conveyance is in accordance with the given by the owner of any condominium in the case of
provisions of the declaration of restrictions of such project. emergency repairs of his condominium unit. Labor performed or
services or materials furnished for the common areas, if duly
In cases of condominium projects registered under the authorized by the management body provided for in a
provisions of the Spanish Mortgage Law or Act 3344, as declaration of restrictions governing the property, shall be
amended, the registration of the deed of conveyance of a deemed to be performed or furnished with the express consent
condominium shall be sufficient if the Register of Deeds shall of each condominium owner. The owner of any condominium
keep the original or signed copy thereof, together with the may remove his condominium from a lien against two or more
certificate of the management body of the project, and return a condominiums or any part thereof by payment to the holder of
copy of the deed of conveyance to the condominium owner duly the lien of the fraction of the total sum secured by such lien
acknowledge and stamped by the Register of Deeds in the same which is attributable to his condominium unit.
manner as in the case of registration of conveyances of real
property under said laws. Sec. 22. Unless otherwise provided for by the declaration of
restrictions, the management body, provided for herein, may
Sec. 19. Where the enabling or master deed provides that the acquire and hold, for the benefit of the condominium
land included within a condominium project are to be owners, tangible and intangible personal property and may
owned in common by the condominium owners therein, the dispose of the same by sale or otherwise; and the beneficial
Register of Deeds may, at the request of all the condominium interest in such personal property shall be owned by the
owners and upon surrender of all their "condominium owner's" condominium owners in the same proportion as their
copies, cancel the certificates of title of the property and respective interests in the common areas. A transfer of a
issue a new one in the name of said condominium owners condominium shall transfer to the transferee ownership of the
as pro-indiviso co-owners thereof. transferor's beneficial interest in such personal property.

Sec. 20. An assessment upon any condominium made in Sec. 23. Where, in an ACTION FOR PARTITION of a
accordance with a duly registered declaration of restrictions condominium project or for the DISSOLUTION OF
shall be an obligation of the owner thereof at the time the CONDOMINIUM corporation on the ground that the project or a
assessment is made. material part thereof has been condemned or expropriated, the
The amount of any such assessment plus any other Court finds that the conditions provided for in this Act or in the
charges thereon, such as interest, costs (including declaration of restrictions have not been met, the Court may
attorney's fees) and penalties, as such may be provided decree a reorganization of the project, declaring which
for in the declaration of restrictions, shall be and become portion or portions of the project shall continue as a
a lien upon the condominium assessed when the condominium project, the owners thereof, and the respective
management body causes a notice of assessment to be rights of said remaining owners and the just compensation, if
registered with the Register of Deeds of the city or any, that a condominium owner may be entitled to due to
province where such condominium project is located. deprivation of his property. Upon receipt of a copy of the decree,
NOTICE shall state: the Register of Deeds shall enter and annotate the same on the
- the amount of such assessment and pertinent certificate of title.
- such other charges thereon a may be authorized by the
declaration of restrictions, Sec. 24. Any deed, declaration or plan for a condominium
- a description of the condominium unit against which project shall be liberally construed to facilitate the operation of
same has been assessed the project, and its provisions shall be presumed to be
- the name of the registered owner thereof. independent and severable.
Such notice shall be signed by an authorized representative of
the management body or as otherwise provided in the Sec. 25. Whenever real property has been divided into
declaration of restrictions. Upon payment of said assessment condominiums, each condominium separately owned shall
and charges or other satisfaction thereof, the management body be separately assessed, for purposes of real property taxation
shall cause to be registered a release of the lien. and other tax purposes to the owners thereof and the tax on
Such lien shall be superior to all other liens registered each such condominium shall constitute a lien solely thereon.
subsequent to the registration of said notice of assessment
except real property tax liens and except that the Sec. 26. All Acts or parts of Acts in conflict or inconsistent with
declaration of restrictions may provide for the subordination this Act are hereby amended insofar as condominium and its
thereof to any other liens and encumbrances. incidents are concerned.
