RELATED REAL ESTATE LAWS

REPUBLIC ACT
# 6552 (Maceda Law)
AN ACT TO PROVIDE PROTECTION
TO BUYER OF REAL ESTATE ON
INSTALLMENT PAYMENTS
 WHAT IS THE COVERAGE OF
THE PROTECTION?

– transactions or contracts,
involving the sale or financing of
real estate on installment
payments, including residential
condominium apartments
 EXCEPTIONS TO THE
COVERAGE:

1. Industrial lots,
2. Commercial buildings and
3. Sales to tenants under RA# 3844
4. Installment sales covered by Sale
with Mortgage and not by Contract
to Sell.
 Two categories of buyers accorded
protection under this law:

1. a buyer with at least 2 years of

installments under Section 3 RA
6552, and
2. a buyer with less than 2 years of
installments under Section 4 RA
6552
 Buyer with at least two (2) years of
installment – Section 3 RA 6552

1. To pay without additional

interest the unpaid installments
due within the total grace period
earned.
 Buyer with at least two (2) years of
installment – Section 3 RA 6552

a. Grace period is equal to one (1)

month for every year of installment
payments;
Hence, at least two (2) months
grace period.
b. This right can be exercised by the
buyer only once in every five years of
the life of the contract
 Buyer with at least two (2) years of
installment – Section 3 RA 6552
2. In case of contract of
cancellation,
- to be refunded of the
cash surrender value of his
payments equal to 50% of his
total payments.
 Buyer with at least two (2) years of installment –
Section 3 RA 6552

2. In case of contract of cancellation,

b. If he has paid five years or more, he

is entitled to an increase of 5% every
year and so on
c. But the cash surrender value shall
not exceed 90% of his total payments.
 Buyer with at least two (2) years of
installment – Section 3 RA 6552

2. In case of contract of
cancellation,
d. after thirty days from
receipt by the buyer of the
notice of cancellation or demand
for rescission of the contract by a
notarial act
 Problem: (2002)

– A has been paying on

installment a subdivision
lot since Jan. 2002 at the
rate of 3,000/month after
a DP of P10,000 to a
Subd. Dev. Company
 Problem: (2002)
– In Jan. 2010, due to some
financial problems, she
defaulted to pay his
installments. The company
decided to cancel the
contract after giving her
notarial notice
 Problem: (2002)
Q.1. How many months is
the grace period of A?
2. How much is the cash
surrender value due to
cancellation of his
contract? Show your
computation
 Problem: (2002)
A.1. The unpaid installment
payments which are due
and demandable shall
have a grace period of 1
month for every 1 year of
installment payments
made.
 Problem: (2002)
A.1. 2010
- 2002
8 years
x 30 days
240 days or 8 months
grace period
 Problem: (2002)
A.2. Total monthly amort. Paid, inclusive of
penalty (96 amort. At P3000)P288,000

Add: DPayment 10,000

TOTAL: P298,000
Factor for the refund 65%
Cash Surrender Value P193,700
 Buyer with less than 2 years of
installments Section 4 RA 6552

1. the right to pay within a

grace period of not less than
sixty (60) days from the date
the installment became due.
 Buyer with less than 2 years of
installments Section 4 RA 6552

Failure to pay the installment due at

the expiration of the grace period, i.e.
60 days, the seller may cancel the
Contract after 30 days from
receipt by the buyer of the notice
of cancellation or demand for
rescission of the contract by a notarial
act.
Items be included in the computation
of the total number of installment
payments made

1. Down payments,
2. deposits or
3. options on the contract
Right to Assign/Reinstate
Contract (Sec. 5)
 The buyer has a right to sell or
assign his rights over the lot or unit
to another person or reinstate the
contract by updating the account
provided this is done during the
grace period and before actual
cancellation of the contract
Right to Advance Payment without
Interest and Annotation of Full Payment
in the Title Subject of the Sale (sec.6)

