Dear PAO,
My friend was named by his cousins as their attorney-in-fact in a
Special Power of Attorney which they have executed relating to their
properties here in the Philippines since they are domiciled abroad. My
friend had the 2,000 square meter lot and the house leased at P2,500 a
month, but there was no written contract. The problem is that the lessee
has not paid the rentals since October 2012 and is even asking my
friend to pay him the amount he spent for the improvements made in the
properties. He warned my friend that a case will be filed against him if
he will not settle the amount. What can my friend do to force the
lessee to leave the properties which are the subject of the lease
agreement?
Pia
Dear Pia,
Both parties in a contract of lease have respective obligations to
fulfill. For one, the lessor is obliged, during the subsistence of the
contract of lease, to make all the necessary repairs to the object of
their contract in order to keep the same suitable for the use to which
it has been devoted, unless there is a stipulation to the contrary
(Article 1654 (2), New Civil Code [NCC]). In so far as the lessee is
concerned, he or she is obliged, among others, to pay the price of the
lease according to the terms stipulated in their contract (Article 1657
(1), NCC).
Should either the lessor or the lessee fail to comply with his or her
obligation, the aggrieved party may ask for the rescission of the
contract of lease and indemnification for damages, or allow the contract
to remain in force but seek for indemnification for damages he has
incurred (Article 1659, NCC). The lessee also has the option of
suspending the payment of his rent if the lessor fails to make the
necessary repairs or to maintain the lessee in peaceful and adequate
enjoyment of the property leased and he may order the costs be
attributable to the lessor if the latter has failed to make urgent
repairs (Article 1658 and Article 1663 (4), NCC).
In the situation that you have presented before us, we cannot
conclude with certainty whether your friend, as the representative of
the owners of the property, is obliged to indemnify the lessee. While it
may be true that certain works have been made by the lessee in the
properties leased, it is not clear to us whether such were in the nature
of necessary repairs. Accordingly, the lessee may not lawfully suspend
the payment of his rent. Neither is there is any showing that such works
were made as part of urgent repairs to the properties. Hence, the
lessee may not order that the same be placed at the cost of the lessor
or his representative.
Since the lessee has failed to comply with his obligation of paying
the rent which has became due since October 2012, your friend may opt to
file for judicial ejectment against the lessee. Pursuant to Section 9
of Republic Act No. 9653, otherwise known as the Rent Control Act of
2009, “Ejectment shall be allowed on the following grounds: x x x (b)
Arrears in payment of rent for a total of three months: x x x”
We hope that we were able to answer your queries. Please be reminded
that this advice is based solely on the facts you have narrated and our
appreciation of the same. Our opinion may vary when other facts are
changed or elaborated.
Wednesday, November 13, 2013
Saturday, November 9, 2013
Title to property immaterial in cases of forcible entry
Dear PAO,
My brother and his family used to live in a small residential lot which is subject of a land dispute. Although my brother admits that he has no legal title on the subject land, he has been living in that place for more than a decade now. No case was filed yet nor a court order was issued regarding this dispute but the other party already forced my brother and his family out of their residence through threats and physical force with the assistance of some armed men. Since then, they have been using my brother’s residence as a warehouse.
What case should my brother file to get back his house and to complain the persons who threatened and removed him from his residence? Can he legally complain even without having a land title on his occupied land? We hope for your legal advice on this matter. Thank you and more power!
Bill
Dear Bill,
Based from your narration of your brother’s situation, he may file an action for forcible entry against the people who removed him and his family from his residence.
An action for forcible entry is warranted when “…a person is deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, xxx” (Section 1, Rule 70, Revised Rules of Court). In your brother’s case, the use of force and threats justifies the filing of forcible entry. This action may be filed before the proper Metropolitan Trial Court or Municipal Trial Court, as the case may be, within one (1) year after the unlawful deprivation of the property for the purpose of recovering the possession of the property with damages and costs.