Such liens may be enforced in the same manner provided
for by law for the judicial or extra-judicial foreclosure of Sec. 27. This Act shall take effect upon its approval.
mortgages of real property. Unless otherwise provided for Approved: June 18, 196
in the declaration of restrictions, the management body
 PRESIDENTIAL DECREE No. 957 July 12, 1976 d) "Subdivision project" shall mean a tract or a parcel of land
REGULATING THE SALE OF SUBDIVISION LOTS AND registered under Act No. 496 which is partitioned primarily
CONDOMINIUMS, PROVIDING PENALTIES FOR for residential purposes into individual lots with or without
VIOLATIONS THEREOF improvements thereon, and offered to the public for sale, in
cash or in installment terms. It shall include all residential,
WHEREAS, it is the policy of the State to afford its inhabitants commercial, industrial and recreational areas as well as
the requirements of decent human settlement and to provide open spaces and other community and public areas in the
them with ample opportunities for improving their quality of life; project.
WHEREAS, numerous reports reveal that many real estate e) "Subdivision lot" shall mean any of the lots, whether
subdivision owners, developers, operators, and/or sellers have residential, commercial, industrial, or recreational, in a
reneged on their representations and obligations to provide and subdivision project.
maintain properly subdivision roads, drainage, sewerage, water f) "Complex subdivision plan" shall mean a subdivision
systems, lighting systems, and other similar basic requirements, plan of a registered land wherein a street, passageway or
thus endangering the health and safety of home and lot buyers; open space is delineated on the plan.
WHEREAS, reports of alarming magnitude also show cases of g) "Condominium project" shall mean the entire parcel of
swindling and fraudulent manipulations perpetrated by real property divided or to be divided primarily for residential
unscrupulous subdivision and condominium sellers and purposes into condominium units, including all structures
operators, such as failure to deliver titles to the buyers or titles thereon.
free from liens and encumbrances, and to pay real estate taxes, h) "Condominium unit" shall mean a part of the
and fraudulent sales of the same subdivision lots to different condominium project intended for any type of independent
innocent purchasers for value; use or ownership, including one or more rooms or spaces
WHEREAS, these acts not only undermine the land and housing located in one or more floors (or part of parts of floors) in a
program of the government but also defeat the objectives of the building or buildings and such accessories as may be
New Society, particularly the promotion of peace and order and appended thereto.
the enhancement of the economic, social and moral condition of i) "Owner" shall refer to the registered owner of the land
the Filipino people; subject of a subdivision or a condominium project.
WHEREAS, this state of affairs has rendered it imperative that j) "Developer" shall mean the person who develops or
the real estate subdivision and condominium businesses be improves the subdivision project or condominium project for
closely supervised and regulated, and that penalties be imposed and in behalf of the owner thereof.
on fraudulent practices and manipulations committed in k) "Dealer" shall mean any person directly engaged as
connection therewith. principal in the business of buying, selling or exchanging
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of real estate whether on a full-time or part-time basis.
the Philippines, by virtue of the powers vested in me by the l) "Broker" shall mean any person who, for commission or
Constitution, do hereby decree and order: other compensation, undertakes to sell or negotiate the sale
of a real estate belonging to another.
Title I m) "Salesman" shall refer to the person regularly employed by
TITLE AND DEFINITIONS a broker to perform, for and in his behalf, any or all functions
Section 1. Title. This Decree shall be known as THE of a real estate broker.
SUBDIVISION AND CONDOMINIUM BUYERS' PROTECTIVE n) "Authority" shall mean the National Housing Authority.
DECREE. Title II
REGISTRATION AND LICENSE TO SELL
Section 2. Definition of Terms When used in this Decree, the Section 3. National Housing Authority. The National Housing
following terms shall, unless the context otherwise indicates, Authority shall have exclusive jurisdiction to regulate the real
have the following respective meanings: estate trade and business in accordance with the provisions of
a) "Person" shall mean a natural or a juridical person. A this Decree.
juridical person refers to a business firm whether a
corporation, partnership, cooperative or associations or a Section 4. Registration of Projects. The registered owner of a
single proprietorship. parcel of land who wishes to convert the same into a subdivision
b) "Sale" or "sell" shall include every disposition, or attempt project shall submit his subdivision plan to the Authority which
to dispose, for a valuable consideration, of a subdivision lot, shall act upon and approve the same, upon a finding that the
including the building and other improvements thereof, if plan complies with the Subdivision Standards' and Regulations
any, in a subdivision project or a condominium unit in a enforceable at the time the plan is submitted. The same
condominium project. "Sale" and "sell" shall also include a procedure shall be followed in the case of a plan for a
contract to sell, a contract of purchase and sale, an condominium project except that, in addition, said Authority shall
exchange, an attempt to sell, an option of sale or purchase, act upon and approve the plan with respect to the building or
a solicitation of a sale, or an offer to sell, directly or by an buildings included in the condominium project in accordance
agent, or by a circular, letter, advertisement or otherwise. with the National Building Code (R.A. No. 6541).
