• Property buyers can stop amortizations for cause

    Persida Acosta

    Persida Acosta

    Dear PAO,
    I bought a subdivision lot from a subdivision developer seven years ago. The subdivision has just opened then and has commenced offering their lots to buyers. I have already paid 20% down payment and the remaining balance will be paid within five years. I was required to pay monthly amortizations equivalent to the amount of the remaining balance. According to the contract, I am allowed to build a house after completing the down payment.

    However, two years after constantly paying the amortization, I was about to build a house on the lot when I discovered that the developer failed to fully develop the subdivision. Until now the drainage system is incomplete that causes floods to lower areas of the subdivision, my lot included, every time torrential rain hits the place. The water system is also not yet in place. As advertised, there shall be a concrete fence surrounding the subdivision, but until now only some portions of the subdivision are fenced. I plan to stop the payment of my monthly amortization until such time that the developer complies with its obligation. Can I do this?

    Dear Ralph,
    Presidential Decree (P.D.) No. 957 or the Subdivision and Condominium Buyers’ Protective Decree mandates subdivision developers or owners to provide the necessary facilities, improvements and other forms of development in accordance with the subdivision plan or advertisements, otherwise, buyers shall have justifiable reason to suspend payment or demand for the refund of the sum of money already paid. This is according to Section 23 of the said law, to wit:

    “Section 23. Non-Forfeiture of Payments. No installment payment made by a buyer in a subdivision or condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the owner or developer to develop the subdivision or condominium project according to the approved plans and within the time limit for complying with the same. Such buyer may, at his option, be reimbursed the total amount paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate.”

    The developer has to comply with the above provision within one year from the date of the issuance of the license for the subdivision project or such period of time as may be fixed by the government through the Housing and Land Use Regulatory Board which assumed the regulatory and adjudicatory functions of the National Housing Authority (Section 20, Presidential Decree No. 957).

    The foregoing considered, since as mentioned in your letter the subdivision developer failed to accomplish the facilities and improvements they are required to construct or provide, as part of the subdivision plan and as advertised by the developer, after the lapse of the one year period, assuming that no period was fixed by the Housing and Land Use Regulatory Board within which to complete the said improvements and the one year period was not extended by the said agency, you may suspend payment of your monthly installment, provided that the developer is duly informed about this.

    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 guide you with our opinion on the matter.

    Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net


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    1 Comment

    1. Dear PAO,

      My wife’s cousins are willing to sell to us a parcel of unregistered land belonging to their deceased mother who possessed only a tax declaration named to her and an absolute deed of sale between her and the previous owner. All heirs (10 siblings) agreed to sell that land to us. One heir is living abroad.
      I would like like to know, what is the process, actions to be taken and documents to prepare in order for me to acquire that land and also to registered/ titled that land to us?

      Thank you and best regards,