LAND TITLES & DEEDS: RA 6552: REALTY INSTALLMENT BUYER PROTECTION ACT / a.k.a.

MACEDA LAW
PURPOSE: to protect buyers of real estate on installment payments against onerous and oppressive conditions. APPLICABILITY: in all transactions or contracts involving sale or financing of real estate on installment payments INCLUDES: residential condominium EXCLUDES: industrial lots, commercial buildings, and sales to tenants under the Comprehensive Agrarian Reform Law (CARL) NOTE: this Act recognizes the vendors right to cancel the sale upon the buyers default in case of sales on installments under CARL. RIGHTS OF A BUYER IN CASE OF DEFAULT OF PAYMENT OF SUCCEEDING INSTALLMENTS 2 SITUATIONS CONTEMPLATED: 1. Where buyer has paid at least 2 years of installments 2. Where buyer has paid less than 2 years of installments A. WHERE BUYER HAS PAID AT LEAST 2 YEARS OF INSTALLMENTS 1) RIGHT TO PAY WITHIN GRACE PERIOD WITHOUT ADDITIONAL INTEREST - To pay, without additional interest, the unpaid installments due within the total grace period earned by him fixed at the rate of 1 month grace period for every 1 year of installment payments made. this right shall be exercised only once every 5 years of the life of the contract and its extensions, if any 2) RIGHT TO REFUND IF CONTRACT IS CANCELED the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to: a. 50% of the total payments made and, b. after 5 years of installments, an additional 5% every year (but not to exceed 90% of the total payments made. ACTUAL CANCELLATION TAKES PLACE: a. after 30 days from receipt by buyer of the notice of cancellation OR the demand

for rescission of the contract by a notarial act, AND b. upon full payment of the cash surrender value to the buyer 3) RIGHT TO SELL, ASSIGN, REINSTATE RIGHT OR CONTRACT can perform this right by updating the account during the grace period and before actual cancellation of the contract. 4) RIGHT TO PAY ANYTIME AND IN ADVANCE UNPAID INSTALLMENT WITHOUT INTEREST this includes the right to have such full payment annotated in the COT covering the property. NOTE: down payments, deposits or options on the contract shall be included in the computation of the total number of installment payments made. B. WHERE BUYER HAS PAID LESS THAN 2 YEARS OF INSTALLMENTS 1) RIGHT TO PAY (W/O ADDITIONAL INTEREST) UNPAID INSTALLMENTS WITHIN GRACE PERIOD a grace period of 60 days from the date the installment became due if buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the contract after 30 days from receipt by the buyer of the notice of cancellation or demand for rescission of contract by a notarial act. 2) RIGHT TO SELL, ASSIGN, REINSTATE RIGHT OR CONTRACT by updating the account during the grace period and before actual cancellation of the contrac. 3) RIGHT TO PAY ANYTIME AND IN ADVANCE UNPAID INSTALLMENT WITHOUT INTEREST also to have such full payment of the purchase price annotated in the COT covering the property NOTE: any stipulation in any contract contrary to provisions of this law shall be NULL AND VOID.

AYN RUTH NOTES