- A privilege given to a member of a cooperative, The subdivision plan, as so approved, shall then be submitted
corporation, partnership, or any association and/or the to the Director of Lands for approval in accordance with the
issuance of a certificate or receipt evidencing or giving the procedure prescribed in Section 44 of the Land Registration Act
right of participation in, or right to, any land in consideration (Act No. 496, as amended by R.A. No. 440): Provided, that it
of payment of the membership fee or dues, shall be deemed case of complex subdivision plans, court approval shall no
a sale within the meaning of this definition. longer be required. The condominium plan as likewise so
c) The "buy" and "purchase" shall include any contract to approved, shall be submitted to the Register of Deeds of the
buy, purchase, or otherwise acquire for a valuable province or city in which the property lies and the same shall be
consideration a subdivision lot, including the building and acted upon subject to the conditions and in accordance with the
other improvements, if any, in a subdivision project or a procedure prescribed in Section 4 of the Condominium Act (R.A.
condominium unit in a condominium project. No. 4726).
The owner or the real estate dealer interested in the sale of lots by said owner or dealer and all the pertinent documents
or units, respectively, in such subdivision project or attached thereto, he is convinced that the owner or dealer is of
condominium project shall register the project with the Authority good repute, that his business is financially stable, and that the
by filing therewith a SWORN REGISTRATION STATEMENT proposed sale of the subdivision lots or condominium units to
containing the following information: the public would not be fraudulent.
a) Name of the owner; Section 6. Performance Bond. No license to sell subdivision
b) The location of the owner's principal business office, and if lots or condominium units shall be issued by the Authority under
the owner is a non-resident Filipino, the name and address Section 5 of this Decree unless the owner or dealer shall have
of his agent or representative in the Philippines is filed an adequate performance bond approved by said Authority
authorized to receive notice; to guarantee the construction and maintenance of the roads,
c) The names and addresses of all the directors and officers gutters, drainage, sewerage, water system, lighting systems,
of the business firm, if the owner be a corporation, and full development of the subdivision project or the
association, trust, or other entity, and of all the partners, if it condominium project and the compliance by the owner or dealer
be a partnership; with the applicable laws and rules and regulations.
d) The general character of the business actually transacted The performance bond shall be executed in favor of the Republic
or to be transacted by the owner; and of the Philippines and shall authorize the Authority to use the
e) A statement of the capitalization of the owner, including the proceeds thereof for the purposes of its undertaking in case of
authorized and outstanding amounts of its capital stock and forfeiture as provided in this Decree.
the proportion thereof which is paid-up. Section 7. Exempt transactions. A license to sell and
performance bond shall not be required in any of the following
The following documents shall be attached to the transactions:
REGISTRATION STATEMENT: (a) Sale of a subdivision lot resulting from the partition of land
(a) A copy of the subdivision plan or condominium plan as among co-owners and co-heirs.
approved in accordance with the first and second paragraphs of (b) Sale or transfer of a subdivision lot by the original purchaser
this section. thereof and any subsequent sale of the same lot.
(b) A copy of any circular, prospectus, brochure, advertisement, (c) Sale of a subdivision lot or a condominium unit by or for the
letter, or communication to be used for the public offering of the account of a mortgagee in the ordinary course of business when
subdivision lots or condominium units; necessary to liquidate a bona fide debt.
(c) In case of a business firm, a balance sheet showing the
amount and general character of its assets and liabilities and a Section 8. Suspension of license to sell. Upon verified
copy of its articles of incorporation or articles of partnership or complaint by a buyer of a subdivision lot or a condominium unit
association, as the case may be, with all the amendments in any interested party, the Authority may, in its discretion,
thereof and existing by-laws or instruments corresponding immediately suspend the owner's or dealer's license to sell
thereto. pending investigation and hearing of the case as provided in
(d) A title to the property which is free from all liens and Section 13 hereof.
encumbrances: Provided, however, that in case any subdivision The Authority may motu proprio suspend the license to sell if, in
lot or condominium unit is mortgaged, it is sufficient if the its opinion, any information in the registration statement filed by
instrument of mortgage contains a stipulation that the the owner or dealer is or has become misleading, incorrect,
mortgagee shall release the mortgage on any subdivision lot or inadequate or incomplete or the sale or offering for a sale of the
condominium unit as soon as the full purchase price for the subdivision or condominium project may work or tend to work a
same is paid by the buyer. fraud upon prospective buyers.
