Buyers
Before Buying
1. Check if the Project has a Certificate of Registration and License to Sell.
You should ask the broker/agent of the owner/developer if the project is registered and has a License to Sell issued by HLURB:
* This can be verified at the On-line Queries/HLURB website (www.hlurb.gov.ph) for the list of projects covered with Certificate of Registration and License to Sell as well as any encumbrance thereon, e.g. Cease and Desist Order, Suspension of License, etc.;
* Or you may visit or call the nearest HLURB Regional Office for this information.
2. Visit the subdivision/condominium, where the house and lot or condo unit to be purchased is located to know its natural topography, viz: susceptibility to landslide, flooding, erosion, etc.;
If the project is covered with a License to Sell, you may already enter into a Contract with the owner/developer. However, there are things which must be checked:
1. The date of completion of the project as indicated in the License to Sell;
2. If the property is mortgaged, it should have a Clearance to Mortgage from the HLURB;
3. The facilities and amenities represented in the advertisement flyers/ brochures are in accordance with the approved subdivision and condominium plan on file with HLURB.
When Buying
1. Check if the broker/agent is registered with HLURB/DTI;
2. Verify if the property has not been sold to other buyers with the Register of Deeds;
3. Check into your source of income whether you can afford to pay the equity and the monthly installments;
4. Check if the materials of the house or condo unit conform with the development standards and approved construction specifications submitted to HLURB;
5. Check whether the developer would payfor the water and electric meters, the subdivision perimeter fence, etc;.
6. Check who would eventually operate the subdivision/condominium water system.
Before Signing the Contract to Sell
1. Don’t sign any blank form of the Contract;
2. Read thoroughly all the contents of the Contract more especially the terms and conditions in fine print;
3. Secure a copy of the Contract and all other documents that you have signed;
4. Make sure that the Contract would be registered by the owner/developer to the Register of Deeds;
5. Pay directly to the owner/developer or the marketing agent authorized by said owner/developer only; and
6. Ask an official receipt on all payments for your file.
Time of Completion of the Project
The two most pressing questions an excited or anxious buyer would ask are:
1. When will the project be completed?
2. What are the facilities and amenities that go with my purchase of a unit?
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Right to a Clean Title
The buyer of a subdivision lot or condominium unit shall have a right to a clean title of said lot or unit upon the full payment of the purchase price. If the lot or unit is mortgaged, the owner/developer shall redeem the mortgage within six months from full payment so that the title could be delivered to the buyer. The only fee collectible from the buyer is the registration fee for the deed of sale in the Registry of Deeds.
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Non-Forfeiture of Payments
A buyer’s payment for a subdivision lot or condominium unit cannot be forfeited by the owner or developer when he desists paying on the ground that the project is not develop per approved plans and within the time limit for development. He must, however, notify the owner or developer of his decision to suspend payments.
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Failure to Pay Installments
In case the buyer fails to pay his installments for other reasons not attributable to the non-development of the project i.e. he failed to raise the needed money, he may avail of his rights under Republic Act 6552, Realty Installment Buyer Protection Act. This is so provided under Section 24 of PD 957, thus:
SECTION 24. Failure to Pay Installment. – The rights of the buyer in the event of his failure to pay the installment due for reason other than the failure of the owner or developer to develop the project shall be governed by Republic Act No. 6552.
Where the transaction or contract was entered into prior to the effectivity of Republic Act No. 6552 on August 26, 1972, the defaulting buyer shall be entitled to the corresponding refund based on the installments paid after the effectivity of the law in the absence of any provision in the contract to the contrary.
Related Laws
Sanctions for Violating PD 957
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.
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Jurisdiction on Cases for Violation of PD 957
A violation of the provisions of PD 957, as amended, carries civil and criminal liabilities which are punishable primarily under PD 957 and other applicable penal laws.
An aggrieved buyer of a subdivision house and lot or a condominium unit may file the civil aspect of the violation with the HLURB, a quasi-judicial government agency for housing and land development. The proceedings on the civil case is governed by Rules of Procedure of HLURB. The proceedings is summary in nature and the provisions of the Rules of Court is not applicable except in a suppletory character.
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Civil Action And Criminal Action Independent of Each Other
Civil Action And Criminal Action Independent of Each Other, the Former Is Not Prejudicial to the Latter
In one case, the buyers filed a criminal complaint against the officers of a realty company. The city prosecutor, in a resolution, dismissed the complaint for being premature. It was contended that a reasonable interpretation of PD 957 requires a prior determination by the HLURB that “a corporation violated PD 957 before criminal charges may be filed against the corporate officers.”
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Task Force to Monitor Investment Scheme in Real Estate Project
There are news of buyers who have invested hard earned money in the purchase of lots or condominium units but find themselves short changed has been a cause for alarm. They found that projects were either not existing or the housing units badly constructed.
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Prohibition Against Owner/Developer to Collect Fees for Community Benefit
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.
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