Amending R.A. No. 6552 (Realty Installment Buyer Protection Act)

Senate See tie of the ser cretap TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 25 SEP 10 P6:29 First Regular Session ) SENATE RECEIVED BY. S. No. 1377 Introduced by SENATOR IV EJERCITO AN ACT AMENDING REPUBLIC ACT NO. 6552 OTHERWISE KNOWN AS THE "REALTY INSTALLMENT BUYER PROTECTION ACT" EXPLANATORY NOTE Enacted in August 1972, the Republic Act No. 6552 or the "Realty Installment Buyer Act" serves as a policy framework aimed at protecting buyers of real estate on installment payments. This further ensures their entitlement to refunds and grace periods before the cancellation of contract. While this law stands for more than five decades now, the industry is still challenged with cases on miscomputation and failed payments of refund, implementation of grace periods, non-compliance with the notice requirements, and refusal to vacate the property. These cases are found to arise from situations wherein sellers are favored more than the property buyers and significantly, from misinterpretations of the legislated policies. Last February 2025, the Supreme Court highlighted the mandate of the RA 6552, after its decision on State Investment Trust, Inc. (SITT) v. Carlos and Victoria Baculo, wherein SITI failed to issue a 60-day grace period for the buyer, as part of the cancellation requirements.1 1 Lobien, S. (2025, July 12). A 'fast and furious rally' in ph real estate seen in the next several years. INQUIRER.net. https://business.inquirer.net/535333/a-fast-and-furious-rally-in-ph-real-estate-seen-in-the-next-several- years

Such problems mitigate distrust between both parties, affecting the welfare of residents and inflicting potential harm to the market performance of realties. Furthermore, this measure provides fair recalibration of the refund mechanism and a reasonable basis for grace period in consideration of low-income buyers. In refining the existing legislation, the amendments also offer clearer rights, entitlements, and obligations and modified notice requirements aligned with modern practices. In 2025, the real estate industry is expected to gain its momentum and growth in the upcoming years.? While the sector continues to develop, it is only right to offer comprehensive policies that cater to timely needs and standards, cultivating a realty that meets reality. For the protection of buyers and the advancement of our country's property sector, the immediate passage of this bill is respectfully sought. JV EJERCITO 2 Panaligan, R. G. (2025, February 13). Sc reminds rights of buyers of real estate property on installment basis. Manila Bulletin. https://mb.com.ph/2025/2/13/sc-reminds-rights-of-buyers-of-real-estate-property-on-

Senate Difice of the Dantarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 25 SEP 10 P6:29 First Regular Session RECEIVED BY SENATE S. No.1377 Introduced by SENATOR JV EJERCITO AN ACT AMENDING REPUBLIC ACT NO. 6552 OTHERWISE KNOWN AS THE "REALTY INSTALLMENT BUYER PROTECTION ACT" Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

Section 1. Section Nos. 2,3,4,5,6, and 7 of Republic Act No. 6552 are hereby

amended to read as follows: "Sec. 2. Declaration of Policy. - It is hereby declared a public policy to protect buyers of [real estate] RESIDENTIAL PROPERTY on installment against [enerous and oppressive] INEQUITABLE conditions." "SEC. 3. DEFINITION OF TERMS. - FOR PURPOSES OF THIS ACT, UNLESS THE CONTEXT INDICATES OTHERWISE: (A) RESIDENTIAL PROPERTY- REFERS TO A LOT, HOUSE-AND-LOT, CONDOMINIUM UNIT, RESIDENTIAL FARM LOT OR RESIDENTIAL RESORT UNIT, THE DEVELOPMENT OF WHICH HAS BEEN APPROVED BY THE GOVERNMENT AGENCY OR INSTRUMENTALITY CONCERNED AS A SITE FOR DWELLING OR HOME SITE UNDER THE PROVISIONS OF PRESIDENTIAL DECREE NO. 957 OR BATAS PAMBANSA BLG. 2020, INCLUDING PARKING UNIT APPURTENANT TO THE RESIDENTIAL UNIT OR, WHILE NON-APPURTENANT, IS

