Maceda law

r.a. 6552
Realty Installment Buyer Act
 Objectives
At the end of the lecture, the student should be able to:
1. Understand the provisions of the Maceda Law.
2. Identify the rights of the buyer in case of default in installment payments of real
property.
3. Discuss the transactions covered by the Maceda Law

2
Purpose of ra 6552
To protect buyers of real estate on
installment payments against onerous
and oppressive conditions.

3
Transactions covered
Sale of financing of real estate on installment payments,
including residential condominium apartments, but
excluding industrial lots, commercial buildings, and sales
to tenants under RA 3844 as amended by RA 6389 (Land
Reform Law), where the buyer has paid at least two
years of installment.

4
Rights of the buyer
Grace period to pay installment in case of default
● If at least 2 years of installment have been paid at the time of
default
○ Grace period = one month for every year of installments paid

○ No interest for payments to be made within the grace period.

○ The right shall be exercised only once every five years of the life of the
contract and its extensions if any.

5
Rights of the buyer
● If at least 2 years of installment have been paid at the time of
default
○ If the contract is cancelled, he shall be entitled to the refund of the cash
surrender value of the payments on the property

○ CSV = 50% of total payments + 5% of the total pmts for every year of
installment (after 5 years)

○ CSV should not exceed 90% 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.
6
Rights of the buyer
Cancellation shall take place after 30 days from
receipt by the buyer of the notice of
cancellation or demand for rescission or of the
contract by notarial act AND upon full payment
of the CSV to the buyer.

7
Rights of the buyer
● If less than 2 years of installment have been paid at
the time of default
○ Grace period = not less than 60 days from the date the installment
became due to pay

○ Cancellation shall take place after 30 days from the receipt by the
buyer of the notice of cancellation or the demand for rescission
of the contract by notarial act.

8
Additional rights
● The buyer shall have the right
during the grace period before
the cancellation of the contract
○ To sell his rights to another by
notarial act
○ To assign his rights to another, by
notarial act
○ To reinstate the contract by
updating the account
● Right to possession
● Right to control
●
●
Right to use and quiet enjoyment
Right to allow others a right to use
(licenses and leases)
● Right to privacy and to exclude
others
● Right to disposition or to transfer
the property to someone else by
selling, gifting or inheritance
● Right to use property as collateral
through a mortgage
9
Additional rights
● To pay in advance any installment or the full unpaid
balance any time without interest.

● To ask for the annotation of the full payment of the

purchase price in the certificate of title covering the
property.

10
illustration
B bought from S realty, Inc. a residential house and lot for P600,000.
The terms of the contract provided for the following:
Down payment of P60,000; the balance payable in 15 years in
installments of P3,000 per month. After paying the down payment
and 84 monthly installments, B defaulted in the payment of the 85th
and succeeding installments. As a consequence, S Realty, Inc.
cancelled the sale. How much cash surrender value is B entitled to
receive?

11
answer
B shall be entitled to receive a CSV of P187,200.

84 installments ÷ 12 = 7 years
Entitlement of 50% + 5% (year 6) + 5% (Year 7) = 60% of total
payments made

Total payments made = P60,000 + (84*3,000) = P312,000

CSV = 60% * P312,000 = P187,200.

12
Installment sale of subdivision
lots ad condominiums
p.d. 957

the subdivision and

condominium buyers’ 13
Transactions covered
1. Every disposition, or attempt to dispose, for a valuable
consideration, of a subdivision lot, including the building and
other improvements thereon, if any, in a subdivision project or
a condominium unit or a condominium project.
2. Contract to sell, contract of purchase and sale, exchange,
attempt to sell, option of sale or purchase, a solicitation of a
sale or an offer to sell, directly or thru an agent, or by circular,
letter, advertisement or otherwise.

14
Subdivision lot and condominium
unit concept
1. Subdivision lot – any lot (residential, commercial, industrial,
recreational) in a subdivision project
2. Condominium unit – a part of the condominium project intended
for any type of ownership, including one or more rooms or
spaces located in one or more floors on a building and such
accessories as may be appended thereto.

15
Rights of buyer in case of default
Failure to pay installments. - The rights of the buyer in the
event of this failure to pay the installments due for reasons other than the failure of
the owner or developer to develop the project shall be governed by Republic Act
No. 6552.

Where the transaction or contract was entered into prior to the effectivity
of Republic Act No. 6552 on August 26, 1972, the defaulting buyer shall be
entitled to the corresponding refund based on the installments paid after the
effectivity of the law in the absence of any provision in the contract to the
contrary.

16
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.

17
Does the Maceda Law apply when the
buyer pays through a housing loan from a
bank? House financing from Pag-IBIG?

18
19