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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.
AT A GLANCE:
No. Under the Maceda Law, if the buyer has paid at least 2 years of installments, he can pay, without interest, within the grace period of one month for every year of installment payments. The buyer likewise has the right to get a refund, if the contract was canceled, which may be equivalent to 50%-90% of the total payments.
In case less than two years of installments were paid, the seller shall give the buyer a grace period of not less than 60 days. (Sec. 3-4, R.A. No. 6552)
Republic Act No. 6552 or the Realty Installment Buyer Act aims to protect buyers of real estate on installment payments against onerous and oppressive conditions such that in case he had already paid at least 2 years of installments, he is entitled to pay without additional interest or refund the cash surrender value of the payments on the property if the contract is canceled.
The law says –
Section 3. Where the buyer has paid at least 2 years of installments, the buyer is entitled to the following rights in case he defaults in the payment of succeeding installments:
To pay, without additional interest, the unpaid installments due within the total grace period earned by him 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.
Where the contract is canceled
If the contract is canceled, 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 5% every year but not to exceed 90% 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.
Downpayments, deposits or options on the contract shall be included in the computation of the total number of installment payments made.
Section 4 provides that in case where less than two years of installments were paid, the seller shall give the buyer a grace period of not less than 60 days from the date the installment became due. If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the contract 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.
Jurisprudence provides –
Republic Act No. 6552, the Realty Installment Buyer Act or more popularly referred to as the Maceda Law, named after its author, the late Sen. Ernesto Maceda, was adopted with the purpose of “protect[ing] buyers of real estate on installment payments against onerous and oppressive conditions.” It “delineat[es] the rights and remedies of . . . buyers and protect[s] them from one-sided and pernicious contract stipulations”:
Its declared public policy is to protect buyers of real estate on installment basis against onerous and oppressive conditions. The law seeks to address the acute housing shortage problem in our country that has prompted thousands of middle and lower class buyers of houses, lots and condominium units to enter into all sorts of contracts with private housing developers involving installment schemes. Lot buyers, mostly low income earners eager to acquire a lot upon which to build their homes, readily affix their signatures on these contracts, without an opportunity to question the onerous provisions therein as the contract is offered to them on a “take it or leave it” basis.
Most of these contracts of adhesion, drawn exclusively by the developers, entrap innocent buyers by requiring cash deposits for reservation agreements which often times include, in fine print, onerous default clauses where all the installment payments made will be forfeited upon failure to pay any installment due even if the buyers had made payments for several years. Real estate developers thus enjoy an unnecessary advantage over lot buyers who[m] they often exploit with iniquitous results. They get to forfeit all the installment payments of defaulting buyers and resell the same lot to another buyer with the same exigent conditions. To help especially the low income lot buyers, the legislature enacted R.A. No. 6552 delineating the rights and remedies of lot buyers and protect[ing] them from one-sided and pernicious contract stipulations.
Source: Priscilla Zafra Orbe vs. Filinvest Land, Inc., G.R. No. 208185, September 06, 2017
Read also: What are the different modes of acquiring title to property?
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