The person filing the registration statement shall pay the The suspension order may be lifted if, after notice and hearing,
registration fees prescribed therefor by the Authority. the Authority is convinced that the registration statement is
Thereupon, the Authority shall immediately cause to be accurate or that any deficiency therein has been corrected or
published a notice of the filing of the registration statement at supplemented or that the sale to the public of the subdivision or
the expense of the applicant-owner or dealer, in two condominium project will neither be fraudulent not result in
newspapers general circulation, one published in English and fraud. It shall also be lifted upon dismissal of the complaint for
another in Pilipino, once a week for two consecutive weeks, lack of legal basis.
reciting that a registration statement for the sale of subdivision Until the final entry of an order of suspension, the suspension of
lots or condominium units has been filed in the National Housing the right to sell the project, though binding upon all persons
Authority; that the aforesaid registration statement, as well as notified thereof, shall be deemed confidential unless it shall
the papers attached thereto, are open to inspection during appear that the order of suspension has in the meantime been
business hours by interested parties, under such regulations as violated.
the Authority may impose; and that copies thereof shall be
furnished to any party upon payment of the proper fees. Section 9. Revocation of registration certificate and license to
The subdivision project of the condominium project shall be sell. The Authority may, motu proprio or upon verified complaint
deemed registered upon completion of the above publication filed by a buyer of a subdivision lot or condominium unit, revoke
requirement. The fact of such registration shall be evidenced by the registration of any subdivision project or condominium
a registration certificate to be issued to the applicant-owner or project and the license to sell any subdivision lot or
dealer. condominium unit in said project by issuing an order to this
Section 5. License to sell. Such owner or dealer to whom has effect, with his findings in respect thereto, if upon examination
been issued a registration certificate shall not, however, be into the affairs of the owner or dealer during a hearing as
authorized to sell any subdivision lot or condominium unit in the provided for in Section 14 hereof, if shall appear there is
registered project unless he shall have first obtained a license satisfactory evidence that the said owner or dealer:
to sell the project within two weeks from the registration of such (a) Is insolvent; or
project. (b) has violated any of the provisions of this Decree or any
The Authority, upon proper application therefor, shall issue to applicable rule or regulation of the Authority, or any undertaking
such owner or dealer of a registered project a license to sell the of his/its performance bond; or
project if, after an examination of the registration statement filed
(c) Has been or is engaged or is about to engage in fraudulent In case of charges against a salesman, notice thereof shall also
transactions; or be given the broker or dealer employing such salesman.
(d) Has made any misrepresentation in any prospectus, Pending hearing of the case, the Authority shall have the power
brochure, circular or other literature about the subdivision to order the suspension of the dealer's, broker's, of salesman's
project or condominium project that has been distributed to registration; provided, that such order shall state the cause for
prospective buyers; or the suspension.
(e) Is of bad business repute; or The suspension or revocation of the registration of a dealer or
(f) Does not conduct his business in accordance with law or broker shall carry with it all the suspension or revocation of the
sound business principles. registrations of all his salesmen.
Where the owner or dealer is a partnership or corporation or an
unincorporated association, it shall be sufficient cause for Title IV
cancellation of its registration certificate and its license to sell, if PROCEDURE FOR REVOCATION OF REGISTRATION
any member of such partnership or any officer or director of such CERTIFICATE
corporation or association has been guilty of any act or omission Section 13. Hearing. In the hearing for determining the
which would be cause for refusing or revoking the registration of existence of any ground or grounds for the suspension and/or
an individual dealer, broker or salesman as provided in Section revocation of registration certificate and license to sell as
11 hereof. provided in Section 8 and 9 hereof, the following shall be
complied with:
Section 10. Registers of subdivision lots and condominium (a) Notice. No such hearing shall proceed unless the respondent
units. A record of subdivision lots and condominium units shall is furnished with a copy of the complaint against him or is notified
be kept in the Authority wherein shall be entered all orders of the in writing of the purpose of such hearing.
Authority affecting the condition or status thereof. The registers (b) Venue. The hearing may be held before the officer or officers
of subdivision lots and condominium units shall be open to public designated by the Authority on the date and place specified in
inspection subject to such reasonable rules as the Authority may the notice.
prescribe. (c) Nature of proceeding. The proceedings shall be non-litigious
and summary in nature without regard to legal technicalities
Title III obtaining in courts of law. The Rules of court shall not apply in
DEALERS, BROKERS AND SALESMEN said hearing except by analogy or in a suppletory character and
Section 11. Registration of dealers, brokers and salesmen. No whenever practicable and convenient.
real estate dealer, broker or salesman shall engage in the (d) Power incidental to the hearing. For the purpose of the
business of selling subdivision lots or condominium units unless hearing or other proceeding under this Decree, the officer or
he has registered himself with the Authority in accordance with officers designated to hear the complaint shall have the power
the provisions of this section. to administer oaths, subpoena witnesses, conduct ocular
If the Authority shall find that the applicant is of good repute and inspections, take depositions, and require the production of any
has complied with the applicable rules of the Authority, including book, paper, correspondence, memorandum, or other record
the payment of the prescribed fee, he shall register such which are deemed relevant or material to the inquiry
applicant as a dealer, broker or salesman upon filing a bond, or .
other security in lieu thereof, in such sum as may be fixed by the Section 14. Contempt.
Authority conditioned upon his faithful compliance with the (a) Direct contempt. The officer or officers designated by the
provisions of this Decree: Provided, that the registration of a Authority to hear the complaint may summarily adjudge in direct
salesman shall cease upon the termination of his employment contempt any person guilty of misbehavior in the presence of or
with a dealer or broker. so near the said hearing officials as to obstruct or interrupt the
Every registration under this section shall expire on the thirty- proceedings before the same or of refusal to be sworn or to
first day of December of each year. Renewal of registration for answer as a witness or to subscribe an affidavit or deposition
the succeeding year shall be granted upon written application when lawfully required to do so. The person found guilty of direct
therefor made not less than thirty nor more than sixty days contempt under this section shall be punished by a fine not
before the first day of the ensuing year and upon payment of the exceeding Fifty (P50.00) Pesos or imprisonment not exceeding
prescribed fee, without the necessity of filing further statements five (5) days, or both.
or information, unless specifically required by the Authority. All (b) Indirect contempt. The officer or officers designated to hear
applications filed beyond said period shall be treated as original the complaint may also adjudge any person in indirect contempt
applications. on grounds and in the manner prescribed in Rule 71 of the
The names and addresses of all persons registered as dealers, Revised Rules of Court.
brokers, or salesmen shall be recorded in a Register of Brokers,
Dealers and Salesmen kept in the Authority which shall be open Section 15. Decision. The case shall be decided within thirty
to public inspection. (30) days from the time the same is submitted for decision. The
Decision may order the revocation of the registration of the
Section 12. Revocation of registration as dealers, brokers or subdivision or condominium project, the suspension,
salesmen. Registration under the preceding section may be cancellation, or revocation of the license to sell and/or forfeiture,
refused or any registration granted thereunder, revoked by the in whole or in part, of the performance bond mentioned in
Authority if, after reasonable notice and hearing, it shall Section 6 hereof. In case forfeiture of the bond is ordered, the
determine that such applicant or registrant: Decision may direct the provincial or city engineer to undertake
1. Has violated any provision of this Decree or any rule or or cause the construction of roads and of other requirements for
regulation made hereunder; or the subdivision or condominium as stipulated in the bond,
2. Has made a material false statement in his application for chargeable to the amount forfeited. Such decision shall be
registration; or immediately executory and shall become final after the lapse of
3. Has been guilty of a fraudulent act in connection with any sale 15 days from the date of receipt of the Decision.
of a subdivision lot or condominium unit; or
4. Has demonstrated his unworthiness to transact the business Section 16. Cease and Desist Order. Whenever it shall appear
of dealer, broker, or salesman, as the case may be. to the Authority that any person is engaged or about to engage
in any act or practice which constitutes or will constitute a Section 21. Sales Prior to Decree. In cases of subdivision lots
violation of the provisions of this Decree, or of any rule or or condominium units sold or disposed of prior to the effectivity
regulation thereunder, it may, upon due notice and hearing as of this Decree, it shall be incumbent upon the owner or
provided in Section 13 hereof, issue a cease and desist order to developer of the subdivision or condominium project to complete
enjoin such act or practices. compliance with his or its obligations as provided in the
preceding section within two years from the date of this Decree
Section 17. Registration. All contracts to sell, deeds of sale and unless otherwise extended by the Authority or unless an
other similar instruments relative to the sale or conveyance of adequate performance bond is filed in accordance with Section
the subdivision lots and condominium units, whether or not the 6 hereof.
purchase price is paid in full, shall be registered by the seller in Failure of the owner or developer to comply with the obligations
the Office of the Register of Deeds of the province or city where under this and the preceding provisions shall constitute a
the property is situated. violation punishable under Sections 38 and 39 of this Decree.
