MACEDA LAW RA 6552: Realty Installment Buyer Protection Law
Maceda Law is the law that provides protection to buyers of real estate on installment payment. It is also known as Realty Installment Buyer Protection Law.
All transactions or contracts involving the sale or financing of real estate on installment basis, including residential condominium apartments where the buyer has paid at least two (2) years installments.
Rights of the buyers in case of default in payments of the succeeding installments
To pay without additional interest the unpaid installment due within the total grace period earned;
In case of contract cancellation, to be refunded with at least fifty percent (50%) of the cash surrender value of the installment payments made with an additional five percent (5%) thereof if installment payments are made after five years but not more than ninety percent (90%) of the total payments made;
To sell or assign the rights to another person;
To reinstate the contract by updating the accounts during the grace period and before the actual cancellation of the contract;
To pay in advance any installment;
To pay anytime the full the balance of the purchase price without any interest; and
To have the full payment annotated in the Certificate of Title of the property.
Allowable grace period:
The unpaid installment payments which are due and demandable shall have a grace period of one (1) month for every one (1) year of installment payments made.
Buyers who paid installments of less than two (2) years
They are also protected by the Maceda Law. The buyers are entitled to a grace period of sixty (60) days to pay their amortization from the date the installment became due and demandable.
Cancellation of Contract
In case of cancellation of the contract, buyers under the Maceda Law (RA#6552) are entitled to receive refund of the cash surrender value equivalent to fifty percent (50%) of the installments made but not to exceed ninety percent (90%) of total payments made.
If the contract is under Maceda Law (RA#6552), buyer who has paid two (2) years installments shall be refunded an amount equivalent to fifty percent (50%)of the total payments made and shall also be entitled to a grace period of 60 days.
>>>There are types of sale which are not covered by Maceda Law
1. Sale of Commercial buildings;
2. Sale of Industrial lots;
3. Sale to tenants under RA#3844; and
4. Installment sales covered by Sale with Mortgage and not by Contract to Sell.
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