Query: What should a buyer do if they paid a down payment for a property that was misrepresented as salable but was actually donated to a barangay and not legally for sale?

In the Philippines, the sale of property that has been misrepresented as legally available when it is not, such as land donated to a barangay and therefore not eligible for private sale, constitutes a violation of the buyer’s rights under the Consumer Act of the Philippines and the Civil Code. If a buyer finds themselves in a situation where they have made a payment on a property that cannot legally be sold, there are specific legal steps they can take to recover their money and address the misrepresentation.

Demand for Refund: The first step is to formally demand a refund from the seller. This can be done through a written notice stating the facts of the misrepresentation and requesting the return of the down payment. It's advisable to send this notice via registered mail or any method that provides proof of delivery.
Mediation: If the initial demand for a refund is ignored or refused, the buyer may seek mediation. Local government units often provide mediation services through their legal offices or consumer protection councils. Mediation aims to resolve disputes without going to court and can be a quicker, less expensive option.
Filing a Complaint: Should mediation fail or if the seller remains uncooperative, the buyer can file a formal complaint. This can be done through the Department of Trade and Industry (DTI) if the transaction is considered a consumer transaction, or through regular judicial channels. For property-related disputes, a complaint can also be filed with the Housing and Land Use Regulatory Board (HLURB), especially if the seller is a developer or involved in the real estate business.
Legal Action: As a last resort, taking legal action through the courts may be necessary. The buyer can sue for breach of contract and fraud. In legal terms, this would involve proving that the seller knew the property was not legally available for sale but proceeded with the transaction regardless. Legal proceedings can result in the court ordering the refund of the down payment along with possible damages.
Documentation and Evidence: Throughout the process, the buyer should keep all documentation related to the transaction, such as receipts, written communications with the seller, and any records of the property listing. This documentation will be crucial in proving the case against the seller.

Misrepresentation in property sales is a serious issue, and affected buyers are encouraged to assert their rights. Legal advice can provide guidance tailored to the specifics of the case, ensuring that all legal avenues are properly pursued.