RA 6552 What You Need To Know About The Maceda Law

WHO IS COVERED BY THE MACEDA LAW?
There are two categories of qualified buyers who are afforded protection, and this is under section 3 and section 4 of the law. 

Under Section 3 of RA 6552, a qualified buyer is one who has paid at least two years of installments in all transactions or contracts involving the sale or financing of real estate on installment payments. Properties covered include residential condominiums, apartments, houses, townhouses, and house and lots, among others, but exclude industrial lots, commercial buildings, and sales of properties to existing tenants.

And under Section 4, on the other hand, a qualified buyer is also one who has purchased any of the properties is just enumerated, but who has paid less than two years of installments.

So if the contract is canceled because the buyer is not capable of continuing the payment but has made at least two years of installment, the seller shall refund fifty percent (50%) of total payments 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 of the contract shall take place after thirty 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.

However, if the buyer has paid less than 24 months of installment and cannot proceed with the payment, there is no refund. The seller shall give the buyer a grace period of not less than sixty days from the date the installment became due. If buyer fails to pay the installments due at the expiration of the grace period. The seller is entitled to the cancellation of the contract. The seller, must first notify the buyer of the cancellation, or of the demand for rescission of the contract. 

This notice or demand must be by a notarial act and shall only render the cancellation or rescission effective 30 days after such notice or demand has been made.

DOES THE MACEDA LAW ALSO COVER BEHIND PAYMENTS?
If the buyer has paid at least two years of installments, and is falling behind on payment, say because of the pandemic and he wants to hold on to cash as much as possible, he can still pay without additional interest, due within the total grace period of two months or one month grace period for every one year of installment payments made.

So, what about if the buyer is falling behind on his payment and he has less than 2 years of installment?

It is specified in section 4 that In cases where less than two years of installments were paid, the seller shall give the buyer a grace period of not less than sixty days from the date the installment became due.

Is it covered under the Maceda Law to sell or assign his rights to the property to another person?
The answer is yes. This has been clearly explained in Section 5 where all buyers are protected by Sections 3 and 4 are entitled to sell or transfer to another person their rights over the property. 

The buyer can even reinstate the contract by updating the account during the grace period and before actual cancellation of the contract. However, this exchange must be made before the contract is fully terminated. The subsequent selling or assignment certificate must be rendered through a notarial act.