Developers

A registered owner or developer of a parcel of land who wishes to convert the same into a subdivision project shall apply with the Local Government Unit (LGU) concerned for the approval of subdivision Development Permit (DP). The owner/developer shall subsequently apply for Certificate of Registration (CR) and License to Sell (LS) with HLURB prior to the selling of units/house or lots

1. Developing Residential Subdivision Projects
   1. Residential Projects under PD 957
   • Minimum design standards (IRR OF PD 957 Rule I)
   • Requirements (IRR of PD 957 Rule II & Rule IV )
   • Downloadable forms
   • Process (flowchart)
   2. Residential Projects under BP 220
   • Minimum design standards (Rule II, BP 220 IRR)
   • Requirements (Rule III, Rule IV BP 220 IRR)
   • Downloadable Forms
   • Process (flowchart)
2. Other Subdivision Projects (All items below are linked to related IRRs)
   1. Farmlot Subdivision
   2. Commercial Subdivision
   3. Industrial Subdivision
   4. Memorial Parks

Back to What Developers Should Know

An owner/developer of a condominium project is required to apply for Development Permit (DP), Certificate of Registration (CR) and License To Sell (LS) with the HLURB prior to actual development and selling of units therein.

1. Residential Condominium Project
   • Minimum Design Standards (Rule I, PD 957 IRR)
   • Requirements (Rule III, PD 957 IRR)
   • Downloadable Forms
   • Process (flowchart)
2. Commercial Condominium Project
   • Minimum Design Standards (Rule I, PD 957 IRR)
   • Requirements (Rule III, PD 957 IRR)
   • Downloadable Forms
   • Process (flowchart)
3. Columbarium Project

Back to What Developers Should Know

1. Complete the project in accordance with the approved development plan therefore not later than (Indicate target date of completion) and advise buyers in writing of such time frame for development.
2. Maintain the common facilities until their turnover is authorized pursuant to PD 1216.
3. Register the instrument relative to any sale with the Register of Deeds, whether or not the price is fully paid, within 180 days from execution.
4. Deliver the title free from liens and encumbrance to fully paid buyers or if mortgaged redeem and deliver the same within six months from full payment
5. Secure clearance prior to any mortgage, alteration of plans, advertisement or change of ownership.
6. Pay the real estate tax/assessment on the lot/unit until the year the title is transferred to or actual possession/ occupation is taken by the buyer.
7. Refrain from forfeiting payments made by the buyers who suspend amortization after due notice to owner or developer on ground of incomplete development or non-development.
8. Submit report showing its extent of project development and changes in corporate officer within sixty days after each semester.
9. Observe the prescribed maximum selling price for BP 220 projects (Economic and Socialized Housing)
10. Display the registration certificate and this license in a conspicuous place in all offices of the owner and developer.
11. Initiate the organization of a home/unit owners.
12. Refrain from levying any fee for an alleged community benefit upon the buyers; and
13. Ensure the development of Socialized Housing Project presented as compliance to Section 18, RA 7279

Back to What Developers Should Know

Developmental Loan – All developmental loans from banks and other financial institutions, where the subdivision/condominium is constituted as its collateral, shall be subject of a mortgage clearance from the HLURB pursuant to Section 18 of PD 957, Subdivision and Condominium Buyers Protective Decree, Thus.

“Section 18. Mortgages. – No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the Authority now the HLURB under EO 648. Such approval shall not be granted unless it is shown that the proceeds of the mortgage loan shall be used for the development of the condominium or subdivision project and effective measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereof.”

Attached: BSP Circular Letter

Back to What Developers Should Know

EO 45 prescribes specific period for a government agency and the local government units to act on applications for certifications, clearances and permits for housing projects (i.e. subdivisions or condominiums). It also provides an option for the applicant-developer where the government agency or LGU refuses or fails to dispose of an application for said applied for housing permit.

per DILG MC No. 2007-132 dated October 2, 2007

Due to reports and complaints of undue delays in the issuance of Development Permits (DP) by the Sangguniang Panglungsod/Bayan, Mayor’s Permit by the City/Municipal Mayor, and Barangay Clearance by the Punong Barangay and alleged exhorbitant fees or fees not supported by barangay ordinance imposed for barangay clearances, the DILG issued the following procedural guidelines:

1. Sangguniang Panglungsod/Bayan (SP/SB) shall strictly observe the time frame under EO 45 by acting on applications for development permits (DP) within 30 days from receipt of complete application by way of issuing an SP/SB resolution.
2. Punong Barangay shall act on the application for barangay clearance in 7 days from filing of the application and in the event that said clearance is not issued in 7 days, the city/municipal mayor may issue said permit.
3. Fees imposable by the barangay for housing projects “should be that amount limited to cover the cost of regulation as fixed by the barangay ordinance”. In the absence of a barangay ordinance for said purpose, no fee should be collected thereon.
4. After the issuance of the DP and Barangay Clearance, the applicant may apply for Mayor’s Permit which shall be acted upon in 15 days from receipt of the application.

