REVOCATION OF LICENSE TO SELL

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Published — February 13, 2021 

The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.

Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

Aside from revocation of license to sell, read also: ON LICENSE TO SELL SUBDIVISION LOT OR CONDOMINIUM UNIT

• A license to sell subdivision lots and condominium units may be revoked by the National Housing Authority (NHA)

• Before the license to sell may be revoked, a hearing on the matter must first be conducted

• Pending of the hearing for the revocation of the license to sell, the NHA may suspend the license to sell

May a license to sell be revoked?

In our previous article, we mentioned that a license to sell subdivision lot or condominium unit is required to ensure that the buying public will be dealing with accredited or recognized subdivision or condominium developers.

Once the license to sell has been issued, is the effectivity of the said license perpetual?

The law says:

No. The license to sell may be revoked.

The National Housing Authority (NHA) may, on its own or upon verified complaint filed by a buyer of a subdivision lot or condominium unit, revoke the registration of any subdivision project or condominium project and the license to sell any subdivision lot or condominium unit in said project by issuing an order.  The National Housing Authority may revoke the registration certificate and the license to sell if it appears that there is a satisfactory evidence that the said owner or dealer:

1. is insolvent; or
2. has violated any provisions of the Presidential Decree No. 957 or any applicable rule or regulation of the NHA; or any undertaking of his/its performance bond; or
3. has been or is engaged or is about to engage in fraudulent transactions; or
4. has made any misrepresentation in any prospectus, brochure, circular or other literature about the subdivision project or condominium project that has been distributed to prospective buyers; or
5. is of bad business repute; or
6. does not conduct his business in accordance with law or sound business principles.

However, before a revocation of the license to sell may be had, a hearing on the matter must first be conducted. Now, during the pendency for the hearing of the revocation of the license to sell, take note the license to sell may still be suspended.

Who may suspend the license to sell?

The law says:

The NHA may, in its discretion, immediately suspend the owner’s or dealer’s license to sell pending the investigation for the revocation of the license to sell. Also, the NHA may suspend the license to sell if, in its opinion, any information in the registration statement filed by the owner or dealer is or has become misleading, incorrect, inadequate or incomplete or the sale or offering for a sale of the subdivision or condominium project may work or tend to work a fraud upon prospective buyers.

The suspension order may be lifted if, after notice and hearing, the NHA is convinced that the registration statement is accurate or that any of its deficiency has been corrected or supplemented or that the sale to the public of the subdivision or condominium project will neither be fraudulent or will not result in fraud. It shall also be lifted upon dismissal of the complaint for lack of legal basis.

Until the final entry of an order of suspension, the suspension of the right to sell the project, though binding upon all persons notified, shall be deemed confidential unless it shall appear that the order of suspension has in the meantime, been violated.

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

All rights reserved.

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