Professional Documents
Culture Documents
Maceda Law
Maceda Law
The
Maceda
Law,
also
known
as
The
Realty
Installment
Buyer
Act
or
Republic
Act
6552
is
the
law
that
lays
out
a
defaulting
buyer’s
rights
in
the
Philippines
with
regards
to
his
purchase
of
a
real
estate
property,
whether
it’s
a
condominium
unit
or
a
house-‐and-‐lot
unit
in
a
subdivision
development.
This
was
initiated
by
lawmaker
Ernesto
Maceda
and
has
taken
into
effect
on
August
26,
1972.
Today,
more
and
more
people
in
the
working
class,
especially
OFW’s
are
buying
condominiums
or
house-‐and-‐lots
in
subdivision
projects.
But
paying
them
in
full
in
just
one
payment
is
just
too
much.
So
practically,
they
opt
to
pay
the
equity
by
installment
since
developers
or
contractors
installment
equity
payment
schemes
have
become
increasingly
affordable.
This
is
through
stretching
their
equity
payment
or
down
payment
stage
to
20,
30,
40
months
or
sometimes
longer.
If
you
have
taken
advantage
of
this
convenience
in
acquiring
your
property,
everything
is
okay
as
long
as
you
can
keep
up
with
your
payments.
But
times
are
not
always
good.
There
are
times
when
we
face
difficult
situations
and
times
when
we
just
can’t
make
the
payments
anymore.
If
you
come
into
this
situation,
the
Maceda
Law
was
passed
to
help
protect
you.
It
established
the
rights
of
a
qualified
buyer
who
can’t
continue
with
his
payments
anymore.
Under
the
Maceda
Law,
there
are
two
qualification
categories
of
buyers
accorded
protection.
These
buyers
are:
1.
Under
Section
3
of
Maceda
Law,
a
buyer
with
at
least
2
years
of
installments
2.
Under
Section
4
of
Maceda
Law,
a
buyer
with
less
than
2
years
of
installments
Section 3
“…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
payment
of
succeeding
installments:
a.)
To
pay,
without
additional
interest,
the
unpaid
installment
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
shall
be
exercised
by
the
buyer
only
once
in
every
five
years
of
the
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
percent
of
the
total
payments
made…
Down
payments,
deposits
or
options
on
the
contract
shall
be
included
in
the
computation
of
the
total
number
of
installment
payments
made”
Section
4
“In
case
where
less
than
two
years
of
installments
were
paid,
the
seller
shall
give
the
buyer
a
grace
period
of
not
less
than
sixty
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
30
days
from
the
receipt
by
the
buyer
the
notice
of
cancellation
of
the
demand
for
rescission
of
the
contract
by
a
notarial
act.”
In
other
words,
Section
3
of
Maceda
Law
indicates
that
the
buyer
has
a
right
to
a
refund
and
grace
periods
as
long
as
the
buyer
has
paid
at
least
two
years.
However,
if
there’s
still
less
than
2
years
of
installment
payments
made,
the
buyer
is
only
entitled
to
60
days
grace
period
as
indicated
in
Section
4.
More
importantly,
there
is
a
section
in
the
Maceda
Law
that
protects
the
buyers
from
the
fine
prints
of
contracts
imposed
by
the
contractors
or
developers.
These
fines
prints
are
oftentimes
neglected
by
the
buyers
to
review
during
the
contract
signing.
Section
7
of
the
Maceda
Law
states
that
“Any
stipulation
in
any
contract
hereafter
entered
into
contrary
to
the
provisions
of
Sections
3,4,5,
and
6
shall
be
null
and
void.”
This
section
emphasizes
the
overriding
power
of
the
Maceda
Law
against
the
contract
made
by
the
developer
and
the
buyer..
The
Maceda
Law,
Ra
6552
Do
you
want
to
know
your
rights
as
a
real
estate
investor,
or
simply
as
a
real
estate
buyer
who
is
making
installment
payments?
The
first
logical
step
would
be
to
know
what
law
applies
and
what
that
particular
law
contains,
which
in
this
case
would
be
the
full
text
of
Republic
Act
No.
6552.
More
popularly
known
as
the
Maceda
Law,
the
RA
6552
follows.
The
Maceda
Law,
RA
6552,
is
the
real
estate
equivalent
of
the
Recto
Law.
Like
the
Recto
Law,
it
also
covers
financing
of
sales
of
real
property
(which
is
why
mortgages
also
come
in.)
It
doesn't
apply,however,
to
the
following
sales:
1.)
Industrial
lots
2.)
Commercial
buildings
and
lots
3.)
Lands
under
the
CARP
Law
MACEDA
LAW
(RA6552)
Maceda
Law
in
the
Philippines
applies
to
the
purchaser
of
real
property
by
installment
payments
when
the
purchase
becomes
cancelled
by
a
delinquency
in
payment.
