MACEDA LAW, P.D. 957

• REPUBLIC ACT NO. 6552 is an act to provide protection to buyers of real estate on installment payments
• Realty Installment Buyer Protection Act


  The name of the MACEDA act
• The act declares it a public policy to protect buyers of real estate on installment payments against onerous and oppressive conditions
• Transactions covered by the Maceda Law

  • Sale or financing of real estate on installment payments, including residential condominium apartments
• Transactions not covered by the Maceda Law

  • Sales covering industrial lots
  • Sales covering commercial buildings (and commercial lots by implication)
  • Sales to tenants under agrarian reforms laws
• Categories of buyers accorded protection under the Maceda Law

  • Buyers with less than 2 years of installments
  • Buyers with at least 2 years of installments
• Rights of a defaulting buyer with less than 2 years of installments


  • Right to pay, without additional interest, any installment due within a 60-day grace period
  • Right to receive a 30-day notarial notice of cancellation before contract can be cancelled
  • Right to sell or assign rights
  • Right to reinstate contract by updating account during grace period
  • Right to pay in advance any installments or full unpaid balance without interest
  • Right to have full payment annotated in title
• Rights of a defaulting buyer with at least 2 years of installments


  • Right to pay without additional interest the unpaid installments due within the total grace period earned (1 month per year of payments)
  • Right to receive a 30-day notarial notice of cancellation
  • Right to refund of cash surrender value (50% of total payments, increasing 5% per year after 5 years up to 90%)
  • Right to sell or assign rights
  • Right to reinstate contract by updating account during grace period
  • Right to pay in advance any installments or full unpaid balance without interest
  • Right to have full payment annotated in title
• Mandatory twin requirements for valid cancellation under Maceda Law

  1. Seller sends notarized notice of cancellation to buyer

  2. Seller refunds cash surrender value to buyer
• Until seller complies with these twin requirements, the contract remains valid and buyer can reinstate by updating account
• Any stipulation contrary to the Maceda Law provisions is null and void
• PRESIDENTIAL DECREE No. 957 regulates the sale of subdivision lots and condominiums, providing penalties for violations
• The decree aims to afford decent human settlement and improve quality of life, address issues of unscrupulous developers, and closely supervise and regulate the real estate subdivision and condominium businesses
• Real estate dealer


  Any person directly engaged as principal in the business of buying, selling or exchanging real estate whether on a full-time or part-time basis
• Broker


  Any person who, for commission or other compensation, undertakes to sell or negotiate the sale of a real estate belonging to another
• Salesman


  Person regularly employed by a broker to perform, for and in his behalf, any or all functions of a real estate broker
• Authority


  The National Housing Authority
• Registration of projects


  1. Registered owner submits subdivision plan to Authority

  2. Authority approves plan if it complies with Subdivision Standards and Regulations

  3. Subdivision plan submitted to Director of Lands for approval

  4. Condominium plan submitted to Register of Deeds for approval
• Registration statement


  1. Owner/dealer files sworn registration statement with Authority

  2. Documents attached: subdivision/condominium plan, marketing materials, business information
• Publication of registration

  1. Authority publishes notice of registration filing in newspapers

  2. Registration statement and attached documents open for public inspection
• Obtaining license to sell

  1. Owner/dealer applies for license to sell registered project

  2. Authority issues license if owner/dealer is of good repute, financially stable, and sale would not be fraudulent
• Performance bond


  Bond required to guarantee construction and maintenance of subdivision/condominium infrastructure and compliance with laws
• Exempt transactions


  • Sale of subdivision lot from partition of land among co-owners/co-heirs
  • Resale of subdivision lot by original purchaser
  • Sale of subdivision lot/condominium unit by mortgagee
• Suspension of license to sell

  1. Authority may suspend license upon complaint or if registration statement is misleading/incorrect

  2. Suspension lifted if deficiencies corrected or complaint dismissed
• Revocation of registration and license

  Authority may revoke registration and license if owner/dealer is insolvent, violates laws/regulations, engages in fraud, or is of bad business repute
• Registers of subdivision lots and condominium units are kept by the Authority and open to public inspection
• Registration of dealers, brokers and salesmen

