AN ACT TO PROVIDE PROTECTION TO
BUYER OF REAL ESTATE ON
INSTALLMENT PAYMENTS
Be it enacted by the Senate and House of
Representatives of the Philippines in
Congress assembled:
SECTION 1. This Act shall be known as th
e “
Realty Installment Buyer Protection Act.
”
SECTION 2. It is hereby declared a public po
licy to protect buyers
of real estate on
installment payments against on
erous and oppressive conditions.
SECTION 3. In all transactions or contracts,
involving the sale or fi
nancing of real estate
on installment payments, including
residential condominium apartm
ents but excluding industrial
lots, commercial buildings and
sales to tenants under Republic
Act Numbered Thirty-Eight
hundred forty-four as amended by Republic Ac
t Sixty-three hundred ei
ghty-nine, where the
buyer has paid at least two years of installments
, the buyer is entitled to the following rights in
case he defaults in the paym
ent of succeeding installments:
(a) To pay, without additional interest, the unp
aid installments due w
ithin the total grace
period for every one year of installment paymen
ts made; provided, That this right shall be
exercised by the Buyer only once in every five years
of the life of the contract and its extensions,
if any.
(b) If the contract is cancelled, the se
ller shall refund to th
e buyer the cash surrender
value of the payments on the propert
y equivalent to fifty percent of
the total payments made and,
after five years of installments, an additional five
per cent every year but not to exceed ninety per
cent of the total payments made; provided, that the actual
cancellation or the demand for
rescission of the contract by a notarial act and upon full
payment of the
cash surrender value to
the buyer.
Down payments, deposits or options on the c
ontract shall be included in the computation
of the total number of installment payments made.
SECTION 4. In case where less than two years
of installments were paid the seller shall
give the buyers a grace pe
riod of not less than sixty days fr
om the date the installment become
due. If the buyer fails to pay the installments due
at the expiration of the grace period, the seller
may cancel the contract after thirty days from receipt by the
buyer of the notice of cancellation or
the demand for rescission of th
e contract by a notarial act.
SECTION 5. Under Section 3 and 4, the buyer
shall have the right to
sell his rights or
assign the same to another person or to reinst
ate the contract by updating the account during the
grace period and before actual cance
llation of the contract. The deed
of sale or assignment shall
be done by notarial act.
SECTION 6. The buyer shall have the
right to
pay in advance any installments or the full
unpaid balance of the purchase price any time wit
hout interest and to have such full payment of
the purchase price annotated in the cert
ificate of title c
overing the property.
SECTION 7. Any stipulation in any contract
hereafter entered into contrary to the
provisions of Sections 3, 4,
5 and 6, shall be null and void.
SECTION 8. If any provisions of this Act
is held invalid or unconstitutional no other
provision shall be affected thereby.
SECTION 9. This Act shall take effect upon its approval.
Approved August 26, 1972
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