A PROPOSED overhaul of the 54-year-old law governing installment purchases of real estate could give Filipino homebuyers longer grace periods, higher refund entitlements and more options to avoid losing properties after missed payments.
Senator Francis “Chiz” Escudero, chairman of the Senate Committee on Urban Planning, Housing and Resettlement, sponsored Senate Bill 2504 seeking to amend Republic Act 6552, or the Realty Installment Buyer Act, also known as the Maceda Law.
In a statement, Escudero said the law, enacted in 1972, needs to be updated to reflect current housing and financial conditions and provide greater protection to buyers who encounter payment difficulties.
Under the proposal, buyers who have paid installments for at least two years would receive a one-month grace period for every year of payments. They would also be entitled to a cash surrender value starting at 50 percent and increasing by five percentage points annually after five years, up to 90 percent.
Buyers who have paid for less than two years would be given a 60-day grace period.
The bill would also allow buyers during the grace period to transfer or assign their rights, pay installments in advance, or settle the remaining balance without surcharges.
Property cancellations would have to be executed through a notarial act and would take effect only after the 30-day period and payment of the required refund.
Delayed refunds would be subject to a penalty of 1.5 percent per month, while sellers would be required to transfer and register ownership within 120 days after full payment. Unjustified delays would carry a penalty equivalent to 0.05 percent of the contract price per month.
The proposal would also set ceilings on delinquency penalties and prohibit such penalties during the grace period.
Escudero said the proposed changes seek to prevent a single missed payment from wiping out years of installments paid toward homeownership. / KOC