Q. Dear Atty. Wong, I bought a one bed room condominium in Paranaque City, Philippines in May 2010 covered by Reservation Agreement.
I am paying it on installment since May 2010 and on October 2011, I signed the Contract to Sell.
In June 2013 this property was ready for turnover and should be transferred to my name once I approved for a bank loan, which happened sometime in January 2014.
For so many reasons I don’t want to continue buying the property anymore and instead I want to get back the money I paid to the developer. I believe I have all the documents and evidence to get my money back. How can I do this? Am I entitled to a refund?
Ans: Hello Mr. Atienza. Pursuant to Republic Act 6552 (MACEDA LAW,as amended by Presidential Decree No. 957), a buyer of real estate properties in subdivision and condominium projects on an installment basis are entitled to the following rights:
- The buyer shall have the right to sell his rights or assign the same to another person (SEC. 5, RA 6552).
2. “ Where the buyer has paid at least two years of installments, the buyer, is entitled
to the following rights in case he defaults in the payments of succeeding
Installments:
(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 this right shall be exercised by the buyer only once in every five years of 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 percent of the total payment made: Provided, That the actual cancellation of the contract shall take place after thirty days from receipt by the buyer ( the notice of cancellation or the demand for rescission of the contract by a notaries act and upon full payment of the cash surrender value to the buyer. Down payments, deposits or options on the contract shall be included in the computation of the total number of installment payments made. “
It is suggested that if you have a copy of your contract to sell, just go over it and check if the developer has complied with the terms and conditions of the agreement and be considered as the defaulting party, so as to entitle you such reliefs as provided for by law.
From the above-cited provisions of the law, it could be discerned that your right of the buyer to receive the appropriate refund of the cash surrender value of 50% in your case is premised on the fact that the buyer has defaulted in the payment of the installments due and as a consequence thereto the Contract to Sell is cancelled by the Seller, which is not clear in your case.
On the other hand, where the Developer of the condominium project, fails to develop the condominium project according to the approved plans and specifications, within the time limit for complying with the same, the buyer has the option to be reimbursed the total amount paid including amortization interests but excluding delinquency interests. (Sec.23.PD 957).
Pending the cancellation of your contract by the seller due to the default of the buyer, the best way for you to get rid of the condominium property is to look for an interested buyer where you can transfer your rights of this condo.
Thus, the more practical approach for you to take in order to be assured of getting back (in whole or in part or even with a profit) the money you have already paid to the developer is to sell your rights of the condo unit to third parties. As mentioned earlier, it is your right to sell and transfer whatever title or rights you have as condominium buyer.
Any agreement/contract that restricts you from selling your rights in the Contract to Sell or in such other documents is null and void. Furthermore, by availing this remedy, you will avoid the hassles of going to litigation and the corresponding expenses and legal costs incident to your cause of action with the Housing Land Use and Regulatory Board (HLURB).
As you are out of the Philippines, you can do the above transactions, by appointing your agent-representative or lawyer, as your attorney in fact to act for and in your behalf in your physical absence in the country. This can be done by executing a Special Power of Attorney (SPA), signed by you and have it notarized before our Philippine Consulate in Toronto and thereafter, send the SPA to your agent-representative in the Philippines for its implementation.
As regards to your other queries, I’m sorry I don’t maintain my law practice in Toronto nor our law firm has an affiliate in that jurisdiction. My law practice in Metro Manila.
Looking forward you’ll find the above in order. Thank you for being a part of the global “Batas Piney Community”.
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