What the Maceda Law is
Republic Act No. 6552, the Realty Installment Buyer Protection Act (1972), protects buyers of real estate on installment payments. It generally applies to residential property bought in installments, and does not cover industrial lots, commercial buildings or sales to tenants under agrarian reform laws.
If you have paid at least two years of installments
- Grace period: you are entitled to one month of grace for every year of installments paid. This right can be used once every five years of the contract's life.
- Cash surrender value: if the contract is cancelled, you are entitled to a refund of 50% of total payments made. After five years of installments, an additional 5% per year applies, up to a maximum of 90% of total payments.
- Cancellation process: the seller may cancel only after 30 days from your receipt of a notarial notice of cancellation or demand for rescission, and only after refunding the cash surrender value.
If you have paid less than two years
- You are entitled to a grace period of at least 60 days from the due date of the missed installment.
- If you do not pay within the grace period, the seller may cancel after 30 days from your receipt of a notarial notice of cancellation.
Other buyer rights
- You may sell or assign your rights to another person, with proper documentation.
- You may pay in advance, and may ask for an updated statement of account.
The rules on what counts as a covered sale and how refunds are computed can be technical. If you are facing cancellation, consult a lawyer or the housing regulator.