Maceda Law Protection for installment buyers

Maceda Law

Rights of buyer who has paid two years or more of installments:

1.  To pay, without additional interest, any installment due within the grace period which is equivalent to one month for every year of installment payment, provided that such right can only be availed of once every five years.

2.To receive a thirty-day notarial notice of cancellation before his contract can be cancelled for delinquency

Rights of buyer who has paid less than 2 years of installment

1. The grace period to pay without additional interest due is fixed as 60 days

2. For cancellation of contract due to delinquency, the buyer is only entitled to receive a 30-day notarial notice of cancellation without right to receive the cash surrender value pf his payments

Right to refund under P.D. 957  & Maceda Law 

Presidential Decree 957:  Right to refund applies when the developer fails to complete the development within the required period. Refund is 100% of total payments

Maceda Law:  Right to refund applies as a requisite for cancellation of contract due to delinquency when the buyer has paid at least 2 years. Refund is 50% of total payments; additional 5% per year after the 5th year.

MACEDA LAW (R.A. 6552) When the buyer is delinquent in his payment
Objective: To protect installment buyers of real estate against onerous and oppressive conditions.
Applicability – Applies to sale or financing of residential estate on installment payment covered by contract to sell and not sale with mortgage, but excluding industrial lots, commercial building, and sales to tenants under R.A. 3844.
Rights of buyer who has paid two years or more of installments: a) To pay, without additional interest, any installment due within the grace period which is equivalent to one month for every year of installment, provided that such right can only be availed of once every five years. b) To receive a thirty-day notarial notice of cancellation before his contract can be cancelled for delinquency. c) To receive the cash surrender value of his total payments before his contract can be cancelled due to delinquency. The refund is equivalent to fifty percent of total payments and, after the fifth year, an additional five percent per year of installment payment, but not to exceed ninety percent of total payments. d) To transfer or assign his right to the contract e) To register or annotate his contract on the title f) To pay, without additional interest, the full principal balance of the price before the term of the contract.

Rights of buyer who has paid less than two years of installment – The buyer has practically the same rights as a buyer who has paid two years or more of instalmments, except for the following differences:
a) The grace period to pay without additional interest on any installment due is fixed at sixty days
b) For cancellation of contract due to delinquency, the buyer is only entitled to receive a thirty-day notarial notice of cancellation but without right to receive the cash surrender value of his payments.