The Realty Installment Buyer Protection Laws

The Realty Installment Buyer Protection Act or Republic Act 6552 is also known as the Maceda Law. This law provides protection to installment buyers against onerous and oppressive conditions. In case of non-payment of installment, the contract will not be outrightly cancelled but the buyer will be given a grace period equivalent to one month per year of installment payment made, without additional interest. If the buyer cannot pay within the grace period and the contract is cancelled, the buyer does not lose everything as he is entitled to a refund of 50 percent of the total payments made.

The buyer should not forget his responsibilities, however. He should keep in mind that he is duty-bound to examine the property he is purchasing and that he assumes the conditions which are clear, apparent and readily ascertainable on the page of the title.

Senator Rodolfo B. Biazon authored this bill called Senate Bill No. 185 - REALTY INSTALLMENT BUYER PROTECTION ACT in the 14th Congress filed last 23rd of July 2007 wherein its legislative status is still on pending process. The scope and nature of this senate bill is national and provide additional protection of property buyers which needed amendments in order to adapt to current times and on plug the loopholes of Republic Act 6552 once this bill is passed in support of R.A. 6552. The latter was enacted and authored back in 26th of August 1972 by former Senator Ernesto Maceda.

Senate Bill 185's long title is AN ACT TO PROVIDE ADDITIONAL PROTECTION TO BUYERS OF REAL ESTATE ON INSTALLMENT PAYMENTS BY REQUIRING SUBDIVISION OR REAL ESTATE OWNERS TO HAVE AN INDIVIDUAL TITLE ON EVERY LOT AVAILABLE FIRST BEFORE OFFERING THE SAME FOR SALE, PROHIBITING ANY MORTGAGE, LIEN OR ENCUMBRANCE ON THE SAME, MAKING THE ANOTATION ON THE TITLE OF THE CONTRACT TO SELL OR SALE MANDATORY, MAKING IT COMPULSORY FOR THE EXECUTION OF A DEED OF ABSOLUTE SALE AND THE DELIVERY OF THE TITLE TO THE BUYER UPON COMPLETION OF INSTALLMENT PAYMENTS, AND PROVIDING OTHER PROTECTIVE MEASURES, INCLUDING THE IMPOSITION OF PENALTY FOR VIOLATION THEREOF.

NEWS: BIR issues new rules concerning one-time real estate transaction

I have read on this article published last 26th November 2007 which was written by Ms. Iris Gonzales of the Philippine Star Revenue Memorandum Circular No. 76-2007 issued by Bureau of Internal Revenue last 25th of October 2007.

Fraudulent Tax evaders of real estate transactions days are numbered. The Bureau of Internal Revenue sharpening its teeth in collecting the revenues on the real estate industry which is on the upswing on current times.

BIR has set additional required documents which are mandatory for one-time real estate transaction. The needed documents include photocopy of official receipts issued by the seller, for purpose of determining whether of real property is on cash basis, a deferred payment sale or installment. Also acknowlegement receipt or proof of payment must be presented if the seller is not engage in business.

While the Contract to Sell and official receipts of payments are among the documents required for installment sales in Annex A2 of Revenue Memorandum Order No. 15-2003, the taxpayer presents only the Deed of Absolute Sale which is, oftentimes, executed upon full payment. The purpose of requiring the submission of a photocopy of the official receipts is for the Revenue District Office to have a means of validating if the transaction is on cash basis, deferred payment or installment plan. BIR Chief Lilian Hefti issued this memoranda in order to ensure transparent dealings and that taxes are appropiately paid and remitted to the government.

It seems that real estate transactions before do not have transparency in making deals with the Bureau of Internal Revenue. Awkwardly saying that there are some cases when taxes are filed incorrectly and some unscrupoulous individuals (sellers, buyers, etc.) engage in this type sale issued by the previous owner/seller to the buyer.

Here is the link for more information and better understanding of this subject. Revenue Memorandum Circular No. 76-2007

Field Trip: A visit at the CELADON MANILA

Last 24th of October 2007, Real Estate Brokers from Pampanga all coming from two different real estate organizations in the province namely Real Estate Brokers Association of the Philippines - Pampanga Chapter, Inc. (REBAP-Pampanga Chapter), Philippine Association of Realtors Board - Metro Angeles Realtors Board (PAREB-MAREB) were in invited on a one day field tripping with Ayala Land Inc's mid to high end type of residential living offering from COMMUNITY INNOVATIONS, INC.

Community Innovations, Inc is under the umbrella corporation of Ayala Land Inc. The largest and most experienced real estate developer in the Philippines is dedicated to providing you with your "ideal home". Community Innovations, targets the young urban professionals who thrive in vibrant communities that appeal to their active lifestyles.