Whenever a subdivision plan duly approved in accordance with
Section 4 hereof, together with the corresponding owner's Section 22. Alteration of Plans. No owner or developer shall
duplicate certificate of title, is presented to the Register of Deeds change or alter the roads, open spaces, infrastructures, facilities
for registration, the Register of Deeds shall register the same in for public use and/or other form of subdivision development as
accordance with the provisions of the Land Registration Act, as contained in the approved subdivision plan and/or represented
amended: Provided, however, that it there is a street, in its advertisements, without the permission of the Authority and
passageway or required open space delineated on a complex the written conformity or consent of the duly organized
subdivision plan hereafter approved and as defined in this homeowners association, or in the absence of the latter, by the
Decree, the Register of Deeds shall annotate on the new majority of the lot buyers in the subdivision.
certificate of title covering the street, passageway or open
space, a memorandum to the effect that except by way of Section 23. Non-Forfeiture of Payments. No installment
donation in favor of a city or municipality, no portion of any payment made by a buyer in a subdivision or condominium
street, passageway, or open space so delineated on the plan project for the lot or unit he contracted to buy shall be forfeited
shall be closed or otherwise disposed of by the registered owner in favor of the owner or developer when the buyer, after due
without the requisite approval as provided under Section 22 of notice to the owner or developer, desists from further payment
this Decree. due to the failure of the owner or developer to develop the
subdivision or condominium project according to the approved
Section 18. Mortgages. No mortgage on any unit or lot shall be plans and within the time limit for complying with the same. Such
made by the owner or developer without prior written approval buyer may, at his option, be reimbursed the total amount paid
of the Authority. Such approval shall not be granted unless it is including amortization interests but excluding delinquency
shown that the proceeds of the mortgage loan shall be used for interests, with interest thereon at the legal rate.
the development of the condominium or subdivision project and
effective measures have been provided to ensure such Section 24. Failure to pay installments. The rights of the buyer
utilization. The loan value of each lot or unit covered by the in the event of this failure to pay the installments due for reasons
mortgage shall be determined and the buyer thereof, if any, shall other than the failure of the owner or developer to develop the
be notified before the release of the loan. The buyer may, at his project shall be governed by Republic Act No. 6552.
option, pay his installment for the lot or unit directly to the Where the transaction or contract was entered into prior to the
mortgagee who shall apply the payments to the corresponding effectivity of Republic Act No. 6552 on August 26, 1972, the
mortgage indebtedness secured by the particular lot or unit defaulting buyer shall be entitled to the corresponding refund
being paid for, with a view to enabling said buyer to obtain title based on the installments paid after the effectivity of the law in
over the lot or unit promptly after full payment thereto; the absence of any provision in the contract to the contrary.

Section 19. Advertisements. Advertisements that may be made Section 25. Issuance of Title. The owner or developer shall
by the owner or developer through newspaper, radio, television, deliver the title of the lot or unit to the buyer upon full payment
leaflets, circulars or any other form about the subdivision or the of the lot or unit. No fee, except those required for the
condominium or its operations or activities must reflect the real registration of the deed of sale in the Registry of Deeds, shall be
facts and must be presented in such manner that will not tend to collected for the issuance of such title. In the event a mortgage
mislead or deceive the public. over the lot or unit is outstanding at the time of the issuance of
The owner or developer shall answerable and liable for the the title to the buyer, the owner or developer shall redeem the
facilities, improvements, infrastructures or other forms of mortgage or the corresponding portion thereof within six months
development represented or promised in brochures, from such issuance in order that the title over any fully paid lot
advertisements and other sales propaganda disseminated by or unit may be secured and delivered to the buyer in accordance
the owner or developer or his agents and the same shall form herewith.