Furthermore, your brother’s lack of land title on the said disputed lot does not bar him from filing an action for forcible entry because the main issue in these kinds of action is the mere physical possession of the property and not the ownership of the said property. This is because in forcible entry cases, the actual condition of the title to the property is largely immaterial. What is important is that “…the party in peaceable and quiet possession shall not be turned out by strong hand, violence, or terror. A party out of possession must respect and resort to the law alone to obtain what he claims is his” (Edgardo L. Paras, Rules of Court Annotated, 1st edition, p. 162, citing Supia and Batioco vs. Quintero and Ayala, 59 Phil. 312).
Thus, in hearing a forcible entry complaint, the court will generally not rule on the ownership of the subject property considering that your brother has no land title on the subject land. The court’s adjudication, in these cases, is limited to the determination of who between the opposing parties has the better right to possess the same.
Once your brother has proven his allegations, the court where the action was filed may restore him as the rightful possessor of the subject property.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
source: Manila Times Column of Atty Persida Acosta
My brother and his family used to live in a small residential lot which is subject of a land dispute. Although my brother admits that he has no legal title on the subject land, he has been living in that place for more than a decade now. No case was filed yet nor a court order was issued regarding this dispute but the other party already forced my brother and his family out of their residence through threats and physical force with the assistance of some armed men. Since then, they have been using my brother’s residence as a warehouse.
What case should my brother file to get back his house and to complain the persons who threatened and removed him from his residence? Can he legally complain even without having a land title on his occupied land? We hope for your legal advice on this matter. Thank you and more power!
Bill
Dear Bill,
Based from your narration of your brother’s situation, he may file an action for forcible entry against the people who removed him and his family from his residence.
An action for forcible entry is warranted when “…a person is deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, xxx” (Section 1, Rule 70, Revised Rules of Court). In your brother’s case, the use of force and threats justifies the filing of forcible entry. This action may be filed before the proper Metropolitan Trial Court or Municipal Trial Court, as the case may be, within one (1) year after the unlawful deprivation of the property for the purpose of recovering the possession of the property with damages and costs.
Furthermore, your brother’s lack of land title on the said disputed lot does not bar him from filing an action for forcible entry because the main issue in these kinds of action is the mere physical possession of the property and not the ownership of the said property. This is because in forcible entry cases, the actual condition of the title to the property is largely immaterial. What is important is that “…the party in peaceable and quiet possession shall not be turned out by strong hand, violence, or terror. A party out of possession must respect and resort to the law alone to obtain what he claims is his” (Edgardo L. Paras, Rules of Court Annotated, 1st edition, p. 162, citing Supia and Batioco vs. Quintero and Ayala, 59 Phil. 312).
Thus, in hearing a forcible entry complaint, the court will generally not rule on the ownership of the subject property considering that your brother has no land title on the subject land. The court’s adjudication, in these cases, is limited to the determination of who between the opposing parties has the better right to possess the same.
Once your brother has proven his allegations, the court where the action was filed may restore him as the rightful possessor of the subject property.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
source: Manila Times Column of Atty Persida Acosta
Sunday, September 22, 2013
SALES: Special Power of Attorney required for agent to sell land
In the 1950s, a woman leased a parcel of land with improvements from
the siblings, who inherited the said land from their deceased parents.
In 1988, the siblings offered to sell the property to the woman for
P500,000. Although the woman accepted the offer, the sale did not
materialize due to the fault of the landowners. Nonetheless, the woman
and her family continued to occupy and use the property with the consent
of the siblings.
In 1994, the woman’s son desired to renew his mother’s option to purchase the subject property. After a series of negotiations with the eldest of the siblings who introduced himself as representing the other landowners, they entered into an oral contract of sale. A year after, he made partial payments amounting to P160,000, which the eldest sibling duly acknowledged and received. But despite his numerous attempts to pay the remaining balance, the son was unable to do so because the eldest sibling avoided him.