 The right to pay in advance any

installments or the full unpaid
balance without interest any
time and have such full
payment annotated in the title.
 R.A. No. 9653
The Rent Control Act
of 2009
Persons protected with the
Rent Control Law:
 Housing tenants in the
lower income brackets and
other beneficiaries who shall
be protected from
unreasonable rent increases.
Coverage of the protection
a. As to the range of amount:
All residential units in National
Capital Region and other highly
urbanized cities with units that rent
prices ranging from P 1 to 10,000.
And all residential units in urban
cities with monthly rent prices
ranging from P 1 to 5,000.
As to the residential unit
covered:
1) Apartment
2) House and land
3) Land on which another’s dwelling is
located and used for residential
purposes
4) Buildings, units thereof used solely
as dwelling places, boarding houses,
dormitories, rooms and bedspaces
Exceptions:
1) Motels, motel rooms, hotels and
hotel rooms
2) Those used for home industries,
retail stores or other business
purposes if the owner and his
family actually live therein and use
it principally for dwelling purposes
3) Rent-to-own schemes
Allowable increases under the
law:
a.For a period of one (1) year
from its effectivity, on July
14, 2009, no increase shall
be imposed upon the rent of
any residential unit covered
by this Act:
Allowable increases under the
law:
b. After such period until
December 31, 20l3, the rent of
any residential unit covered by
this Act shall not be increased
by more than seven (7%) per
cent annually as long as the
unit is occupied by the same
lessee:
Allowable increases under the law:

c. When the residential unit

becomes vacant, the lessor may set
the initial rent for the next lessee:
d. That in the case of boarding
houses, dormitories, rooms and
bedspaces offered for rent to
students, no increase in rental
more than once per year shall be
allowed.
Requirement of rent and bank
deposit:
a. Not more than one (1) month
advance rent
b. Not more than two (2) months
deposit to be deposited in the bank
under the lessor’s account. Any and all
interest that shall accrue therein shall
be returned to the lessee at the
expiration of the lease contract.
Requirement of rent and bank
deposit:
c.. In case the lessee fails to settle rent,
electric, telephone, water or such other
utility bills or destroys any house
components and accessories, the lessor
has the right to forfeit the deposits and
interest in favor of the lessor in the
amount commensurate to the pecuniary
damage done by the lessee.
Prohibitions:
a. Assignment of lease or
subleasing of the whole or any
portion of the residential unit,
including the acceptance of
boarders or bedspacers, without
the written consent of the
lessor.
Prohibitions:
b. No lessor or his successor-in-
interest shall be entitled to eject
the lessee upon the ground that
the leased premises have been
sold or mortgaged to a third
person regardless of whether
the lease or mortgage is
registered or not.
Penalties.
 A fine of not less than Twenty-five
thousand pesos (P25,000.00) nor more
than Fifty thousand pesos (P50,000.00)
or imprisonment of not less than one
(1) month and one (1) day to not more
than six (6) months or both shall be
imposed on any person, natural or
juridical, found guilty of violating any
provision of this Act.
REPUBLIC ACT NO. 8368

AN ACT REPEALING PRESIDENTIAL

DECREE NO. 772, ENTITLED
"PENALIZING SQUATTING AND
OTHER SIMILAR ACTS."
Effect of the repeal:
All pending cases under the provisions of
Presidential Decree No. 772 shall be
dismissed upon the effectivity of this
Act.
Note: October 27, 1997- approval of the
law
Exeptions of the repeal:
The repeal does not nullify,
eliminate or diminish in any way
Sec. 27 of Republic Act No.
7279 or any of its provisions
relative to sanctions against
professional squatters and
squatting syndicates.
 REPUBLIC ACT NO. 7279
AN ACT TO PROVIDE FOR A COMPREHENSIVE
AND CONTINUING URBAN DEVELOPMENT AND
HOUSING PROGRAM,

Sec. 27. Action Against Professional

Squatters and Squatting
Syndicates. — The LGUs, xxx shall
adopt measures to identify and
effectively curtail the nefarious and
illegal activities of professional
squatters and squatting syndicates
Penalties:
Any person or group identified as such
shall be summarily evicted and their
dwellings or structures demolished, and
shall be disqualified to avail of the
benefits of the Program. A public official
who tolerates or abets the commission
of the abovementioned acts shall be
dealt with in accordance with existing
laws.
Penalties:
For purposes of this Act, professional
squatters or members of squatting
syndicates shall be imposed the penalty
of six (6) years imprisonment of a fine
of not less than Sixty thousand pesos
(P60,000.00) but not more than One
hundred thousand pesos (P100,000), or
both, at the discretion of the court.
 FUNDAMENTALS OF
CONTRACTS AND AGENCY
 Contract Defined

 a meeting of minds between

two persons whereby one binds
himself, with respect to the
other, to give something or
render some service in return.
Elements of a valid contract
1. Consent of the contracting
parties
2. Object certain which is the
subject matter of the contract
3. Cause or consideration of the
obligations which is established
Objects of a contract
1. All things which are not
outside the commerce of men
including future things or
property can be the object of a
contract. All rights which are
not instransmissible may also
be the object of contracts.
Objects of a contract
2. All services which are not
contrary to law, morals, good
customs, public order or public
policy may likewise be the object of
the contract.
3. No contact maybe entered into
upon future inheritance except in
cases expressly authorized by law
Form of a contract to be of
obligatory force
 In what ever form in which
the contract may have been
entered into, it shall be
obligatory provided all of the
essential elements for its
validity are present
Form of a contract to be of
obligatory force
In what ever form Except when:
1. The law requires that it must be in a
certain form in order to be valid;
2. The law requires that the contract
must be in a certain form in order to
be enforceable
Contracts which must appear
in writing
1.Donations of personal property whose
sale exceeds P5,000;
2. Sale of piece of land or any interest
therein by an agent;

