Maceda Law also known as the Republic Act 6552 or the Realty Installment Buyer Protection Act is an act that protects the buyer or real estate investor on residential properties purchased through installment.
Section 2 of Maceda law declared a public policy to protect buyers of real estate against onerous and oppressive conditions.
Coverage of Maceda Law
According to Section 3 of Maceda Law, its coverage is the Residential Real Estate properties (condominiums, apartments, houses, townhouses, and house & lots). Other non-residential properties such as industrial lots, commercial buildings, and sale to tenants under agrarian laws are excluded from this law.
The buyer is entitled to the following rights for installments made more than two (2) years:
A. Pay without additional interest, the unpaid installments due within the total grace period earned, that is, one month for every year of installment payment. This shall be exercised only once in every five (5) years during the life of the contract or its extension.
In case of cancellation:
B. A refund of the cash surrender value of the payments on the property equivalent to 50% of the total payments made. The buyer gets an additional 5% for every year for payments made after five (5) years but not to exceed 90% of the total payments.
Note: Cancellation will take effect 30 days from notice and upon payment of cash surrender value.
What if the buyer paid less than 2 years of installments?
Section 4 of Maceda Law states that:
A. The seller shall give the buyer at least 60 days grace period from the date the installment is due.
B. If the buyer fails to pay within the 60 days grace period, the seller may cancel the contract after 30 days from the receipt of the buyer of the notarized notice of cancellation or the demand for recision of the contract.
Note: Buyer can still pay within 30 days period with interest.
Can the buyer sell his/her purchased property?
Section 5 of Maceda Law states that the buyer can sell his rights or assign the same to another person by updating the account during the grace period given and before the actual cancellation of the contract. Deed of sale or assignment shall be done through a notarial act.
When and where can I pay my installment?
According to Section 6 of Maceda Law, the buyer has the right to pay in advance the installment or the full unpaid balance of the purchase at any time without interest.