INTENDED TO BE USED IN RELATION TO THE RESIDENTIAL UNIT. (B) INSTALLMENT SALE OF RESIDENTIAL PROPERTY - REFERS TO A TRANSACTION WHEREBY THE SELLER TRANSFERS POSSESSION OF THE PROPERTY TO THE BUYER BUT RETAINS OWNERSHIP THEREOF UNTIL FULL PAYMENT BY THE BUYER, WHERE THE BUYER BINDS HIMSELF TO PAY THE CONTRACT PRICE INCLUDING INTEREST IF ANY, IN RATABLY APPORTIONED OR FRACTIONAL PAYMENTS REGULARLY ACROSS AN AGREED PERIOD, AND WHICH REQUIRES AT LEAST TWO (2) INSTALLMENT PAYMENTS AFTER COMPLETION OF THE DOWN PAYMENT. IT DOES NOT INCLUDE A SALE WHERE THE BUYER MAKES FULL PAYMENT AFTER THE DOWN PAYMENT. (C) DELINQUENCY - REFERS TO FAILURE OF A BUYER TO PAY AN INSTALLMENT ON THE DATE AGREED UPON. (D) DEFAULT - REFERS TO A STATE WHERE A BUYER FAILS TO PAY TWO (2) CONSECUTIVE INSTALLMENTS, WHEREUPON THE FULL REMAINING BALANCE OF HIS ACCOUNT BECOMES DUE AND DEMANDABLE. (E) TOTAL PAYMENTS MADE - REFERS TO THE TOTAL OF THE AMOUNTS PAID BY THE BUYER EXCLUDING RESERVATION OR OPTION MONEY, INTEREST AND PENALTIES.

SEC. 4. COVERAGE. - THIS ACT SHALL COVER ALL

TRANSACTIONS OR CONTRACTS INVOLVING THE SALE OR FINANCING OF RESIDENTIAL PROPERTY ON INSTALLMENT PAYMENTS, BETWEEN A BUYER AND ANY PRIVATE OR GOVERNMENT ENTITY. IT SHALL NOT COVER CONTRACTS OF SALE INVOLVING MORTGAGE OR WHICH REQUIRE

TRANSFER OF OWNERSHIP TO THE BUYER PRIOR TO FULL PAYMENT OF THE CONTRACT PRICE.

SEC. 5. RIGHTS OF BUYERS ON INSTALLMENT. - BUYERS OF

RESIDENTIAL PROPERTY ON INSTALLMENT PAYMENTS SHALL HAVE THE FOLLOWING RIGHTS:" (A) THE BUYER SHALL, AT ANY TIME THAT THE CONTRACT REMAINS IN EFFECT, HAVE THE RIGHT TO TRANSFER OR ASSIGN HIS RIGHTS TO ANOTHER PERSON BY NOTARIAL ACT; PROVIDED, THAT THE TRANSFER OR ASSIGNMENT BEARS THE SELLER'S CONCURRENCE AFTER THE BUYER'S TRANSFEREE OR ASSIGNEE MEETS THE SELLER'S STANDARD CRITERIA FOR BUYER ELIGIBILITY; (B) A BUYER WHO IS NOT IN DEFAULT SHALL HAVE THE RIGHT TO PAY IN ADVANCE ANY INSTALLMENT OR THE FULL UNPAID BALANCE OF THE CONTRACT PRICE AT ANY TIME, LESS THE CORRESPONDING INTEREST IF ANY." (C) "IN CASE OF DEFAULT, IF THE TOTAL PAYMENTS MADE BY THE BUYER AMOUNTS TO NOT LESS THAN THIRTY PERCENT (30%) OF THE CONTRACT PRICE, HE SHALL HAVE THE RIGHT TO:" I. A GRACE PERIOD OF THIRTY (30) CALENDAR DAYS, COMMENCING FROM THE DATE OF DEFAULT, WITHIN WHICH TO UPDATE HIS ACCOUNT BY PAYING IN THE TOTAL INSTALLMENTS DUE INCLUDING PENALTIES AND ACCRUED INTEREST IF ANY, OR TO LIQUIDATE HIS ACCOUNT BY PAYING THE TOTAL UNPAID BALANCE OF THE PRINCIPAL INCLUDING PENALTIES, OR TO TRANSFER OR ASSIGN HIS RIGHTS TO ANOTHER PERSON; PROVIDED, THAT WHEN SELLING PRICE OF THE PROPERTY IS NOT MORE THAN THE PRICE CEILING FOR SOCIALIZED OR ECONOMIC

