THIRTEENTH CONGRES 
) 
OF THE PHILIPPINES 
First Regular Session 
”04 JllN 
Introduced by Senator S. R. OsmeAa 111 
EXPLANATORY NOTE 
Numerous cases of misrepresentation of subdivision owners, 
developers and realtors have been made against unsuspecting buyers 
who have be.en continuously victimized. 
Among the cases of 
misrepresentations are the following: 
(1) 
(2) 
When parcels of land are being sold even if there is still no 
individual title available; 
When the subdivision lot is being sold and it is still not ready for 
occupancy due to lack of provisions for water, light and telephone 
facilities, the roads are not yet cemented/asphalted or there are 
no proper drainages in place; 
When a real estate mortgage has been constituted over a piece of 
property absent any knowledge of the buyer who pays the entire 
amount but is not issued the title over the said property; 
(3) 
Apart from these misrepresentations the buyers on installment have 
also to deal with contracts that create undue advantages in favor of the 
vendors. Examples of these unfair stipulations are the following: 
(1) That the liability for real estate taxes are immediately transferred to 
the buyer upon the execution of the contract; 
(2) That the contract price and interest rates shall be adjusted in any 
event of devaluation of Philippine Currency; and 
(3) That the seller may refuse to allow the buyer to take immediate 
possession of the property purchased unless all installments are 
paid. 
Although R. A. No. 6552 otherwise known as the “Realty 
Installment Buyer Protection Act” is in effect, such law does no explicitly 
address many of the problems currently being encountered by the 
unsuspecting buyers. This bill seeks to plug these loopholes. Hence, the 
immediate enactment of this measure is earnestly requested. 
SERGIO OSMENA 111 
Senator 


*XI n 
hL-lG&*rE 
THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
First Regular Session 
. .  
II ..: 
introduced by Senator S. R. OsmeAa 111 
AN ACT 
TO PROVIDE ADDITIONAL PROTECTION§ TO BUYERS OF REAL 
ESTATE 
ON 
INSTALLMENT 
PAYMENTS 
BY 
REQUIRING 
SUBDIVISION OR REAL ESTATE OWNERS TO HAVE AN INDIVIDUAL 
TITLE ON EVERY LOT AVAILABLE FIRST BEFORE OFFERING THE 
SAME FOR SALE, PROHIBITING ANY MORTGAGE, LIEN OR 
ENCUMBRANCE ON THE SAME, MAKING THE ANNOTATION ON 
THE TITLE OF THE CONTRACT TO SELL OR OF SALE MANDATORY, 
MAKING IT COMPULSORY FOR THE EXECUTION OF A DEED OF 
ABSOLUTE SALE AND THE DELIVERY OF THE TITLE TO THE 
BUYER UPON COMPLETION OF INSTALLMENT PAYMENTS, AND 
PROVIDING OTHER PROTECTIVE MEASURE§, INCLUDING THE 
IMPOSITION OF PENALTY FOR VIOLATION THEREOF 
Be if enacfed by fhe Senate and House of Representatives of the 
Philippines in Congress assembled: 
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SECTION I. No piece of real estate as contemplated in Republic 
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Act No. 6552, otherwise known as “Realty Installment Buyer Protection 
Act” shall be offered for sale on installment payments unless it is covered 
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by a separate and individual Torrens Certificate of Title to constitute a real 
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estate mortgage or any lien or encumbrances. 
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SEC. 2. It shall be unlawful for any subdivision or individual owner 
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of any piece of real estate covered by any separate or individual Torrens 
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Certificate of Title to constitute a real estate mortgage or any lien or 
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encumbrance over the said title whenever the same has already been sold 
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to any third person on installment payments. 
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SEC. 3. Once the buyer and seller shall have signed the contract 
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to sell or contract of sale over any piece of real estate on installment 


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payments covered by a separate or individual Torrens Certificate of Title, 
the said contract shall be immediately annotated by the seller at the back 
of the said title on file with the Registrar of Deeds of the provinces or city 
where the property is located: Provided, That if the seller should neglect or 
refuse to do his obligation herein stated, the buyer shall have the absolute 
right to have his contract annotated upon mere presentation of his contract 
to sell or contract of sale. 
SEC. 4. Payment of taxes shall remain to be the obligation of the 
seller of real estate on installment payments notwithstanding the execution 
of the contract to sell or contract of sale, but such obligation shall be 
transferred to the buyer from the moment the latter shall have started 
taking physical possession of the real estate purchased on installment 
payments, or the title is transferred to the buyer. 
SEC. 5. Upon the completion of the installment payments on any 
piece of real estate, the seller, without the necessity of demand shall 
within thirty (30) days therefrom execute in favor of the buyer, his heirs, 
assigns and successors-in-interest an absolute deed of sale and deliver 
the same to the latter together with the owner’s duplicate certificate of title 
over the real estate purchased. 
SEC. 6. No subdivision lot shall be offered for sale to the public 
unless all the water, electrical and telephone systems with provisions for 
the installation of individual water and electric meters and telephone cable 
lines, good drainage system that is duly approved by the municipal or city 
engineer as the case may be, and especially the roads within the 
subdivision have either been fully cemented or asphalted with the 
measurement of at least six inches (6”) thick and unless the said roads 
have been donated to the municipality or city where the subdivision lots 
are located which shall be obliged to immediately accept the said donation 


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thesame. 
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SEC. 7. Any buyer of real estate on installment payments as 
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contemplated in this Act shall have the right to take possession of the 
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property purchased upon the execution of the appropriate contract to sell 
and from then to assume the responsibility of maintaining and repairing 
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or contract of sale and the application for a building permit solely signed 
by the buyer shall suffice for the issuance of a building permit to construct 
any improvement on the property purchased. 
SEC. 8. The contract price and interest rates stipulated in the 
contract to sell or contract of sale of real estate on installment payments 
shall remain constant and unaffected notwithstanding any artificial 
depreciation or devaluation of the Philippine currency. 
SEC. 9. Upon the effectivity of this Act, the Housing Land Use 
Regulatory Board shall promulgate such rules and regulations as may be 
necessary to implement and enforce the provisions of this Act. 
SEC. 
I O .  Any stipulation in any contract hereafter entered into 
contrary to the provisions of this Act shall be null and void. 
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SEC. 11. Any act or omission in violation of this Act or any of the 
pertinent rules and regulations of the Housing and Land Use Regulatory 
Board shall be punishable by a fine of Ten thousand pesos (PlO,OOO.OO) 
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and by imprisonment of one (1) year. 
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SEC. 12. All laws, executive orders, decrees, rules or regulations 
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inconsistent with the provisions of this Act are hereby repealed, amended 
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or modified accordingly. 
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SEC. 13. This Act shall take effect upon its approval. 
Approved,