It
provides
the
buyer
with
a
right
to
a
refund
as
a
requisite
for
cancellation
of
contract
due
to
delinquency
when
the
buyer
has
paid
at
least
two
years.
The
refund
is
50%
of
total
payments;
additional
5%
per
year
after
5th
year.
To
qualify
for
the
Maceda
Law,
the
buyer
must
have
already
paid
at
least
2
years
of
installment
payments.
1. The
buyer
has
the
right
to
continue
the
unpaid
installments
due
without
additional
interest
provided
that
the
buyer
must
pay
within
the
grace
period.
The
grace
period
provided
is
one
month
for
every
one
year
of
installments
paid.
2. The
buyer
has
the
right
to
opt
for
a
refund
of
the
installment
payments
being
made
(This
includes
the
down
payments,
deposits
or
options
on
the
contract).
The
buyer
is
entitled
to
50%
refund
from
his
total
payments
made.
An
additional
of
5%
refund
per
year
for
every
5
years.
If
the
buyer
has
paid
less
than
two
years
installment:
The
buyer
has
the
right
to
continue
his
payments
within
a
grace
period
of
60
days.
So
what
happens
if
you’ve
been
paying
for
real
estate
property
in
installments,
and
you
default
because
you
don’t
have
any
money
to
pay
anymore?
Once
again,
the
law
provides
for
a
remedy,
in
particular,
Republic
Act
No.
6552
or
the
Realty
Installment
Buyer
Act.
You
can
read
the
full
law
here
–
http://www.lawphil.net/statutes/repacts/ra1972/ra_6552_1972.html
You
can
also
go
to
HLURB
to
ask
for
assistance
in
your
problems
such
as
computation
of
refunds
and
failure
of
the
developer
to
deliver
what
he
has
promised
.
HLURB’s
address
and
contact
number
is
on
the
previous
post
on
PD
1344
(just
check
that
out!).
So
we
have
different
scenarios:
The
first
scenario
–
you
have
paid
less
than
two
years
of
installments:
In
this
case,
the
seller
should
give
the
buyer
a
grace
period
of
at
least
60
days
to
pay
the
amount
due
–
via
written
notice.
If
the
buyer
still
fails
to
pay
after
the
expiration
of
the
grace
period,
the
seller
can
cancel
the
contract
through
a
notarial
demand
for
cancellation.
Actual
cancellation
of
the
contract
takes
place
after
30
days
from
buyer’s
receipt
of
notice.
The
buyer
can:
(a)
assign
the
contract
to
a
third
person
via
notarial
act
before
it
is
cancelled;
or
(b)
update
the
account
by
paying
the
due
installments
during
the
grace
period.
There
is
no
refund.
The
second
scenario
–
you
have
paid
at
least
two
years
of
installments:
In
this
case,
the
buyer
is
entitled
to
a
grace
period
of
one
month
for
every
year
of
installment
made.
He
has
the
right
to
pay,
without
additional
interest,
the
unpaid
installments
due
within
the
total
grace
period.
This
right
can
only
be
exercised
once
every
five
years
of
the
contract.
If
the
buyer
still
fails
to
pay
the
unpaid
installments
due
during
the
grace
period,
the
seller
may
cancel
the
contract
in
the
same
way
as
the
first
scenario,
via
notarial
demand
for
cancellation.
Actual
cancellation
takes
place
after
30
days
from:
(a)
receipt
of
notice
or
demand;
and
(b)
full
payment
of
refund.
REFUND
If
the
buyer
paid
two
to
five
years
of
installments,
he
is
entitled
to
a
refund
of
the
cash
surrender
value
of
the
payments
on
the
property
(including
down
payments,
deposits
or
options)
equivalent
to
fifty
per
cent
(50%)
of
the
total
payments
made.
For
every
year
of
installments
made
in
excess
of
five
years,
the
buyer
is
entitled
to
an
additional
five
per
cent
(5%),
but
not
to
exceed
ninety
percent
(90%)
of
the
total
payments
made.
So
if
the
buyer
paid
6
years
of
installments,
he
is
entitled
to
55%
refund
of
the
total
payments
made.
If
he
made
7
years
of
installments,
he
is
entitled
to
60%
refund,
and
so
on.
However,
his
refund
cannot
exceed
90%
of
the
total
amount
paid.
For
an
accurate
computation
of
your
refund,
please
ask
the
HLURB’s
help.
Don’t
forget
that
you
can
research
all
this
information
from
the
internet.
EXCEPTION
By
the
way,
the
Maceda
law
does
not
cover
industrial
lots,
commercial
buildings
,
and
sales
to
tenants
under
RAs
3844
&
6389
(Code
of
Agrarian
Reforms
of
the
Philippines).