Celadon Manila is an Ayala Land, Ayala Malls and Community Innovations Integrated Development. In the City of Manila lies the 11 hectare prime property which was the former site of the Manila Jockey Club and San Lazaro Hippodrome where Celadon Manila now sits. These developments comprised of Celadon Residences (Townhouses) , Celadon Park San Lazaro (high rise condominiums) and the soon to rise Business Processing Outsource (BPO) building for Ayala Land group of companies in uptown Manila and a Ayala Mall in Manila.

Scale models of the Celadon Park San Lazaro and the Ayala BPO building in Celadon Manila

Townhouse Living at its best, complete with amenities for unit owners exclusive use at Celadon Residences

CELADON MANILA's unique location is highly accessible to University Belt, SM San Lazaro Mall, LRT Line 1 and other conveniences you can enjoy relax and unwind in a community with a refreshing and vibrant lifestyle. It is the only and last of its kind to built in the densely populated uptown Manila.

Inside Celadon Model Unit with me seating at the living area couch at left and my mom posing beside the Celadon Park Sales Office.

For more details and inquiries on CELADON MANILA, you can call us at (+63917) 510-0734 (CRB Benedict F. Baluyut, REBL No. 8358) ; (+63928) 504-6781  - CRB Corazon F. Baluyut, REBL No. 1684 (PRC Licensed Real Estate Brokers). You can visit our website at https://www,cfbaluyutrealty.com.

Buying a House or a Condo 101

It is every man's dream of finding a place to live, a shelter to provide for his growing family or a place of serenity and comfort in the confines of his very own space and even want to sustain the lifestyle that he wants. It has become diverse from its needs and wants not just the typical aspect of living in a house as home but somehow it has become a need of the few to live in high-rise condominiums or in beach house facing the sun and the sea with the cool breeze where you can taste the salt in the air.

Buying is very difficult and requires tedious and meticulous task, investigation and lot of legwork just to find the right the place for you and your family. Here are just a few steps to considered in finding the right home for you.

THINGS TO DO BEFORE AND AFTER BUYING:

1.) LOCATION - This is the most top priority of first-time home buyers. Your future home must be the convenient for you and your family. It may be a stone throw or few minutes away from supermarket, churches, schools and other important place that you do on your daily grind. Accessibility from point A to B must be at ease in doing so. Taken to consideration the jeepney rides to and from or vice versa or your gas mileage you can save for your car on your way to work. It is also important to ask around or survey if the neighborhood is peaceful, any flooding there during rainy season so that it won't be a hassle for you.

2.) BUDGET - finding the best deal for money is not easy. Just ask this question, Can I afford to buy this house or this property? You must learn first your income capabilities and other assets you can use as mortgage especially with banks. You must try pick the right house at the right time which will not strain you of your hard-earned cash in getting that perfect home. Budgeting is planning the expenses and revenues to be used just to acquire your dream home. Do not forget to ask the financing schemes choices available for buyers which will be convenient and applicable to you as a buyer. Most houses in the Philippines are available through Cash payment, Deferred Cash, Bank Financing ( banks are becoming competitive and have lowered interest rates to get new applicant for Home Loan for up to 20 years or more) and In-house Financing (higher at most starting at 16% to 24% interest per annum).

Currently, Home Development Mutual Fund (home loan from a government agency) or PAG-IBIG Fund has lowered from six (6%) percent interest rate starting at one (1) year to 30 years at twelve (12%) percent interest rates.

For Bank Rates, different banks are offering very low rates so don't forget to shop around and ask which bank offers the lowest interest rates fixed in how many years. So far, 8.5% interest p.a. is the lowest that China Bank (China Commercial Banking Corporation) and Bank of the Philippines Islands Family Bank at the time of this writing.

3.) SIZE AND TYPE - a house, condo or any structure to be used as home must be ample for you and your family. It meets the standards and quality that will last in a very long time and at the same time be a legacy to your children. As a home buyer, you should have foresight on what you will need and want to do with your home if you have children or expanding your home just to accommodate your growing family. House can be bungalow (ranch style), loft-type to 2-storey house in the suburbs or even within a studio to three bedroom condominium in a mid to high-rise building within the bustling city.

4.) HISTORY /BACKGROUND CHECK - Do not forget to investigate who you are dealing with (either the owner or from a land developer if it is a housing project) and property you are looking for. Beware of fraud, con artist with fake titles and be vigilant in falling prey with these criminal elements. There are times when the property you are buying is not what it seems to be and definitely has encumbrances or likewise not for sale at all. It needs to verified and checked at the Register of Deeds and also the Bureau of Internal Revenue (B.I.R.). All you need are photocopies of a Transfer Certificate of Title (TCT) or Condominium Certificate of Title, Tax Declaration, Location Map/Plan. If you have no time going to these places you can hire the service of a licensed real estate broker. A Licensed Real Estate Broker should be reliable and knowledgeable in detecting fake titles and determining the authenticity of the title of the property in question wherein he/she can give you transparent report on that particular property you want. Check first for the broker or agent if he/she is registered with Housing and Land Use Regulatory Board (HLURB).