part of the sales warranties enforceable against said owner or
developer, jointly and severally. Failure to comply with these Section 26. Realty Tax. Real estate tax and assessment on a
warranties shall also be punishable in accordance with the lot or unit shall de paid by the owner or developer without
penalties provided for in this Decree. recourse to the buyer for as long as the title has not passed the
buyer; Provided, however, that if the buyer has actually taken
Section 20. Time of Completion. Every owner or developer possession of and occupied the lot or unit, he shall be liable to
shall construct and provide the facilities, improvements, the owner or developer for such tax and assessment effective
infrastructures and other forms of development, including water the year following such taking of possession and occupancy.
supply and lighting facilities, which are offered and indicated in
the approved subdivision or condominium plans, brochures, Section 27. Other Charges. No owner or developer shall levy
prospectus, printed matters, letters or in any form of upon any lot or buyer a fee for an alleged community benefit.
advertisement, within one year from the date of the issuance of Fees to finance services for common comfort, security and
the license for the subdivision or condominium project or such sanitation may be collected only by a properly organized
other period of time as may be fixed by the Authority. homeowners association and only with the consent of a majority
of the lot or unit buyers actually residing in the subdivision or subdivision or condominium project at the expenses of the
condominium project. owner or developer, jointly and severally, in cases where the
owner or developer has refused or failed to develop or complete
Section 28. Access to Public Offices in the Subdivisions. No the development of the project as provided for in this Decree.
owner or developer shall deny any person free access to any The Authority may, after such take-over, demand, collect and
government office or public establishment located within the receive from the buyers the installment payments due on the
subdivision or which may be reached only by passing through lots, which shall be utilized for the development of the
the subdivision. subdivision.

Section 29. Right of Way to Public Road. The owner or Section 36. Rules and Regulations. The Authority shall issue
developer of a subdivision without access to any existing public the necessary standards, rules and regulations for the effective
road or street must secure a right of way to a public road or street implementation of the provisions of this Decree. Such
and such right of way must be developed and maintained standards, rules and regulations shall take effect immediately
according to the requirement of the government and authorities after their publication three times a week for two consecutive
concerned. weeks in any newspaper of general circulation.

Section 30. Organization of Homeowners Association. The Section 37. Deputization of law enforcement agencies. The
owner or developer of a subdivision project or condominium Authority may deputize the Philippine Constabulary or any law
project shall initiate the organization of a homeowners enforcement agency in the execution of its final orders, rulings
association among the buyers and residents of the projects for or decisions.
the purpose of promoting and protecting their mutual interest
and assist in their community development. Section 38. Administrative Fines. The Authority may prescribe
and impose fines not exceeding ten thousand pesos for
Section 31. Donations of roads and open spaces to local violations of the provisions of this Decree or of any rule or
government. The registered owner or developer of the regulation thereunder. Fines shall be payable to the Authority
subdivision or condominium project, upon completion of the and enforceable through writs of execution in accordance with
development of said project may, at his option, convey by way the provisions of the Rules of Court.
of donation the roads and open spaces found within the project
to the city or municipality wherein the project is located. Upon Section 39. Penalties. Any person who shall violate any of the
acceptance of the donation by the city or municipality provisions of this Decree and/or any rule or regulation that may
concerned, no portion of the area donated shall thereafter be be issued pursuant to this Decree shall, upon conviction, be
converted to any other purpose or purposes unless after punished by a fine of not more than twenty thousand
hearing, the proposed conversion is approved by the Authority. (P20,000.00) pesos and/or imprisonment of not more than ten
years: Provided, That in the case of corporations, partnership,
Section 32. Phases of Subdivision. For purposes of complying cooperatives, or associations, the President, Manager or
with the provisions of this Decree, the owner or developer may Administrator or the person who has charge of the
divide the development and sale of the subdivision into phases, administration of the business shall be criminally responsible for
each phase to cover not less than ten hectares. The requirement any violation of this Decree and/or the rules and regulations
imposed by this Decree on the subdivision as a whole shall be promulgated pursuant thereto.
deemed imposed on each phase.
