4 October 2021

JAMES BENEDICT C. FLORIDO, ESQ.

Counsel for Thomas Strake and Alona Castro Strake
Suite 802, 8th Floor
Ayala Life-FGU Center
Cebu Business Park
Cebu City

Re: “Notice of Cancellation of the Contract to

Sell of Unit No. 14-115 in Urban DECA
Homes Tipolo Mandaue Condominium in
favor of Thomas Strake and Alona Castro
Strake”

Dear Atty. Florido:

We respond to your letter dated 27 September 2021 on behalf of your clients, THOMAS
STRAKE and ALONA CASTRO STRAKE (the “Strakes”), as regards the 21 September 2021
Notice of Cancellation of the Contract to Sell of Building 14 Unit 115 in Urban DECA Homes
Tipolo Mandaue Condominium (the “Subject Unit”).

As you may recall, on 20 August 2021, you informed the Company that the Strakes had
difficulty in meeting their July and August 2021 monthly amortizations for the Subject Unit, as
well as Building 9 Unit 105 (“B19-105”) of the same Condominium, which is also under their
account {collectively the “Strakes’ Units”}, due to the Community Quarantines imposed since
last year. As such, you proposed that the Strakes be allowed to pay only the monthly
amortization of the Strakes’ Units for September 2021 in full and to pay the monthly
amortizations of the same for the months of July and August 2021 in the total amount of
P56,256.00 in three (3) equal monthly installments starting on October to December 2021. Your
proposal for payment is as follows:

September 2021 : P28,128.00

October 2021 : P28,128.00 + P18,752.00 (1/3 of July & August 2021
amortization)
November 2021 : P28,128.00 + P18,752.00 (1/3 of July & August 2021
amortization)
December 2021 : P28,128.00 + P18,752.00 (1/3 of July & August 2021
amortization)
 You further requested that the 40% penalty provided under Section 1.2 of their Contracts
to Sell be novated and/or waived by the Company taking into consideration the attendant
circumstances.

The Company’s Credit and Collections Department endeavored to call your good office
and clients to inform that the option of the Strakes is to restructure their accounts. However,
their attempt to reach you remained futile. Thereafter, on 31 August 2021, without restructuring
their accounts, the Strakes instead paid through BDO online the total amount of P28,128.00
supposedly equivalent to the July monthly amortization of the Strakes’ Units (P13,015.29 for the
Subject Unit and P15,111.82 for B19-105).

While they paid the equivalent of their July monthly amortization for the Subject Unit,
they omitted paying the 40% penalty specifically provided under Section 1.2 of the Contracts to
Sell in the amount of P5,206.12, which reads:

Section 1.2 In case the VENDEE fails to pay the full monthly
amortization and/or other loan obligations when due, a penalty of forty
percent (40%) of the amount due shall be imposed every month which
shall immediately be effective after the lapse of the due date until full
settlement thereof.

Considering that the Strakes failed to pay the penalty of their July monthly amortization
for the Subject Unit, their account shows that they have three (3) months of default in payment
for the period 1 July 2021 to 1 September 2021. Specifically, the default in the total monthly
installment due to the Strakes are summarized as follows:

UNPAID MOS. MO. AMORT. PENALTY TOTAL DUE

7/1/2021 13,015.29 5,206.12 18,221.41
8/1/2021 13,015.29 5,206.12 18,221.41
9/1/2021 13,015.29 5,206.12 18,221.41
39,045.87 15,618.35 54,664.22

less (bdo dep on

31 August 2021) 13,015.29
Balance 41,648.93

In essence, while the monthly amortization for July 2021 was deposited online in the
Company’s BDO account on 31 August 2021, there is still a 40% penalty for July monthly
amortization which means that the total monthly installment due for July 2021 remains unpaid in
full to this date. As a result thereof, it kept their account tagged as in arrears for three (3)
consecutive months. In Spouses Mahusay v. B.E San Diego, Inc1, the Supreme Court upheld
the finding of the Court of Appeals that the inclusion of the payment of all penalties and interest
due on the unpaid amortizations is customary in the real estate business and in accordance with
the provisions of the Contract to Sell between the parties.

This is contrary to your contention that there is no violation of the three (3) consecutive
installment rule under Section 1.2 of the Contract to Sell due to the alleged acceptance of
payment by the Company of the July monthly amortization of the Subject Unit on 29 August
20212.

Furthermore, your contention that the Strakes “have paid at least two (2) years of
installment which entitle them to the sixty-day grace period under the Contract to Sell and R.A.
No. 6552 PLUS another two (2) months as afforded as Grace Period under the Contract to Sell,
during which they may pay the unpaid installments even after the default you had mistakenly
imputed upon them” is erroneous. The Contract to Sell provides:

Section 2.1 If for any reason whatsoever, the VENDEE fails to pay
any three (3) consecutive monthly installments, which is inclusive of
the sixty (60) calendar days-grace period provided for in Section 4
of RA 6552, the vendee shall be considered in default (Emphasis
supplied).

Thus, the sixty (60) calendar days-grace period under RA 6552 you relied upon is already
included in the 3 consecutive monthly installment default under the Contract to Sell signed by
the Strakes.

Notwithstanding the foregoing, the Company agrees to revoke the Notice of Cancellation
dated 21 September 2021, provided that the Strakes pay the unpaid monthly amortizations and
corresponding penalties from 1 July to 1 September 2021, in the total amount of Forty One
Thousand Six Hundred Forty Eight Pesos and 93/100 (41,648.93), within thirty (30) days
from receipt of this letter.

We trust that the foregoing has adequately addressed your concerns. Should you have
clarifications, please do not hesitate to let us know.

Thank you and best regards,

DARIAN KAYE S. AQUINO

Legal Officer
1
G.R. No. 179675, 8 June 2011.
2
Reflected on 31 August 2021 in the Company’s System.
Noted by:

HAZEL L. HELMUTH
General Manager – Legal Department