Real estate laws & regulations.

The Maceda Law (formally Republic Act No. 6552, the “Realty Installment Buyer Protection Act”), enacted August 26, 1972, protects buyers who purchase real estate on installment from arbitrary cancellation by sellers or developers.

What it covers: Residential real estate sold on installment payments — subdivision lots, residential houses, condominium units. It does not cover industrial lots, commercial buildings, or sales to tenants under agrarian reform.

Two tiers of protection:

Tier 1 — Buyers who paid less than 2 years of installments:

• Entitled to a 60-day grace period from the date the unpaid installment became due
• If still unable to pay, the seller may cancel after a 30-day notarial notice of cancellation
• No cash refund is required by law

Tier 2 — Buyers who paid 2+ years of installments:

• Entitled to a grace period of 1 month for every 1 year of installments paid (e.g., 5 years paid = 5 months grace)
• Right exercisable once every 5 years of the contract's life
• If contract is cancelled by notarial act, buyer is entitled to a Cash Surrender Value (CSV) refund:

Buyer's other rights:

• Right to sell or assign your contract rights to another buyer (instead of cancelling)
• Right to reinstate the contract by updating overdue payments during the grace period
• Right to pay in advance any installment or the full balance without interest penalty

Critical limitation: The Maceda Law applies only to installment sales directly with the seller/developer. Once a bank or Pag-IBIG releases your loan, the seller is fully paid, and Maceda no longer applies. Your remedies become bank-based: refinance, sell, or negotiate with your lender.

Source: RA 6552 (LawPhil) and DHSUD Maceda Law FAQs.

The Department of Human Settlements and Urban Development (DHSUD) is the successor agency to HLURB (Housing and Land Use Regulatory Board), created in 2019 under RA 11201. It regulates the residential real estate development industry in the Philippines.

What DHSUD regulates:

• Issuance of License to Sell (LTS) for subdivision and condominium projects
• Approval of project development plans and permits
• Enforcement of PD 957 (Subdivision and Condominium Buyers Protective Decree)
• Enforcement of the Maceda Law
• Resolution of disputes between buyers and developers
• Accreditation of real estate brokers and salespersons
• Registration of homeowners associations (HOAs)

How to file a complaint against a developer:

1. Gather all documents: Contract to Sell, Buyer Information Sheet, official receipts, marketing materials, correspondence with the developer.
2. Prepare a verified complaint stating the facts, the violations, and the relief you're seeking (refund, specific performance, damages, etc.).
3. File at the appropriate DHSUD Regional Office (where the project is located, not where you live).
4. Pay the filing fee (varies by case value).
5. Attend mediation. Most cases go through mandatory mediation first.
6. If mediation fails, the case proceeds to Adjudication before the DHSUD Adjudication Board.

Common case types: Project delays, unbuilt amenities, defective construction, unauthorized changes to plans, refund disputes, title transfer delays, illegal cancellation.

Tip: Before filing, send a written demand letter to the developer through registered mail or email. Many disputes resolve at this stage, and the demand letter strengthens your case if it goes to DHSUD.

Contact: dhsud.gov.ph

Republic Act No. 4726, the Condominium Act, enacted in 1966, is the law that makes condominium ownership in the Philippines legally possible. Without it, you'd only be able to own land, not airspace within a multi-unit building.

What the Condominium Act establishes:

• Condominium ownership as a separate, legally recognized form of property — you own your unit absolutely, plus a proportional undivided share of common areas (lobbies, hallways, gym, pool, etc.)
• The Condominium Corporation structure: every condo project has a corporation that holds the underlying land. Unit owners are shareholders.
• The Master Deed and Declaration of Restrictions: filed with the Registry of Deeds, these define the project's boundaries, common areas, voting rights, and rules.
• The Condominium Certificate of Title (CCT): your individual proof of ownership of your unit.
• The 40% foreign ownership cap on any single project (this is also enforced through this law).

What this means in practice:

• You own your unit but you must follow the condo's rules and pay association dues
• The condominium corporation can pass house rules through majority vote
• Major changes (e.g., demolishing the building, redeveloping, dissolving the corporation) require supermajority votes (typically 2/3 or higher)
• If 50%+ of the building is destroyed and not rebuilt, owners can vote to dissolve and sell the land

The Anti-Dummy Law (Commonwealth Act No. 108), enacted in 1936 and updated since, criminalizes the use of Filipino “dummies” to circumvent constitutional and statutory restrictions on foreign ownership.

What it prohibits:

• A Filipino citizen allowing their name or citizenship to be used to hide a foreigner's beneficial ownership of property or a business reserved for Filipinos
• A foreigner participating in a business or owning property reserved for Filipinos through a nominee arrangement
• Using fictitious Filipino owners, side agreements, or hidden trusts to disguise foreign control

Penalties:

• Imprisonment of 5 to 15 years for both the Filipino and the foreigner
• Fine equal to the value of the property or right involved
• Forfeiture of the property in favor of the Philippine government
• Disqualification from holding office or engaging in the same business

Common scenarios that trigger Anti-Dummy violations:

• A foreigner buying land in a Filipino spouse's name with a side agreement that the foreigner is the “real owner”
• Setting up a corporation where Filipinos hold 60% of shares on paper but the foreigner has voting control through preferred shares or shareholder agreements
• A foreigner buying land through a Filipino friend with an unregistered trust
• Foreign-controlled corporations holding land beyond the 40% equity cap

For foreign buyers: The legal paths are clear — condominium units (within the 40% cap), buildings on leased land, long-term land leases, or genuine 60-40 corporations with bona fide Filipino partners. Anything that disguises beneficial ownership creates serious criminal exposure.

Presidential Decree No. 957, issued in 1976, is the Philippines' primary consumer protection law for subdivision and condominium buyers. It creates the regulatory framework for licensing developers and protecting buyers from fraudulent or substandard projects.

Key buyer protections under PD 957:

• License to Sell required: Developers cannot legally sell or advertise pre-selling units without a License to Sell from DHSUD. Selling without one is a criminal offense.
• Performance bond: Developers must post a bond to ensure completion of promised facilities (roads, drainage, amenities).
• Mortgage disclosure: If the project is mortgaged to a bank, the buyer must be informed in writing, and the developer must release the mortgage on each unit upon full payment.
• Title transfer obligation: The developer must deliver clean title to the buyer upon full payment.
• No unilateral changes: The developer cannot change the approved plan, unit specifications, or amenities without DHSUD approval.
• Right to suspend payments: If the developer fails to complete the project per the approved plan, buyers can suspend payments after notice (and demand a full refund with interest).
• Refund with interest: If the project is cancelled or the developer materially defaults, buyers are entitled to a refund of all payments with legal interest.

Common PD 957 violations: Selling without a License to Sell, building defective units, failing to deliver promised amenities, project cancellation, mortgaging units without buyer disclosure, refusing to deliver title after full payment.

Complaints under PD 957 are filed with DHSUD (formerly HLURB).