If the property is mortgaged , it should have a Clearance to Mortgage from the HLURB.
For project developments, you can ask for the License to Sell from Housing and Land Use Regulatory Board (HLURB). You should also ask the date of completion of the projects.

5.) OCULAR INSPECTION - it is wise to conduct a site visit on the property, walk around it once in a while or make a drive by around the neighborhood and survey it. If you are inside the house, be meticulous in looking for flaws which need minor repairs and maintenance at the same time. You may not know that this particular unit is falling apart especially homes built more than 10 years or more (depends on the quality of materials used) so that when you move-in, you would have peace of mind and no worries at all.

6.) DOCUMENTATION - this process is very tedious and requires a lot of attention and emphasis on legal matters. You should read thoroughly on all the contents of the Contract to Sell especially the terms and conditions in fine print. Do not sign any blank form of the Contract to Sell. Always secure a copy of the Contract to Sell and all the documents you need to sign and make sure that the Contract to Sell would be registered by the owner/developer to the Register of Deeds. On payments, please pay directly to the owner/developer o the marketing agent authorized by the owner or developer. Do not forget to ask them to issue you official receipts and keep your receipts on file.

I hope this information blog could help you in finding that home in honest, clean and in a legal process that would achieve your dream home. Good Luck.

About the Writer

CRB Benedict Baluyut is an associate real estate professional of C. F. Baluyut Realty with PRC REB License No. 8358. He is the current Vice President for External Affairs with Real Estate Brokers Association of the Philippines, Inc (REBAP) - Pampanga Chapter.

Future Real Estate Outlook in Pampanga, Philippines

It is a typical for every Filipinos to dream of owning their very own house and lot especially for those who intend to build a family or any young urban professionals or "yuppies" who wish to be independent and settle on his own house or condo unit.

After the Asian Financial Crisis of 1997, real estate is steadily recovering and has been foreseen that growth from foreign investments especially for our balikbayan brethren who are looking for a property to live during their transition to life (retirement), as an investment opportunity or other leisure purposes it may serve. Different developers from major companies are looking ways to cater not just with ordinary people but also share the vision to our overseas Filipinos of dreaming their owning their home or a piece of the Philippines.

Outlook in the Philippine economy has been on a steady rebound due to major infrastructures development through the efforts of the government from irrigation of farm lands, road link of commodities to market, bridges, airport expansion and even seaport hub building. Also there are 11 identified or designated economic zone in the Philippines and Clark Special Economic Zone is now considered a Clark Freeport. Major malls such as SM Mall and Robinsons owned respectively by Taipans like Henry Sy and John Gokongwei are seeing potential growth and have venture also into property development same as with the Ayala clan of Ayala Land Inc. have seen Pampanga as the potential gateway of the world in the near future.

Likewise, Pampanga real estate is on the upswing since 2000 when major developers like the locally owned Central Country Estates, Inc and St. Catherine Realty and Development Corporation have began developing raw lands or agricultural lands to residential subdivision for the middle and upscale class of the Pampanga populace in the middle of nowhere as what they have envisioned in order to meet the demand. Also sharing the piece of the pie in the real estate development are low-cost home builders and low-cost subdivision developers who have made affiliations with Home Development Mutual Funds in providing homes for those who are seeking affordable homes through Home Development Mutual Funds or PAG-IBIG payment schemes.

Currently there are developments here that have sprouted sporadically from a small one hectare (2.5 acres) to whopping 400 hectares of residential leisure estates (900 acres) has been steadily undergoing construction. To add other development going on in Pampanga infrastructure development and rehabilitation of existing road networks, bridges and others will suffice the growth of these areas once they are readily available. An example of this is the on-going construction of the Subic - Clark - Tarlac Expressway (SCTEX) will be completed by the end of this year with addition of exits and interchange going to towns where this road links to Subic Bay Freeport's Tipo Road connection.

The top developers such as Ayala Land Inc (ALI), Robinsons Land Corporation (RLC), Filinvest Land and Fil-Estate have been viewing this region as the new growth corridor for development and have already invested in real estate development of residential subdivisions, malls, factories and production plants of consumable goods and others.

As Pampanga arose from the ashes brought about by Mt. Pinatubo eruption in 1991. The Kapampangan envisioned their homeland as a progressive as ever even if we have experienced the difficulties and trials in the past as we move on to the future.

About the Writer

CRB Benedict Baluyut is an associate real estate professional of C. F. Baluyut Realty with PRC REB License No. 8358. He is the current Vice President for External Affairs with Real Estate Brokers Association of the Philippines, Inc (REBAP) - Pampanga Chapter.

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