Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon Ci

FIFTEENTH CONGRESS
First Regular Session

House Bill No, 1697

Introduced by Hon. Rodolfo G. Biazon

EXPLANATORY NOTE,

Numerous cases of misrepresentation of subdivision owners, developers and realtors
have been made against unsuspecting buyers who have been continuously victimized.
Among the cases of misrepresentations are the following:

(1) When parcels of land are being sold even if there is still no individual title available;

(2) When the subdivision lot is already 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;

(3) 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;

Apart from these misrepresentations, the buyers on installment have also to deal with
contracts that create the 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 not 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.

Lone District, Muntinlupa City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
FIFTEENTH CONGRESS

First Regular Session

House Bill No._ 1637

Introduced by Hon, Rodolfo G. Biazon

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
ANOTATION ON THE TITLE OF THE CONTRACT TO SELL OR 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 MEASURES, INCLUDING THE IMPOSITION OF
PENALTY FOR VIOLATION THEREOF

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

E No piece of real estate as contemplated in Republic Act No. 6552,
otherwise known as “Realty Installment Buyer Protection Act” shall be offered for sale on
installment payment unless it is covered by a separate and individual Torrens Certificate of
Title to constitute a real estate mortgage or any lien or encumbrances.

Sec. 2. It shall be unlawful for any subdivision or individual owner of any piece of
real estate covered by any separate or individual Torrens Certificate of Title to constitute a
real estate mortgage or any lien or encumbrance over the said title whenever the same has
already been sold to any third person in installment payments.

Sec. 3. Once the buyer and seller shall have signed the contract to sell or contract of
sale over any piece of real estate on installment 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 Register 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.

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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, shall
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: (1) all the
water, electrical and telephone systems with provisions for the installation of individual water
and electric meters and telephone cable lines have been installed; (2) a 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 (3) 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 and from then to assume the responsibility of
maintaining and repairing the same.

Sec. 7. Any buyer of real estate on installment payments as contemplated in this Act
shall have the right to take possession of the property purchased upon the execution of the
appropriate contract to sell 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 payment 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
(HLURB) shall promulgate such rules and regulations as may be necessary to implement and
enforce the provisions of this Act.

Sec. 10. Any stipulation in any contract hereafter entered into contrary to the
provisions of this Act shall be null and void.

Sec. 11. Any act or omission in violation of this Act or any of the pertinent rules and
regulations of the HLURB shall be punishable by a fine of Ten thousand pesos (P 10,000.00)
and by imprisonment of one (1) year.

Sec. 12. All laws, executive orders, decrees, rules or regulations inconsistent with the
provisions of this Act are hereby repealed, amended or modified accordingly.

Sec. 13. This Act shall take effect upon its approval.

Approved,