Dear PAO,

I purchased a pre-selling condominium unit here in Metro Manila in 2021. At that time, I was promised that the unit would be turned over by September 2024. A year has passed, and yet, the condominium building is still far from completion. I decided to stop paying my monthly installment because the developer failed to fulfill their promise regarding the timeline of construction and turnover of the condo. What will happen to my installment payments? Will it be forfeited in favor of the developer?

Vina

Dear Vina,

To protect the general public from fraudulent schemes, manipulations, and scams, the State enacted as early as 1976 a law regulating the sale of subdivision lots and condominium units in the Philippines. To be specific, Presidential Decree 957 (PD 957) was enacted to afford the citizens with secure and protected humannsettlements and to improve their quality of life.

PD 957 requires all developers to fulfill all their obligations to their buyers. Additionally, the same law provides that in the event of non-fulfillment of a developer of its promise with regard to the timeline of development and approved plans, certain rights are afforded to the buyers. Section 23 of the said law states:

“Section 23. Non-Forfeiture of Payments.

“No installment payment made by a buyer in a 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 subdivision or condominium 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.”

Based on this provision, any installment payment made by a buyer for a lot or unit in a subdivision or condominium project shall not be forfeited in favor of the owner or developer if the buyer, after giving proper notice, stops further payment due to the developer’s failure to develop the project in accordance with the approved plans and within the specified time frame. In such a case, the buyer may also choose to receive a full refund of the amounts paid, including amortization interest, but excluding delinquency interest, along with interest at the legal rate.

To answer your question, it is clear that the law mandates that the installment payments you made through the years may not be forfeited to the developer should you desist from continue paying the same after giving due notice to the developer. Alternatively, you may choose to receive a full refund, including amortization interest and legal interest, pursuant to the above-cited provision of PD 957. These rights are, of course, subject to the condition that you prove that the developer failed to develop the project according to the approved plans and within the time limit for complying with the same.

We hope that we were able to answer your queries. This advice was based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

We appreciate your trust and support.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected].