Dear Attorney,
I am inquiring about a situation where I have been paying for a pre-selling property for almost three years. I was told that the turnover would occur after two years, but now, only minimal improvements have been made. I’ve already paid over 20% of the total contract price. Unfortunately, the company is now pressuring me to apply for financing, which I no longer wish to proceed with. Given the delays and my decision not to push through, I am wondering if I am entitled to a refund. Is it possible to receive 90% of what I have paid?
Sincerely,
Frustrated Investor
Insights
In the context of pre-selling property in the Philippines, the legal rights of a buyer primarily fall under the Maceda Law, also known as Republic Act No. 6552, which outlines the rights of real estate buyers who purchase properties on installment payments.
The Maceda Law provides specific protections for buyers who have paid at least two years’ worth of installments. If the buyer has made payments for two or more years and decides to cancel the contract, they are entitled to a refund. The law mandates that at least 50% of the total payments made be returned to the buyer. Additionally, if the buyer has paid beyond two years, they are entitled to an additional 5% refund per year beyond the second year, up to a maximum of 90% of the total payments made.
This means that if a buyer has paid for nearly three years and decides to cancel, they may be entitled to a refund of 90% of their payments, depending on the terms of the contract and their adherence to other conditions stipulated by law. The seller or developer cannot unilaterally deny a refund or force the buyer into applying for financing without the buyer's consent.
Furthermore, the law requires that the seller give the buyer a grace period of at least 60 days to make any outstanding payments before cancellation can occur. If a cancellation occurs, the buyer can request the refund as stipulated by the law. However, the exact amount of the refund may vary depending on the specific provisions in the contract, so reviewing the contract with a legal professional is advisable.
In situations where there are significant delays in turnover or delivery of the property, such as in the case of pre-selling developments, buyers may also have recourse under consumer protection laws. If the delays are unjustifiable and constitute a breach of contract, the buyer may have additional grounds for a refund or legal action.
Legal counsel can assess whether there are further damages or penalties due to the delays in delivery, and determine if the buyer has the right to cancel the contract and seek a refund under the specific circumstances of the deal.