Can I Get My Money Back If Developer Delays Turnover?

Did you know that when the developer is at fault, you can demand to get the full amount of your investment? You can even demand for damages as you deem fit. Let’s start with the Presidential Decree No. 957 otherwise known as “Subdivision and Condominium Buyer’s Protective Decree.” This was initiated by the late President Ferdinand Marcos on July 12, 1976 and applied with the latest revised implementing rules and regulations in 2009. WHAT DOES IT DO? The primary purpose of this decree is to protect the buyers of condominium projects and subdivision developments against misrepresentations and fraudulent activities of developers, sellers and operators. Section 9 of the PD 957 talks about the revocation of registration certificate and license to sell. This is upon a verified valid complaint and satisfactory evidence by the buyer against the property developers or operators, of the following grounds: a. Is insolvent; or b. has violated any of the provisions of this decree or any applicable rule or regulation of the authority, or any undertaking of his/its performance bond; or c. has been or is engaged or is about to engage in fraudulent transactions; or d. has made any misrepresentation in any prospectus, brochure, circular or other literature about the subdivision project or condominium project that has been distributed to prospective buyers; or e. is of bad business repute; or f. does not conduct his business in accordance with law or sound business principles HOW ABOUT THE MOST COMMON SCENARIO WHICH IS THE DELAYED TURN OVER? Aside from revocation of registration certificate and license to sell SECTION 23 OF P.D. 957 covers the most common dilemma of property buyers, delay in the delivery of the project. SECTION 23. Non-Forfeiture of Payments. No installment payment made by a buyer in a new or existing subdivision or condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the owner or developer desists from further payment due to the failure of the owner or developer to develop the project according to the approved plans and within the time limit for complying with the same. Such buyer may at his option be reimbursed the total amount paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate. YOU CAN DO 2 THINGS: 1. Stop from further payment after due notice to the developer of the project and clearance from the DHSUD, or Dept of Human Settlement and Urban Development formerly known as HLURB as mandated in the 2009 revised implementing rules and regulations for the decree. YOU DEMAND TO BE REIMBURSED THE TOTAL AMOUNT PAID including amortization interests but excluding delinquency interests, with interest thereon at the legal rate. 2. DEMAND TO HASTEN THE TURNOVER OF YOUR UNIT. If you are going in this direction, I recommend these steps to accelerate progress of your case. 1. Keep your payments updated and keep all receipts. 2. If bank guarantee was required, ensure that this is also accomplished with documents 3. Review the CTS or Contract to Sell carefully. There is a provision of the expected turnover in that document. 4. Consult with your lawyer and have a written demand notice or letter to be sent to your developer stating your complaint and demands. In summary, you can demand for full reimbursement once your property turnover is delayed whether it is a condo or a house and lot. You are protected by PD 957 and can file a complaint with DHSUD, or Dept of Human Settlement and Urban Development formerly known as HLURB. Unfortunately, the COVID19 pandemic has stalled the real estate development and this is a major reason for the delayed turnover and is not the developers’ fault, so this is not covered by PD 957. So, I recommend you check with your real estate agent on the new estimate of turnover so it can align with your plan and expectation. But nonetheless, real estate remains to be one of the best forms of investment you can have. It is your way to prepare for your future and the future of your family. There maybe be unexpected delays on the development of your condo or house and lot but if the wait time is reasonable, you do not have to pull the trigger right away. As long as you remain in communication with your agent and the developer is transparent about the progress, then you should be okay. Once again this is George Ryan Sarmago, thank you for watching and if you learned something, hit on the like button. Peace.