In 1997, the son demanded that the siblings execute a Deed of Absolute Sale in exchange for the full payment of the agreed price. Because his demand remained unheeded, he filed a complaint against them for specific performance with damages. He likewise sought to nullify the subsequent sale of said property when he discovered that it was sold to another buyer.
The Regional Trial Court upheld the validity of the oral contract of sale between the woman’s son and the eldest sibling. It ordered the siblings to execute a Deed of Absolute Sale in favor of the son upon payment of the balance and nullified the subsequent sale to the other buyer.
On appeal, the Court of Appeals (CA) modified the lower court’s decision. It upheld the validity of the oral contract of sale between the son and the eldest sibling only insofar as the share of latter in the property is concerned. Based on its findings, it was only the eldest sibling who consented to the sale. For want of authority to sell the other portions of the land belonging to his siblings, the eldest sibling is deemed to have only sold his aliquot share in the property.
In affirming the ruling of the CA, the Supreme Court emphasized the requirement of a Special Power of Attorney (SPA) before an agent may sell immovable property. Article 1878 of the Civil Code requires the execution of a SPA for an agent “to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration.” Likewise, Article 1874 of the same Code states that “when the sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.”
In this case, the eldest sibling had no SPA or written authority from his siblings, his co-owners, to sell the subject property. Hence, the sale of the portions of the property belonging to the other siblings is invalid. When the woman’s son relied on the words of the eldest sibling without first securing a copy of the SPA in favor of the latter, he did so at his own risk and must, therefore, be bound by it. Regarding this matter, the High Court has held - Persons dealing with an assumed agency, whether [it] be a general or special one, are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it (Recio v. Heirs of Altamirano, G.R. No. 182349, 24 July 2013, J. Reyes).
source: Manila Times Column of Benchpress
In 1994, the woman’s son desired to renew his mother’s option to purchase the subject property. After a series of negotiations with the eldest of the siblings who introduced himself as representing the other landowners, they entered into an oral contract of sale. A year after, he made partial payments amounting to P160,000, which the eldest sibling duly acknowledged and received. But despite his numerous attempts to pay the remaining balance, the son was unable to do so because the eldest sibling avoided him.
In 1997, the son demanded that the siblings execute a Deed of Absolute Sale in exchange for the full payment of the agreed price. Because his demand remained unheeded, he filed a complaint against them for specific performance with damages. He likewise sought to nullify the subsequent sale of said property when he discovered that it was sold to another buyer.
The Regional Trial Court upheld the validity of the oral contract of sale between the woman’s son and the eldest sibling. It ordered the siblings to execute a Deed of Absolute Sale in favor of the son upon payment of the balance and nullified the subsequent sale to the other buyer.
On appeal, the Court of Appeals (CA) modified the lower court’s decision. It upheld the validity of the oral contract of sale between the son and the eldest sibling only insofar as the share of latter in the property is concerned. Based on its findings, it was only the eldest sibling who consented to the sale. For want of authority to sell the other portions of the land belonging to his siblings, the eldest sibling is deemed to have only sold his aliquot share in the property.
In affirming the ruling of the CA, the Supreme Court emphasized the requirement of a Special Power of Attorney (SPA) before an agent may sell immovable property. Article 1878 of the Civil Code requires the execution of a SPA for an agent “to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration.” Likewise, Article 1874 of the same Code states that “when the sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.”
In this case, the eldest sibling had no SPA or written authority from his siblings, his co-owners, to sell the subject property. Hence, the sale of the portions of the property belonging to the other siblings is invalid. When the woman’s son relied on the words of the eldest sibling without first securing a copy of the SPA in favor of the latter, he did so at his own risk and must, therefore, be bound by it. Regarding this matter, the High Court has held - Persons dealing with an assumed agency, whether [it] be a general or special one, are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it (Recio v. Heirs of Altamirano, G.R. No. 182349, 24 July 2013, J. Reyes).
source: Manila Times Column of Benchpress
WILLS: Testators presumed to be of sound mind
Dear PAO,
I would like to ask for your legal advice regarding the last will and testament of my deceased father. My other siblings contest my father’s will by alleging that he was not in the right mind when he made his last will since he was already very old during that time. My father was around 80 yrs old when he made his last will but I believe that he was still aware and in the right mind when he made it. How would I prove that my father was in his right mind when he made the will?
