Maceda Law in Practice

In 1972, former Senator Ernesto Maceda saw the need to protect real estate buyers by legislating the "Realty Installment Buyer Protection Act," more popularly known as the "Maceda Law."

Under this law, buyers of RE properties who have paid for at least two years and defaulted from the remaining installments are entitled to a refund of 50% of the total payments made.

The law explicitly states:

"If the contract is canceled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to 50% of the total payments made...The actual cancellation of the contract shall take place after 30 days from receipt by the buyer of the notice of 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."

But how do you go about it? What can you expect when you exercise this law?

Getting back half of what you paid doesn't always happen–even if you complied with what's required by the law. The Department of Human Settlements and Urban Developments (DHSUD; formerly HLURB) is bewildered by these claims and has a long waiting line. You may see yourself caught in legal loopholes to force you to agree to a lower amount (~30% of total payments after deducting "marketing expenses").

Some tips:

1. Get a good real estate lawyer (someone you trust), not just any lawyer

2. Get a demand letter sent to the developer; this will show the developer you mean business.

3. Expect the process to take several months and expect to make continuous follow-ups.

4. Have all communications by email, so there's a paper trail. If the developer representative calls you, insist on having an email communication instead.

5. Make sure you understand all the documents you'll sign; if in doubt, have your lawyer explain what you're signing.

Good luck!