FIFTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

915

House No.

Introduced by Representative Susan A. Yap

EXPLANATORY NOTE

It is the policy of the State to undertake, in cooperation with the private sector, a
comprehensive and continuing urban development. Subdivision and condominium projects
continued to thrive over the last decade brought about by lower interest rates and increased
remittances from OFWs. This prompted many of our kababayans co buy houses and condominium
units, which correspondingly increased queries and complaints against property developers.

Lack of clatity of laws is one of the problems seen in the real estate market. Towards this
end, certain remedial measures ought to be introduced to the operational provisions of the
Subdivision and Condominium Buyers’ Protective Decree (PD 957) in order to strengthen and make
the same responsive and attuned to the needs of the present times.

During the year 2007, HLURB issued 1,870 Licenses to Sell (LS) for residential and non-
residential projects or 89% of the target of 2,100. About 62% or 1,112 of the residential projects
issued LS were simple subdivisions, 262 or 15% open market, 12% or 213. economic, 7% or 77
socialized, and 4% or 77 condominium projects.

The 1,796 licensed residential projects covered 172,967 lots or house and lots. Of these, open
market housing had the biggest share of 58,237 at 34%, followed by economic and socialized housing
with 45,292 and 45,101 units at 26% respectively, condominium with 20,631 units at 12% and simple
subdivision with 3,706 units at 2% (2007 HLURB Accomplishment report)

This proposed bill clarifies the role of the developer for the registration of deeds of sale and
contract to sell to those buyers who have already paid the full purchase price and those buyers who are
paying in installment. Another provision which seeks to put into law a common practice, is as regards
the partial release of the title in case of buyers under mortgage, to wit: “the deed of sale or contract to
sell covering a lot or unit subject of a mortgage shall include a partial release clause or a provision
guaranteeing the release of the title to said lot or unit upon full payment by its buyer (Section18).”

Because of the advent of condominium projects, this bill updates PD 957 on the inclusion of
condominiums in the cover of prohibition of alteration of plans (Section 22) without the approval of
the majority of homeowners association, or in the absence thereof, of majority of condominium unit
buyers who have already paid at least 50% of the purchase price.

This bill also directs developers to compulsory donation of roads, alleys, and open spaces
reserved for schools, hospitals, barangay centers, and the like to the local government unit in
jurisdiction.

Representative, 2"( Dis}rigt of Tarlac


CaerdaureNne

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FIFTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No.__915

Introduced by Representative Susan A. Yap

AN ACT
TO INSTITUTE REFORMS IN THE SUBDIVISION AND CONDOMINIUM BUYERS’
PROTECTIVE DECREE

Be it enacted by the Senate and the House of Repre:
assembled:

atives of the Philippines in Congress

SECTION 1. Short Title. - This Act shall be known as “The Subdivision and Condominium
Buyers’ Protective Decree Amendments of 2010”.

SEC. 2. Declaration of Poly. - It is the policy of the State to underta
private sector, a comprehensive and continuing urban development
remedial reforms ought to be introduced to the operational provisior
Decree in order to strengthen and m
ent times.

c, in cooperation with the
owards this end, certain
of the Subdivision and
¢ the same responsive and

attuned to the needs of the pre

3. Remedial Provisions. - For purposes of this Act and in order to strengthen Presidential
Decree No, 957, entitled: “Regulating the Sale of Subdivision Lots and Condominiums, Providing
Penalties for Violations Thereof, otherwise known as The Subdivision and Condominium Buyer's
Protective Dectee, the following provisions are hereby amended:

(@) Paragraph 1, Section 5 of Presidential Decree No. 957 is hereby amended to read as
follows

“SEC. 5. License to Sell. - A CERTIFICATE OF REGISTRATION
DOES NOT AUTHORIZE [S]such Owner or dealer {to whom has been issued a
registration certificate shall not, however, be authorized] to sell any subdivision lot
or condominium unit in the registered project {unless} UNTIL he shall have first
obtained a license to sell the project within two weeks from the registration of such
project.”

(b) Paragraph 1, Section 17 of Presidential Decree No. 957 is hereby amended to read as
follows:

“SEC. 17, Registration. - All [contracts to sell] deeds of sale [and other
similar instruments relative to the sale or conveyance] of [the] subdivision lots and
condominium units, [whether or not the] WHOSE purchase price is ALREADY
paid in fullf shall be registered by the seller ir the Office of the Register of Deeds
of the province or city where the propery is situated. IN CASES OF
INSTALLMENT PAYMENTS, THE CONTRACT TO SELL SHALL
ALSO BE REGISTERED BY THE DEVELOPER WITH THE PROPER
REGISTER OF DEEDS AT THE EXPENSE OF THE BUYER:
PROVIDED, FURTHER, THAT IN CASE OF CANCELLATION OR