3. Contract of antichresis; and

4. Agreements regarding payment of

interest in contracts of loan.
Inexistent and void contracts
from the beginning
1. Those whose cause, object or purpose
is contrary to law, morals, good
customs, public order or public policy;
2. Those which are absolutely simulated
or fictitious;
3. Those whose cause or object did not
exist at the time of the transaction
and can not come into existence;
Inexistent and void contracts
from the beginning
4. Those whose object is outside the commerce
of man;
5. Those which contemplate an impossible
service;
6. Those where the intention of the parties
relative to the principal object cannot be
ascertained; and
7. Those expressly prohibited or declared void
by law.
Voidable contracts
1. Those where one of the parties is
incapable of giving consent to a
contract (e.g. insane @ sell)
2. Those where the consent is
vitiated by mistake, violence,
intimidation, undue influence or
fraud.
Unenforceable contracts
1. Those entered into in the name of
another person by one who has no
authority or legal representation, or
who has acted beyond his power (eg.
selling property w/o authority)
2. Those that do not comply with the
Statute of Frauds; and
3. Those where both parties are
incapable of giving consent.
Enforceable contract
when a contract is enforceable under the
Statute of Frauds, and a public
document is necessary for its
registration in the Registry of Deeds,
the parties may avail of the right when
a specific form is required by law.
(eg. Contract of sale in private writing valid between
parties not 3rd persons)
CONTRACT OF AGENCY
 a person binds himself to render
some service or to do something in
representation or on behalf of
another, with the consent or
authority of the latter. It is based
on representation in behalf of the
principal
Elements of Agency
1. Consent of the parties (the principal, agent,
at times the sub-agent)
2. Subject matter (the juridical act to be
performed by the agent and the act must be
possible, lawful determinate and non-
personal);
3. Consideration ( the compensation to be
paid or the commission to be earned by the
agent
Acceptance of Agency
1. Express - in writing or through a
public document, like the Special
Power of Attorney.
2. Implied - implied from the acts of
the agent carrying out the agency or
from the silence or inaction of the
principal under the circumstances.
Modes of extinguishing a
contract of agency
1. By expiration of the period for which
that agency was constituted;
2. By the death , civil interdiction, insanity
or insolvency of the principal or the
agent;
3. By the withdrawal of the
agent;
Modes of extinguishing a
contract of agency

4. By the accomplishment of perfection of the object

or purpose of the agency;
5. By the revocation of the agent’s
employment;
6. By the dissolution of the firm or corporation which
entrusted or accepted the agency; and

7. By other modes such as: termination of mutual

consent, novation, loss of the subject matter and
outbreak of war
 R.A. 9856
THE REAL ESTATE INVESTMENT TRUST
ACT
( AN OVERVIEW)
The law grants certain incentives to
REITs in order to achieve the following
objectives:
To make large-scale, income-
producing real estate investments
To be accessible to ordinary investors
To develop the capital market;
To help finance and develop
infrastructure projects; and
To protect the investing public (Sec. 2
REIT)
SALIENT FEATURES:

1. REIT must be a corporation.

2. REIT must be a real estate company.

3. REIT must have a minimum paid up
capital of P300M (Sec. 8.2, REIT)

- in cash or property

4. REIT must be a publicly listed

company with local stock exchange
5. Minimum public ownership (MPO)
requirement
There must be at least 1,000 “public
shareholders” (PS);
Each owning at least 50 shares of a class
of share;
Who, in the aggregate, own at least 1/3
of the REIT’s outstanding capital stock
(Sec. 8.1, REIT)
Public shareholder means a shareholder
of a REIT other than the following
persons:
-The sponsor/promoter of the REIT –
contributes cash or property in
incorporating REIT
-a director, principal officer or principal
shareholder of the sponsor/promoter of
the REIT
6. Mandatory Dividend Declaration

REIT must annually distribute at least

90% of its Distributable Income to its
shareholders
 GOOD
MORNING!