A copy of MC 2007-132 is herein reproduced for reference.

Subdivision Project – shall mean a tract or a parcel of land registered under Act No. 496 which is partitioned primarily for residential purposes into individual lots with or without improvements thereon, and offered to the public for sale, in cash or in installment terms. It shall include all residential, commercial, industrial and recreational areas, as well as open spaces and other community and public areas in the project. (P.D. 957)

Subdivision Lot shall mean any of the lots, whether residential, commercial, industrial, or recreational, in a subdivision project. (P.D. 957)

Condominium Project shall mean the entire parcel of real property divided or to be divided primarily for residential purposes into condominium units, including all structures thereon. (P.D. 957)

Condominium Unit shall mean 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 party of parts of floors) in a building or buildings and such accessories as may be appended thereto. (P.D. 957)

Sale or Sell shall include every disposition, or attempt to dispose, for a valuable consideration, of a subdivision lot, including the building and other improvements thereof, if any, in a subdivision project or condominium unit in a condominium project. Sale or sell shall also include a contract to sell, a contract of purchase and sale, an exchange, an attempt to sell, an option of sale or purchase, a solicitation of a sale, or any offer to sell, directly or by agent, or by a circular, letter, advertisement or otherwise.

A privilege given to a member of a cooperative, corporation, partnership, or any association and/or the issuance of a certificate of receipt evidencing or giving the right of participation in, or right, any land in consideration of payment of the membership fee or dues, shall be deemed a sale within the meaning of this definition. (P.D. 957)

Economic and Socialized Housing refers to housing units which are within the affordability level of the average and low-income earners which is thirty percent (30%) of the gross family income as determined by the National Economic and Development Authority from time to time. It shall also refer to the government-initiated sites and services development and construction of economic and socialized housing projects in depressed areas. (BP 220)

Socialized Housing refers to housing programs and projects covering houses and lots or homelots only undertaken by the Government or the private sector for the underprivileged and homeless citizens which shall include sites and services development, long term financing, liberalized terms on interest payments, and such other benefits in accordance with the provisions of this Act. (RA 7279)

Back to What Developers Should Know

As of June 2008
Download list (Corporations only)

Back to What Developers Should Know

Download per topic the Implementing Rules and Regulations of:

• PD 957
• BP 220

Reminder:
FOR UPDATES ON RELEVANT POLICIES AFFECTING ABOVE PROJECTS PLEASE CHECK RECENT POLICIES/BOARD RESOLUTION

Back to What Developers Should Know

May an owner/developer collect contributions from buyers to finance certain services for community benefit? No.

Any collections for said purpose may only be done by the duly organized homeowners association but with the consent of the actual residents in the project.

Section 27 of PD 957 provides, thus:

“SECTION 27. Other Charges. – No owner or developer shall levy upon any lot or unit buyer a fee for an alleged community benefit. Fees to finance services for common comfort, security and sanitation may be collected only by a properly organized homeowners association and only with the consent of a majority of the lot or unit buyers actually residing in the subdivision or condominium project.”

A violation of the provisions of the decree and its implementing rules and regulations will carry administrative and penal sanctions. The liability extends to controlling persons in cases where the violator is a partnership or corporation. The violation usually carries administrative and criminal penalties. The HLURB as a quasi-judicial entity has jurisdiction over administrative aspect of the case while the criminal aspect is lodge before the fiscal’s office and accordingly if there is a finding of probable cause a criminal action is filed in the civil courts.

Section 38, 39 and 40 of PD 957 provides:

“SECTION 38. Administrative Fines. – The Authority may prescribe and impose fines not exceeding ten thousand pesos for violations of the provisions of this Decree or of any rule or regulation thereunder. Fines shall be payable to the Authority and enforceable through writs of execution in accordance with the provisions of the Rules of Court.

“SECTION 39. Penalties. – Any person who shall violate any of the provisions of this Decree and/or any rules or regulation that may be issued pursuant to this Decree shall, upon conviction, be punished by a fine of not more than twenty thousand (P 20, 000.00) pesos and/or imprisonment of not more than ten (10) years: Provided, that in the case of corporations, partnership, cooperatives, or associations, the President, Manager or Administrator or the person who has charge of the administration of the business shall be criminally responsible for any violation of this Decree and/or the rules and regulations promulgated pursuant thereto.

“SECTION 40. Liability of controlling persons. – Every person who directly or indirectly controls any person liable under any provision of this Decree or of any rules or regulation issued thereunder shall be liable jointly and severally with and to the same extent as such controlled person unless the controlling person acted in good faith and did not directly or indirectly induce the acts constituting the violation or cause of action.”

Back to What Developers Should Know

Back to Tips on Buying Real Estate