Buyers’ Rights under the Maceda Law

Republic Act No. 6552 otherwise known as the “Realty Installment Buyer Act”, or more commonly known as the "Maceda Law", is a law protecting buyers of real estate on installment payments against onerous and oppressive conditions.

What are the transactions covered under the law?

All transactions or contracts involving the sale or financing of real estate on installment payments, including residential condominium apartments.[1]

What are the properties excluded under the law?[2]

1. Industrial lots;

2. Commercial buildings; and

3. Sales to tenant under agrarian laws

What are the rights of a buyer who has paid at least 2 years of installments and defaulted in the payment of succeeding installments?

1. To pay, without additional interest, the unpaid installments due within the total grace period earned by him. This grace period has been fixed at the rate of one (1) month grace period for every one (1) year of installment payments made. However, this right can only be exercised by the buyer only once in every five years of the life of the contract and its extensions, if any. [3]

2. If the contract is canceled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty percent of the total payments made. After five years of installments, an additional five percent every year but not to exceed ninety percent of the total payments made. For this to apply, the actual cancellation of the contract must take place after thirty (30) days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act and upon full payment of the cash surrender value to the buyer. [4}

What are the rights of a buyer who has paid for less than 2 years? [5]

1. The seller shall give the buyer a grace period of not less than sixty days from the date the installment became due.

2. If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the contract after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act.

What are the other rights of a buyer under the law?

1. The buyer shall have the right to sell his rights or assign the same to another person or to reinstate the contract by updating the account during the grace period and before the actual cancellation of the contract. The deed of sale or assignment shall be done by a notarial act.[6]

2. The buyer shall have the right to pay in advance any installment or the full unpaid balance of the purchase price any time without interest and to have such full payment of the purchase price annotated in the certificate of title covering the property.[7]

[1] Sec. 3, Par. 1, RA 6552

[2] Id.

[3] Sec. 3 (a), RA 6552

[4] Sec. 3 (b), RA 6552

[5] Sec. 4, RA 6552

[6] Sec. 5, RA 6552

[7] Sec. 6, RA 6552


Recent Posts

See All

©2020 Ariñas Law Office | info@arinaslaw.com | 02-8395-9745

4th Floor, G & A Building, 2303 Chino Roces Ave. Ext., Makati City