HOUSING AS PRESCRIBED BY THE DEPARTMENT OF HUMAN SETTLEMENTS AND URBAN DEVELOPMENT (DHSUD), THE GRACE PERIOD SHALL BE SIXTY (60) CALENDAR DAYS; PROVIDED FURTHER, THAT NO INTEREST OR PENALTY SHALL BE CHARGED DURING THE GRACE PERIOD; AND II. A REFUND EQUIVALENT TO THE TOTAL PAYMENTS MADE LESS THE FOLLOWING: (1) RENTALS FOR THE PERIOD COMMENCING FROM THE DATE OF EXECUTION OF THE CONTRACT UP TO THE DATE THE BUYER VACATES THE PROPERTY; AND (2) LIQUIDATED DAMAGES AMOUNTING TO NOT MORE THAN THIRTY PERCENT (30%) OF THE TOTAL PAYMENTS MADE; PROVIDED, THAT THE RENTAL RATE AND LIQUIDATED DAMAGES RATE SHALL BE CLEARLY STIPULATED IN THE CONTRACT (D) WHERE DEFAULTING BUYER IS A BENEFICIARY OF A SOCIAL, ECONOMIC OR LOW-INCOME HOUSING PROJECT OF A GOVERNMENT AGENCY OR LOCAL GOVERNMENT UNIT, HE SHALL HAVE THE RIGHT TO A RESTRUCTURING OF HIS ACCOUNT, SUBJECT TO REQUIREMENTS AND PROCEDURES PRESCRIBED BY THE AGENCY OR LOCAL GOVERNMENT UNIT IN ACCORDANCE WITH LAW.

SEC. 6. CANCELATION OF CONTRACT. - CANCELATION OF

CONTRACT UNDER THIS ACT SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS: (A) CANCELATION SHALL BE BY NOTARIAL ACT;"

(B) THE NOTICE OF CANCELATION SHALL BE SERVED TO THE BUYER IN ANY OF THE FOLLOWING MANNER: I. PERSONALLY, WHEREUPON THE NOTICE SHALL BE DEEMED RECEIVED UPON ACTUAL RECEIPT BY THE BUYER OR HIS DULY DESIGNATED REPRESENTATIVE; II. BY REGISTERED MAIL OR PRIVATE COURIER TO THE LAST ADDRESS DISCLOSED BY THE BUYER TO THE SELLER, WHEREUPON THE NOTICE SHALL BE DEEMED RECEIVED UPON ACTUAL RECEIPT, OR AFTER THE LAPSE OF FIFTEEN (15) CALENDAR DAYS FROM DELIVERY OR ATTEMPTED SERVICE; III. IF POSSESSION OVER THE RESIDENTIAL PROPERTY HAS BEEN TURNED OVER TO THE BUYER, SERVICE MAY BE TENDERED TO SAID ADDRESS, WHETHER OR NOT OCCUPIED BY THE BUYER, WITH A COPY SERVED TO THE CONDOMINIUM CORPORATION, HOMEOWNERS' ASSOCIATION OR THE SUBDIVISION OR BUILDING ADMINISTRATOR OR MANAGER, AS THE CASE MAY BE, WHEREUPON THE NOTICE SHALL BE DEEMED RECEIVED UPON ACTUAL RECEIPT; OR IV. BY ELECTRONIC MAIL OR OTHER ELECTRONIC MEANS OF COMMUNICATION TO THE ELECTRONIC ACCOUNT DISCLOSED BY THE BUYER TO THE SELLER, WHEREUPON THE NOTICE SHALL BE DEEMED RECEIVED UPON SENDING; PROVIDED, THAT THE COMMUNICATION SATISFIES THE REQUIREMENTS UNDER REPUBLIC ACT NO. 8792

OTHERWISE KNOWN AS THE ELECTRONIC COMMERCE ACT OF 2000, AS AMENDED. (C) CANCELATION SHALL TAKE EFFECT AFTER FIFTEEN (15) CALENDAR DAYS FROM THE ACTUAL OR CONSTRUCTIVE RECEIPT BY THE NOTICE OF CANCELATION AND, WHERE THE BUYER IS ENTITLED TO REFUND, PAYMENT BY THE SELLER OF THE FULL AMOUNT THEREOF; WHEREUPON, THE BUYER SHALL IMMEDIATELY TURN OVER POSSESSION OF THE PROPERTY TO THE SELLER AND VACATE PREMISES WITHOUT NEED OF DEMAND. (D) PAYMENT OF THE REFUND SHALL BE MADE AT THE SELLER'S OFFICE NEAREST TO THE BUYER'S ADDRESS LAST DISCLOSED TO THE SELLER, OR DIRECTLY CREDITED TO THE BUYER'S ACCOUNT STATED IN THE SELLER, OR CONSIGNED TO THE ORIGINAL OFFICE OF THE HOUSING AND REAL ESTATE DEVELOPMENT REGULATION BUREAU OF THE DHSUD NEAREST THE BUYER'S LAST DISCLOSED ADDRESS.