Section 40. Liability of controlling persons. Every person who
Section 33. Nullity of waivers. Any condition, stipulation, or directly or indirectly controls any person liable under any
provision in contract of sale whereby any person waives provision of this Decree or of any rule or regulation issued
compliance with any provision of this Decree or of any rule or thereunder shall be liable jointly and severally with and to the
regulation issued thereunder shall be void. same extent as such controlled person unless the controlling
person acted in good faith and did not directly or indirectly
Section 34. Visitorial powers. This Authority, through its duly induce the act or acts constituting the violation or cause of
authorized representative may, at any time, make an action.
examination into the business affairs, administration, and
condition of any person, corporation, partnership, cooperative, Section 41. Other remedies. The rights and remedies provided
or association engaged in the business of selling subdivision lots in this Decree shall be in addition to any and all other rights and
and condominium units. For this purpose, the official authorized remedies that may be available under existing laws.
so to do shall have the authority to examine under oath the
directors, officers, stockholders or members of any corporation, Section 42. Repealing clause. All laws, executive orders, rules
partnership, association, cooperative or other persons and regulations or part thereof inconsistent with the provisions
associated or connected with the business and to issue of this Decree are hereby repealed or modified accordingly.
subpoena or subpoena duces tecum in relation to any
investigation that may arise therefrom. Section 43. Effectivity. This Decree shall take effect upon its
The Authority may also authorize the Provincial, City or approval.
Municipal Engineer, as the case may be, to conduct an ocular Done in the City of Manila, this 12th day of July, in the year of
inspection of the project to determine whether the development Our Lord, nineteen hundred and seventy-six.
of said project conforms to the standards and specifications
prescribed by the government.
The books, papers, letters, and other documents belonging to
the person or entities herein mentioned shall be open to
inspection by the Authority or its duly authorized representative.

Section 35. Take-over Development. The Authority, may take

over or cause the development and completion of the
What is the Realty Installment Buyer Act? the property equivalent to fifty per cent of the total
Commonly known as the Maceda Law. It is embodied in payments made, and, after five years of installments,
R.A. 6552 which provides for certain protection to particular an additional five per cent every year but not to exceed
buyers of real estate payable on installments. The law ninety per cent of the total payments made: Provided,
declares as "public policy to protect buyers of real estate on That the actual cancellation of the contract shall take
installment payments against onerous and oppressive place after thirty days from receipt by the buyer of the
conditions. notice of cancellation or the demand for rescission of
Note: The purpose of the law is to protect buyers in installment the contract by a notarial act and upon full payment of
against oppressive conditions. the cash surrender value to the buyer.
Down payments, deposits or options on the contract shall be
What are the transactions/sale covered by the Maceda included in the computation of the total number of installment
Law? payments made.lawphi1
The law involves the sale of immovables on installment
(Maceda Law, R.A. 6552). Section 4. In case where less than two years of installments
1. Coverage: Residential Real Estate (Villanueva, p. 431) were paid, the seller shall give the buyer a grace period of not
2. Exclude: less than sixty days from the date the installment became due.
a) Industrial lots If the buyer fails to pay the installments due at the expiration of
b) Commercial buildings (and commercial lots by the grace period, the seller may cancel the contract after thirty
implication) days from receipt by the buyer of the notice of cancellation or
c) Sale to tenants under agrarian laws the demand for rescission of the contract by a notarial act.

What are the rights granted to buyers? Section 5. Under Section 3 and 4, the buyer shall have the right
1. Buyer paid at least 2 years installment to sell his rights or assign the same to another person or to
a) Pay without interest the balance within grace period of reinstate the contract by updating the account during the grace
1 month for every year of installment payment. Grace period and before actual cancellation of the contract. The deed
period to be exercised once every 5 years. of sale or assignment shall be done by notarial act.
b) When no payment cancelled; buyer entitled to 50%
of what he has paid + 5% for every year but not Section 6. The buyer shall have the right to pay in advance any
exceeding 90% of payments made installment or the full unpaid balance of the purchase price any
Note: Cancellation to be effected 30 days from notice & upon time without interest and to have such full payment of the
payment of cash surrender value. purchase price annotated in the certificate of title covering the
property.
2. Buyer paid less than 2 years installment
a) Grace period is not less than 60 days from due date Section 7. Any stipulation in any contract hereafter entered into
b) Cancellation if failure to pay w/in 60 days grace contrary to the provisions of Sections 3, 4, 5 and 6, shall be null
c) 30 days notice before final cancellation and void.
Note: buyer can still pay w/in the 30 days period with interest
Section 8. If any provision of this Act is held invalid or
unconstitutional, no other provision shall be affected thereby.
REPUBLIC ACT No. 6552
AN ACT TO PROVIDE PROTECTION TO BUYERS OF REAL Section 9. This Act shall take effect upon its approval.
ESTATE ON INSTALLMENT PAYMENTS Approved: August 26, 1972.
(MACEDA LAW)

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 canceled, the seller shall refund to
the buyer the cash surrender value of the payments on