Question: I bought a condominium unit in the Philippines. The reservation fee was Php20,000 and the deposit was 20% of the total amount of the unit. I already paid the reservation fee and have been paying the deposit monthly for seven months now. However, there had been changes in my work situation, which made me realize that it is no longer practical for me to continue paying for the unit. All in all, I have already shelled out almost Php200,000. Can I still get my money back?
Answer: There are actually two laws you can defer on when it comes to this. One is the contract or agreement you had with the seller of the condo (this is the usual case). In case the contract terms are deemed not lawful or not moral (in short, not conforming to public policies in place), then the law will take over.
With regards to the latter, there is actually what is called as the Maceda Law (RA # 6552), which defines the rights of buyers and sellers in these types of transaction.
According to the said law, real estate buyers (i.e. apartment, condominium) who have paid for the property for at least two years and can no longer continue paying have two options:
(1) Ask for a grace period from the seller, a break from payment without getting interest. The allowed grace period is one month for every year paid. The limit is that this can only be availed once every 5 years.
(2) In case the seller decides to cancel the contract because of non-payment, he should return the money to the buyer, with deductions. The returned amount should be 50% of the payment in case the buyer has been paying for less than five years. If buyer has been paying for five years or longer, the amount to be returned is 50% of total amount plus 5% per year in excess of five years (max amount that can be returned is 90% of total amount paid by buyer). CONDITION: the actual cancellation should happen within 30 days after the buyer received notice of cancellation).
NOTE: This will not apply to you since you’ve been paying for less than 2 years. There’s a different provision for cases like yours.
According to the Maceda Law, in case the buyer doesn’t pay the due amount after paying for a few months (less than 2 years), the seller should offer a 60 days grace period starting the due date of the unpaid installment. In case the grace period is over and the buyer still cannot pay, the seller can cancel the contract within 30 days after he sends a notice of cancellation to the buyer.
NOTE: This is closer to your situation, except that the seller is not yet cancelling the contract in your case. Unless he cancels the contract, what you can do at the moment is:
(1) Check your contract to see if there’s any provision stated about what happens when you stop paying after a certain number of months.
(2) Find a buyer for your condo rights. In case a refund is not possible, you have the option to find a buyer and get your money back – this is a legal move that you can take.
You may also want to check whether the contract abides by the Maceda Law or if there is anything there that looks unlawful. In case you suspect anything, you can contact the Housing and Land Use Regulatory Board for assistance.
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