Richie
Dear Richie,
It is not for you to prove that your father was of sound mind when he made his will. Rather, it is up to your siblings to prove their allegation that your father was not in the right mind at the time of the execution of his will. This is because the law gives the presumption that a person making a will is of sound mind unless proven otherwise.
The law on testamentary capacity clearly states that:
“Article 800. The law presumes that every person is of sound mind, in the absence of proof to the contrary.
The burden of proof that the testator was not of sound mind at the time of making his dispositions is on the person who opposes the probate of the will; but if the testator, one month, or less, before making his will was publicly known to be insane, the person who maintains the validity of the will must prove that the testator made it during a lucid interval” (Civil Code of The Philippines).
As explicitly provided by the law, it is up to those who oppose the will to prove the absence of a sound mind by the testator. On the other hand, you will only be required to prove the sanity of your father as the testator if he was previously known to be insane before he made the will.
Furthermore, one’s legal capacity to make a will is unhampered by mere old age since the law precisely states how to determine if the testator was of sound mind in relation to the execution of his will, to which it states that:
“Article 799. To be of sound mind, it is not necessary that the testator be in full possession of all his reasoning faculties, or that his mind be wholly unbroken, unimpaired, or unshattered by disease, injury or other cause.
It shall be sufficient if the testator was able at the time of making the will to know the nature of the estate to be disposed of, the proper objects of his bounty, and the character of the testamentary act” (Civil Code of The Philippines).
Thus, it is the testator’s awareness and knowledge on the nature of his estate being disposed, the particular object involved, and the character of his testamentary act, which are ultimately considered in determining whether he is of sound mind when he executed the will.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
source: Manila Times Column by Atty Persida Acosta
I would like to ask for your legal advice regarding the last will and testament of my deceased father. My other siblings contest my father’s will by alleging that he was not in the right mind when he made his last will since he was already very old during that time. My father was around 80 yrs old when he made his last will but I believe that he was still aware and in the right mind when he made it. How would I prove that my father was in his right mind when he made the will?
Richie
Dear Richie,
It is not for you to prove that your father was of sound mind when he made his will. Rather, it is up to your siblings to prove their allegation that your father was not in the right mind at the time of the execution of his will. This is because the law gives the presumption that a person making a will is of sound mind unless proven otherwise.
The law on testamentary capacity clearly states that:
“Article 800. The law presumes that every person is of sound mind, in the absence of proof to the contrary.
The burden of proof that the testator was not of sound mind at the time of making his dispositions is on the person who opposes the probate of the will; but if the testator, one month, or less, before making his will was publicly known to be insane, the person who maintains the validity of the will must prove that the testator made it during a lucid interval” (Civil Code of The Philippines).
As explicitly provided by the law, it is up to those who oppose the will to prove the absence of a sound mind by the testator. On the other hand, you will only be required to prove the sanity of your father as the testator if he was previously known to be insane before he made the will.
Furthermore, one’s legal capacity to make a will is unhampered by mere old age since the law precisely states how to determine if the testator was of sound mind in relation to the execution of his will, to which it states that:
“Article 799. To be of sound mind, it is not necessary that the testator be in full possession of all his reasoning faculties, or that his mind be wholly unbroken, unimpaired, or unshattered by disease, injury or other cause.
It shall be sufficient if the testator was able at the time of making the will to know the nature of the estate to be disposed of, the proper objects of his bounty, and the character of the testamentary act” (Civil Code of The Philippines).
