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.