Tuesday, September 23, 2008
A client was inquiring what rights she may have left after having defaulted in the monthly installments of her residential condominium unit. She said she has already paid more than P1.5-million in installments. She is asking whether she can still get back the installment payments she had already made.I think the Maceda Law comes into play to this query.Republic Act No. 6552 is a law that seeks to protect buyers of realty on installments.It is popularly known as the Maceda law, in attribution to its author.If one is a buyer of real estate, including residential condominium, on installments, the buyer may still retain certain rights even if he defaults in his payments.If the buyer has already paid at least two years installments, he has two rights under the Maceda law.First, he can continue paying the unpaid installments due without additional interest.He must pay within the grace period.The grace period is one month for every one year of installments paid.Second, his other option is he can get a cash surrender value, or refund of the installment payments made.He can get a refund of fifty percent of his total installment payments.The buyer can opt for the cash surrender value or refund if the contract is canceled.If the buyer has paid less than two years installment, his option is to continue paying the installments.The seller has to give the buyer a grace period within which to continue paying the installments due.The grace period is not less than sixty days.