Thus, it is the testator’s awareness and knowledge on the nature of his estate being disposed, the particular object involved, and the character of his testamentary act, which are ultimately considered in determining whether he is of sound mind when he executed the will.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
source: Manila Times Column by Atty Persida Acosta
Monday, September 16, 2013
SALES: Special Power of Attorney required for agent to sell land
In the 1950s, a woman leased a parcel of land with improvements from
the siblings, who inherited the said land from their deceased parents.
In 1988, the siblings offered to sell the property to the woman for
P500,000. Although the woman accepted the offer, the sale did not
materialize due to the fault of the landowners. Nonetheless, the woman
and her family continued to occupy and use the property with the consent
of the siblings.
In 1994, the woman’s son desired to renew his mother’s option to purchase the subject property. After a series of negotiations with the eldest of the siblings who introduced himself as representing the other landowners, they entered into an oral contract of sale. A year after, he made partial payments amounting to P160,000, which the eldest sibling duly acknowledged and received. But despite his numerous attempts to pay the remaining balance, the son was unable to do so because the eldest sibling avoided him.
In 1997, the son demanded that the siblings execute a Deed of Absolute Sale in exchange for the full payment of the agreed price. Because his demand remained unheeded, he filed a complaint against them for specific performance with damages. He likewise sought to nullify the subsequent sale of said property when he discovered that it was sold to another buyer.
The Regional Trial Court upheld the validity of the oral contract of sale between the woman’s son and the eldest sibling. It ordered the siblings to execute a Deed of Absolute Sale in favor of the son upon payment of the balance and nullified the subsequent sale to the other buyer.
On appeal, the Court of Appeals (CA) modified the lower court’s decision. It upheld the validity of the oral contract of sale between the son and the eldest sibling only insofar as the share of latter in the property is concerned. Based on its findings, it was only the eldest sibling who consented to the sale. For want of authority to sell the other portions of the land belonging to his siblings, the eldest sibling is deemed to have only sold his aliquot share in the property.
In affirming the ruling of the CA, the Supreme Court emphasized the requirement of a Special Power of Attorney (SPA) before an agent may sell immovable property. Article 1878 of the Civil Code requires the execution of a SPA for an agent “to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration.” Likewise, Article 1874 of the same Code states that “when the sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.”
In this case, the eldest sibling had no SPA or written authority from his siblings, his co-owners, to sell the subject property. Hence, the sale of the portions of the property belonging to the other siblings is invalid. When the woman’s son relied on the words of the eldest sibling without first securing a copy of the SPA in favor of the latter, he did so at his own risk and must, therefore, be bound by it. Regarding this matter, the High Court has held - Persons dealing with an assumed agency, whether [it] be a general or special one, are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it (Recio v. Heirs of Altamirano, G.R. No. 182349, 24 July 2013, J. Reyes).
source: Manila Times' Column of Benchpress
In 1994, the woman’s son desired to renew his mother’s option to purchase the subject property. After a series of negotiations with the eldest of the siblings who introduced himself as representing the other landowners, they entered into an oral contract of sale. A year after, he made partial payments amounting to P160,000, which the eldest sibling duly acknowledged and received. But despite his numerous attempts to pay the remaining balance, the son was unable to do so because the eldest sibling avoided him.
In 1997, the son demanded that the siblings execute a Deed of Absolute Sale in exchange for the full payment of the agreed price. Because his demand remained unheeded, he filed a complaint against them for specific performance with damages. He likewise sought to nullify the subsequent sale of said property when he discovered that it was sold to another buyer.
The Regional Trial Court upheld the validity of the oral contract of sale between the woman’s son and the eldest sibling. It ordered the siblings to execute a Deed of Absolute Sale in favor of the son upon payment of the balance and nullified the subsequent sale to the other buyer.
On appeal, the Court of Appeals (CA) modified the lower court’s decision. It upheld the validity of the oral contract of sale between the son and the eldest sibling only insofar as the share of latter in the property is concerned. Based on its findings, it was only the eldest sibling who consented to the sale. For want of authority to sell the other portions of the land belonging to his siblings, the eldest sibling is deemed to have only sold his aliquot share in the property.
