Homebuyers in Negros who purchase residential properties on installment could receive stronger protection against contract cancellation and payment penalties under proposed amendments to the 54-year-old Realty Installment Buyer Protection Act.
Sen. Francis “Chiz” Escudero said Thursday, Oct. 1, that he is pushing amendments to Republic Act No. 6552, commonly known as the Maceda Law, to provide additional safeguards for buyers who experience difficulty paying their installments.
The existing law covers installment purchases of real estate, including residential condominium units, and provides grace periods and refund rights to qualified buyers who default on succeeding payments.
The proposed changes would apply nationwide, including to covered installment homebuyers in Negros Island Region if enacted.
Escudero said buyers who have paid installments for at least two years would continue to receive a one-month grace period for every year of payments made.
They would also be entitled to a cash surrender value starting at 50 percent of payments made, increasing by five percentage points annually after five years of payments until reaching a maximum of 90 percent.
The existing Maceda Law already provides a one-month grace period for every year of installment payments for buyers who have paid at least two years and a cash surrender value beginning at 50 percent if the contract is cancelled.
Under the proposed amendments, buyers who have paid for less than two years would be entitled to a 60-day grace period.
Escudero said buyers would also be allowed during the grace period to transfer or assign their rights, pay installments in advance or settle the remaining balance without surcharges.
The proposal would require contract cancellations to be made through a notarial act and become effective only after the prescribed 30-day period and payment of the required refund.
Delayed refunds would carry a penalty of 1.5 percent per month, according to Escudero’s office.
Sellers would also be required to transfer and register ownership of a property within 120 days after full payment, with unjustified delays subject to a penalty equivalent to 0.05 percent of the contract price per month.
The proposed amendments would also set limits on delinquency penalties and prohibit such charges during the grace period.
Escudero said the measure is intended to prevent temporary payment difficulties from immediately wiping out years of installments already paid by homebuyers.
The proposal remains subject to the legislative process and the existing provisions of RA 6552 remain in force unless amendments are enacted.*
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