  1. Dealers, brokers and salesmen must register with Authority

  2. Authority registers applicants if they are of good repute and comply with rules

  3. Registrations expire annually and must be renewed
• Revocation of dealer, broker or salesman registration

  1. Authority may revoke registration if registrant violates laws/regulations, makes false statements, engages in fraud, or is unworthy to transact business

  2. Suspension or revocation of dealer/broker registration also suspends/revokes their salesmen's registrations
• Hearing procedure for revocation


  1. Respondent must be notified and given opportunity to be heard

  2. Proceedings are non-litigious and summary in nature

  3. Hearing officer has power to administer oaths, subpoena witnesses, conduct inspections, take depositions, and require production of records
• Contempt powers


  1. Hearing officer may summarily punish direct contempt

  2. Hearing officer may also adjudge indirect contempt
• Decision


  1. Case must be decided within 30 days

  2. Decision may order revocation of registration, suspension/cancellation of license, and forfeiture of performance bond
• Direct contempt


  Person found guilty shall be punished by a fine not exceeding Fifty (P50.00) Pesos or imprisonment not exceeding five (5) days, or both
• Indirect contempt


  The officer or officers designated to hear the complaint may also adjudge any person in indirect contempt on grounds and in the manner prescribed in Rule 71 of the Revised Rules of Court
• Decision


  1. Shall be decided within thirty (30) days from the time the same is submitted for decision

  2. May order the revocation of the registration of the subdivision or condominium project, the suspension, cancellation, or revocation of the license to sell and/or forfeiture, in whole or in part, of the performance bond

  3. In case forfeiture of the bond is ordered, the Decision may direct the provincial or city engineer to undertake or cause the construction of roads and of other requirements for the subdivision or condominium as stipulated in the bond, chargeable to the amount forfeited

  4. Shall be immediately executory and shall become final after the lapse of 15 days from the date of receipt of the Decision
• Cease and Desist Order


  Whenever it shall appear to the Authority that any person is engaged or about to engage in any act or practice which constitutes or will constitute a violation of the provisions of this Decree, or of any rule or regulation thereunder, it may, upon due notice and hearing, issue a cease and desist order to enjoin such act or practices
• Registration


  1. All contracts to sell, deeds of sale and other similar instruments relative to the sale or conveyance of the subdivision lots and condominium units, whether or not the purchase price is paid in full, shall be registered by the seller in the Office of the Register of Deeds

  2. Whenever a subdivision plan duly approved in accordance with Section 4 hereof, together with the corresponding owner's duplicate certificate of title, is presented to the Register of Deeds for registration, the Register of Deeds shall register the same in accordance with the provisions of the Land Registration Act, as amended
• Mortgages

  1. No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the Authority

  2. 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

  3. 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 thereto
• Advertisements

  1. Advertisements that may be made by the owner or developer through newspaper, radio, television, leaflets, circulars or any other form about the subdivision or the condominium or its operations or activities must reflect the real facts and must be presented in such manner that will not tend to mislead or deceive the public

  2. The owner or developer shall answerable and liable for the facilities, improvements, infrastructures or other forms of development represented or promised in brochures, advertisements and other sales propaganda disseminated by the owner or developer or his agents and the same shall form part of the sales warranties enforceable against said owner or developer, jointly and severally
• Time of Completion


  Every owner or developer shall construct and provide the facilities, improvements, infrastructures and other forms of development, including water supply and lighting facilities, which are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus, printed matters, letters or in any form of advertisement, within one year from the date of the issuance of the license for the subdivision or condominium project or such other period of time as may be fixed by the Authority
• Sales Prior to Decree

  In cases of subdivision lots or condominium units sold or disposed of prior to the effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or condominium project to complete compliance with his or its obligations as provided in the preceding section within two years from the date of this Decree unless otherwise extended by the Authority or unless an adequate performance bond is filed in accordance with Section 6 hereof