In affirming the ruling of the CA, the Supreme Court emphasized the requirement of a Special Power of Attorney (SPA) before an agent may sell immovable property. Article 1878 of the Civil Code requires the execution of a SPA for an agent “to enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration.” Likewise, Article 1874 of the same Code states that “when the sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.”
In this case, the eldest sibling had no SPA or written authority from his siblings, his co-owners, to sell the subject property. Hence, the sale of the portions of the property belonging to the other siblings is invalid. When the woman’s son relied on the words of the eldest sibling without first securing a copy of the SPA in favor of the latter, he did so at his own risk and must, therefore, be bound by it. Regarding this matter, the High Court has held - Persons dealing with an assumed agency, whether [it] be a general or special one, are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it (Recio v. Heirs of Altamirano, G.R. No. 182349, 24 July 2013, J. Reyes).
source: Manila Times' Column of Benchpress
Wednesday, September 11, 2013
Rent control law covers residential units with monthly rent of P10,000 and below
Dear PAO,
I am renting a condo unit for P15,000 a month. The owner would like to increase the rent to P17,000 a month, four months before the end of the lease contract. Is this not in violation of the Rent Control Law?
Peter
I am renting a condo unit for P15,000 a month. The owner would like to increase the rent to P17,000 a month, four months before the end of the lease contract. Is this not in violation of the Rent Control Law?
Peter
Dear Peter,
The law you are referring to in your letter is Republic Act (R.A.) No. 9653 or the Rent Control Act of 2009. Under this law, the lessor of a residential unit may not increase the rent by more than 7% per annum as long as the unit is occupied by the same lessee (Section 4, R.A. No. 9653).
The law you are referring to in your letter is Republic Act (R.A.) No. 9653 or the Rent Control Act of 2009. Under this law, the lessor of a residential unit may not increase the rent by more than 7% per annum as long as the unit is occupied by the same lessee (Section 4, R.A. No. 9653).
A residential unit as defined by the said law is as follows:
“Residential unit shall refer to an apartment, house and/or land on which another’s dwelling is located and used for residential purposes and shall include not only buildings, part or units thereof used solely as dwelling places, boarding houses, dormitories, rooms and bedspaces offered for rent by their owners, except motels, motel rooms, hotels, hotel rooms, but also those used for home industries, retail stores or other business purposes if the owner thereof and his or her family actually live therein and use it principally for dwelling purposes.”
However, only those residential units where the monthly rent does not exceed P10,000.00 in Metro Manila and other highly urbanized city or P5,000.00 in other places are covered by the said law (Section 4, RA No. 9653).
Since, your monthly rent exceeds the amounts aforementioned, you are not covered by the said law. Thus, the owner of the condominium unit you are renting may increase the amount of rent. Nevertheless, he may do so only after the expiration of the period as stipulated in the contract of lease. In other words, he cannot amend the provision of the lease contract insofar as the monthly rental is concerned, unless you are amenable to the same. If he insists on collecting higher rent than what was agreed upon, he is violating the said contract which will entitle you to either rescind or cause the fulfilment of the terms and conditions of the contract which was violated plus damages in either case (Article 1191, New Civil Code of the Philippines).
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
source: Manila Times Column of Atty Persida Acosta
Sunday, July 21, 2013
Claiming refund for recalled subdivision project
Dear PAO,
I have been paying for three years for a house and lot in a subdivision located in the Bicol Region. I am supposed to complete payment two years from now. Unfortunately, the developer contacted us to inform that the subdivision project was recalled and it shall refund the money we have paid. We called the developer’s main office to fix the refund but they are giving us a hard time. Finally, the accounting department confirmed to us that we can only refund half of what we paid citing the Maceda Law. I believe that this is unfair since there is no fault on our part.