SEC. 7. VOID STIPULATIONS. - ANY STIPULATION IN ANY

CONTRACT HEREAFTER ENTERED INTO CONTRARY TO THE PROVISIONS OF THIS ACT SHALL BE NULL AND VOID."

Sec. 2. The following new sections are hereby inserted under Republic Act No.

6552, and shall read as follows: "SEC. 8. TRANSFER OF TITLE. - WITHIN THIRTY (30) CALENDAR DAYS FROM FULL PAYMENT OF THE CONTRACT PRICE BY THE BUYER, THE SELLER SHALL CAUSE THE ISSUANCE OF A TRANSFER CERTIFICATE OF TITLE IN THE NAME OF THE BUYER, THE FEES FOR WHICH SHALL BE PAID BY THE BUYER, SUBJECT TO PROVISIONS OF EXISTING LAWS.

SEC. 9. PENALTIES FOR DELINQUENCY - ANY PENALTY OR

ADDITIONAL INTEREST THAT THE SELLER MAY IMPOSE FOR

DELINQUENCY IN THE PAYMENT OF INSTALLMENTS SHALL NOT EXCEED ONE-AND-A-HALF PERCENT (1.5%) OF THE OVERDUE INSTALLMENT, FOR EVERY MONTH OR PORTION THEREOF THAT THE INSTALLMENT REMAINS UNPAID.

SEC. 10. JURISDICTION - THE HUMAN SETTLEMENTS

ADJUDICATION COMMISSION CREATED UNDER REPUBLIC ACT NO. 11201 SHALL HAVE EXCLUSIVE ORIGINAL JURISDICTION TO HEAR AND DECIDE CASES OR CONTROVERSIES INVOLVING PERFORMANCE OR OBLIGATIONS, INCLUDING EJECTMENT, UNDER THIS ACT. THE COMMISSION SHALL RENDER ITS DECISION WITHIN NINETY (90) DAYS FROM FILING THE CASE, WHICH DECISION SHALL BE IMMEDIATELY EXECUTORY AFTER THE LAPSE OF FIFTEEN (15) CALENDAR DAYS FROM THE DATE OF RECEIPT THEREOF BY THE PARTIES, AND SHALL BE NON- APPEALABLE. FOR PURPOSES OF ENFORCING ITS DECISION OR ORDERS, THE COMMISSION MAY CALL UPON ELEMENTS OF THE PHILIPPINE NATIONAL POLICE FOR ASSISTANCE. EJECTMENT CASES UNDER THIS ACT SHALL BE EXEMPT FROM COVERAGE OF SECTION 28 OF REPUBLIC ACT NO. 7279 OTHERWISE KNOWN AS THE "URBAN DEVELOPMENT AND HOUSING ACT OF 1992',"

SEC. 11. PENALTY CAUSE - ANY ACT OR OMISSION IN

VIOLATION OF THIS ACT SHALL BE PUNISHABLE BY A FINE EQUIVALENT TO FIFTY PERCENT (50%) OF THE CURRENT MARKET VALUE OF THE SUBJECT PROPERTY AS LISTED IN THE SCHEDULE OF MARKET VALUES OF THE LOCAL ASSESSOR CONCERNED.

Sec. 3. In the case of contracts executed prior to effectivity of this Act, the grace

period already earned by buyers under Republic Act No. 6552 shall not be affected.

Sec. 4. Implementing Rules and Regulations. - The Department of Human

2 Settlements and Urban Development (DHSUD), in consultation with stakeholders, shall 3 promulgate the implementing rules and regulations of the implementation of this Act 4 within ninety (90) days from its effectivity.

Sec. 5. Separability Clause. - If any provision of this Act shall be held

unconstitutional or invalid, the other provisions not otherwise affected shall remain in force and effect.

Sec. 6. Repealing Clause - All laws, decrees, orders, rules and regulations or

parts thereof inconsistent with or contrary to this Act, are hereby deemed repealed, amended or modified accordingly.

Sec. 10. Effectivity Clause. - This Act shall take effect upon fifteen (15) days

after its publication in the Official Gazette or in a newspaper of general circulation. Approved,