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• Maceda and Recto Law


  Laws intended to protect buyers of real estate on installment payments
• Intended Learning Outcomes: Explain Maceda and Recto Law; and Apply appropriately the corresponding provisions of said laws taking into consideration varying circumstances involved
• Realty Installment Buyer Protection Act


  Law to protect buyers of real estate on installment payments against onerous and oppressive conditions
• Includes


  • Sale or financing of real estate on installment payments, including residential condominium apartments
• Excludes


  • Industrial lots, commercial buildings and sales to tenants under RA 3844
• Cash Surrender Value


  • Less than 2 years- NO REFUND
  • More than 2 years – 5 years- 50%
  • More than 5 years- 50% + additional 5% for every year but not to exceed 90%
• Cash Surrender Value (CSV)

  TP (Total Payments) x % Refund= CSV
• Assignment or Reinstatement


  Buyer has a right to sell or assign his rights over the lot or unit to another person or reinstate the contract by updating the account during the grace period and before actual cancellation of the contract
• Right to Pay in Advance

  The buyer has the right to pay in advance any installments or the full unpaid balance without interest any time and have such full payment annotated in the title
• Recto Law


  Law to remedy the abuses committed in connection with the foreclosure of chattel mortgages and was meant to prevent mortgagees from seizing the mortgaged property, buying it at foreclosure sale for a low price and then bringing suit against the mortgagor for a deficiency judgment
• When applicable?
• Remedies under Article 1484 of the New Civil Code


  • Exact fulfillment of the obligation, should the buyer fail to pay any installment
  • Cancel the sale, should the buyer's failure to pay cover two or more installments
  • Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the buyer's failure to pay cover two or more installments
• What is a Condominium?
• Condominium


  Interest in real property consisting of a separate interest in a unit in a residential, industrial, or commercial building and an undivided interest in common in the land and other common areas of the building
• Unit


  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 part or parts of floors) in a building or buildings and such accessories as may be appended thereto
• Project


  The entire parcel of real property divided or to be divided in condominiums, including all structures thereon
• Common areas


  The entire project excepting all units separately granted or held or reserved
• Who can own a Condominium?
• Foreign ownership limit


  • Foreigners can buy and own condo units in the Philippines
  • Foreign ownership within a particular condominium building must not surpass 40%
  • As long as 40% has not been reached, foreigners may freely purchase freehold condominium units
• Rights of a Condominium Owner

  • Absolute ownership of unit
  • Limited ownership of walls, ceilings and floors
  • Co-ownership of land and common areas in proportion to units owned
  • Exclusive easements of airspace within unit
  • Non-exclusive easement to common areas
  • Right to repair and decorate
  • Sell, lease and mortgage unit
  • To vote and be voted upon the corporation
• Master Deed


  • A description of the land, building, common areas, and facilities
  • State the nature of the interest acquired by the purchaser in the separate units and common areas
  • Include plans of the land and building, as well as any reasonable restrictions on alienation or disposal of the condominium
  • Can be amended or revoked with the consent of the registered owner and holders of any lien or encumbrance on the property
• Dissolution of Corporation


  • In case of involuntary dissolution, the common areas owned by the corporation are transferred to the members or stockholders in proportion to their interest, subject to the rights of creditors
  • Upon voluntary dissolution, the corporation may sell the entire project and liquidate the interests of the owners
  • The corporation may also be dissolved by the affirmative vote of all stockholders or members
• Pledge, Real Mortgage, Antichresis and Chattel Mortgage
• Common Provisions to Pledge and Mortgage
• Indivisibility of Pledge and Mortgage
• Pledge


  Contract by virtue of which the debtor delivers to the creditor or to the third person a movable or instrument evidencing incorporeal rights for the purpose of securing the fulfillment of a principal obligations and once fulfilled, the thing delivered shall be returned with all the fruits and accessions
• Rights of Pledgee


  • To claim a substitute or demand immediate payment
  • To sell the thing pledged at public auction
  • To bid at the public sale
  • To collect the amount that become due
  • To choose which one of the several thing pledged shall be sold
• Obligations of the pledgee

  • Not to use the thing pledged unless authorized or its preservation so requires
  • To advise the pledgor without delay of any danger to the thing pledged
  • To promptly advise the pledgor or owner in case of sale at public auction of the result thereof
  • To return the thing pledged when the principal obligation is paid
• Rights of Pledgor
• Obligations of the Pledgor
• Extrajudicial Foreclosure Sale
• Rules on the proceeds after sale of the thing pledged

  • Price of sale more than the amount due - debtor is not entitled to the excess unless otherwise agreed upon
  • Price of sale less than the amount due- creditor is not entitled to recover any deficiency notwithstanding any stipulation to the contrary
  • Note: The creditor may sue on the principal obligation instead of electing to sell the thing pledged
  • In pledge by operation of law after payment of the debt and expenses, the remainder of the price shall be delivered to the obligor
  • Under the Chattel Mortgage Law, the mortgagor can also recover the excess
• Extinguishment of Pledge
• Real Estate Mortgage


  Contract whereby the debtor secures to the creditor the fulfillment of the principal obligation, subjecting such immovable property or real rights in case the principal obligation is not complied with
• Characteristics of Real Estate Mortgage
• Kinds of Mortgage
• Effects of Mortgage
• Scope of Mortgage
• Foreclosure


  Remedy available to the mortgagee by which he subject the mortgaged property to the satisfaction of the obligation to secure which the mortgage was given through the sale of the property at public auction and the application of the proceeds to the payment of his claims
• Kinds of Foreclosure