Hi HLURB,
I bought a 100 sq m. piece of land in Calamba, Laguna inside a newly developed subdivision with a purpose of constructing a house later . Total contract price is 530k with a DP of 20% or 106k less reservation of 10k. The remaining DP of 96k is payable in 12 mos. at 8k/month.
The balance 424k I plan to loan via HDMF. Developer ask for 12 PDCs of 8k which I already complied. Then recently they are asking me a 13th PDC worth 424,000 (remaining balance) as a "guarantor check" and they said would be returned when my HDMF load is approved.
I am having second thoughts in giving them this 424k PDC because I don't have that amount in my checking account, and if I do have, I should have paid the whole lot in cash. I am worried I maybe be liable for estafa for giving a check without enough money in it.
Is this correct practice for developers to ask for this "guarantor check"? Why do I need to make a guarantor check , where in fact they have the title and would only give the title to HDMF after loan approval and probably after HDMF pays them the loan, while I pay amortization to HDMF. What are my rights if I refused to give this guarantor check?
Your assistance in this matter would be highly appreciated. Thank you very much. - Omar
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