Mr. Cinco
Dear Mr. Cinco,
The Maceda Law or Republic Act (R.A.) No. 6552 otherwise known as “Realty Installment Buyer Protection Act” affords buyers on installment on the sale of real estate properties including residential condominium apartments certain rights where they have defaulted in the payment of succeeding installments. The buyer’s rights under the law include, among others: a) To pay, without additional interest, the unpaid installments due within the total grace period earned by him which is hereby fixed at the rate of one month grace period for every one year of installment payments made: Provided, That this right shall be exercised by the buyer only once in every five years of the life of the contract and its extensions, if any.; (b) If the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty per cent of the total payments made, and, after five years of installments, an additional five per cent every year but not to exceed ninety per cent of the total payments made: Provided, That the actual cancellation of the contract shall take place after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act and upon full payment of the cash surrender value to the buyer.
Accordingly, a buyer shall be entitled to refund in case his contract with the seller of the real estate property is cancelled. However, the said provision of R.A. No. 6552 shall be applicable only in case the buyer has made defaults in his succeeding payments. In your situation, the said law cannot be applicable in the cancellation of the developer of the contract involving the sale of a house and lot in a subdivision located in the Bicol region since the same was cancelled not because you defaulted in the payment of your installments. Indeed, the reason for the said cancellation, according to you, was the recall of the subdivision project. Thus, the failure on the part of the developer entitles you, among others, to rescind the contract with payment of damages (Article 1191, Civil Code). You may first send a demand letter to the developer to inform them of your demand. Thereafter, you may file a case in court when the developer refused to give in with your demand. You may also inquire with the Housing and Land Use Regulatory Board (HLURB) for administrative liability of the said developer in its failure to comply with its obligation.
We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
source: Manila Times' Column of Atty Persida Acosta
I have been paying for three years for a house and lot in a subdivision located in the Bicol Region. I am supposed to complete payment two years from now. Unfortunately, the developer contacted us to inform that the subdivision project was recalled and it shall refund the money we have paid. We called the developer’s main office to fix the refund but they are giving us a hard time. Finally, the accounting department confirmed to us that we can only refund half of what we paid citing the Maceda Law. I believe that this is unfair since there is no fault on our part.
Mr. Cinco
Dear Mr. Cinco,
The Maceda Law or Republic Act (R.A.) No. 6552 otherwise known as “Realty Installment Buyer Protection Act” affords buyers on installment on the sale of real estate properties including residential condominium apartments certain rights where they have defaulted in the payment of succeeding installments. The buyer’s rights under the law include, among others: a) To pay, without additional interest, the unpaid installments due within the total grace period earned by him which is hereby fixed at the rate of one month grace period for every one year of installment payments made: Provided, That this right shall be exercised by the buyer only once in every five years of the life of the contract and its extensions, if any.; (b) If the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty per cent of the total payments made, and, after five years of installments, an additional five per cent every year but not to exceed ninety per cent of the total payments made: Provided, That the actual cancellation of the contract shall take place after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act and upon full payment of the cash surrender value to the buyer.
Accordingly, a buyer shall be entitled to refund in case his contract with the seller of the real estate property is cancelled. However, the said provision of R.A. No. 6552 shall be applicable only in case the buyer has made defaults in his succeeding payments. In your situation, the said law cannot be applicable in the cancellation of the developer of the contract involving the sale of a house and lot in a subdivision located in the Bicol region since the same was cancelled not because you defaulted in the payment of your installments. Indeed, the reason for the said cancellation, according to you, was the recall of the subdivision project. Thus, the failure on the part of the developer entitles you, among others, to rescind the contract with payment of damages (Article 1191, Civil Code). You may first send a demand letter to the developer to inform them of your demand. Thereafter, you may file a case in court when the developer refused to give in with your demand. You may also inquire with the Housing and Land Use Regulatory Board (HLURB) for administrative liability of the said developer in its failure to comply with its obligation.
We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
source: Manila Times' Column of Atty Persida Acosta
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