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RESCISSION OF SAID CONTRACT TO SELL, SUCH REGISTRATION
OF CONTRACT TO SELL SHALL BE CANCELLED BY THE PROPER
REGISTER OF DEEDS, WITHOUT NEED OF ANY COURT ORDER,
UPON EXECUTION BY THE SELLER OF AN AFFIDAVIT THAT SAID
CONTRACT TO SELL HAS BEEN CANCELLED OR RESCINDED
DUE TO DEFAULT ON THE PART OF THE BUYER, WITHOUT
PREJUDICE TO THE RIGHTS OF THE BUYER UNDER REPUBLIC
ACT NO. 6552, OTHERWISE KNOWN AS THE “MACEDA LAW”:
PROVIDED, FINALLY, THAT THE AUTHORITY SHALL HAVE
JURISDICTION OVER DISPUTES BETWEEN THE BUYER AND THE
SELLER REGARDING THE CANCELLATION OF THE
REGISTRATION OF A CONTRACT TO SELL.”

(c) Section 18 of Presidential Decree No. 957 is hereby amended to read as follows:

“SEC. 18. Mortgages. - No mortgage on any unit or lor shall be made by
the owner or developer without prior written approval of the Authority, Such
not be granted unless it is shown that the proceeds of the mortgage
Joan shall be used for the development of the condominium or subdivision project

and effective measures have be h utilization. ‘The loar

approval sha

provided to ensure su
value of each lot or unit covered by the mortgage shall be determined and the buyer
thereof, if any, shall be notified before the release of the loan, THE DEED OF

SALE TO SELL COVERING A LOT OR UNIT
SUBJECT OF A MORTGAGE SHALL INCLUDE A PARTIAL RELEASE
CLAUSE OR A PROVISION GUARANTEEING THE RELEASE OF
THE TITLE TO SAID LOT OR UNIT UPON FULL PAYMENT BY ITS
BUYER, The buyer may, at bis option,
directly to the mortgagee who shall apply the payments to the corresponding
mortgage indebtedness secured by the particular lot or unit being paid for, with a
view to enabling said buyer to obtain title over the lor or unit promptly after full

his installment for the lot or unit

payment thereof.”

(d) Section 20 of Presidential Decree No. 957 is hereby amended to read as follows

. 20. Time of Completion. - Every owner or developer shall
construct and provide the facilities, improveme ractures and other forms
of development, including water supply, | lighting facilities, AND
DEVELOPMENT OF ROADS, AS PROVIDED FOR [which are offered and
indicated} in che approved sub
prospectus, printed manners, letters or
year] EIGHTEEN (18) MON’

on or condominium plans,
any form of advertisement, within [one
the date of the issuance of the license
for the subdivision or condominium such other period of time as may be
fixed by the Authority|.|: PROVIDED, THAT IN CASES OF FORTUITOUS
E S$, THE AUTHORITY SHALL THEREAFTER DETERMINE
‘THE REASONABLE TIME WITHIN WHICH THE PROJECTS SHALL
BE COMPLETED. “IN THE EVE” THAT THE OWNER OR
DEVELOPER FAILS TO COMPLETE THE DEVELOPMENT OF THE
PROJECT AFTER THE PERIOD OF EIGHTEEN (18) MONTHS
MANDATED ABOVE FOR ITS COMPLETION FROM THE DATE OF
‘THE ISSUANCE OF THE LICENSE FOR THE SUBDIVISION OR
CONDOMINIUM PROJECT, AND UNLESS THE AUTHORITY SETS
ANOTHER TIME FOR COMPLETION OWING TO THE
CIRCUMSTANCES STATED ABOVE, THE AUTHORITY SHALL
DECLARE THE PROJECT ABANDONED AND THE ROADS IN THE
ABANDONED PROJECT SHALL BECOME PUBLIC IN CHARACTER
ONE YEAR FROM THE DECLARATION OF ABANDONMENT OF
THE PROJECT.

brochures,



57 is hereby amended 10 read as follows
No owner or developer shall change or
cilities for public use and/or other
form of subdivision OR CONDOMINIUM development as contained in the
approved subdivision OR CONDOMINIUM plan and/or represented in its
auvertisements, without the permission of the Authority and the written conformity
or consent ofthe duly organized homeowners association OR CONDOMINIUM
CORPORATION, or in the absence of the latter, by the majority of the [lot]
bayers fin the] OF subdivision LOTS OR CONDOMINIUM UNITS WHO
HAVE ALREADY PAID AT LEAST FIFTY PERCENT (50%) OF THE
PURCHASE PRICE.”

(Section 25 of Presidential Decree No. 957 is hereby amended to read as follows:
“SEC. 25. Issuance of Title. - The owner or developer shall deliver the
tide of the lot oF unit to the buyer upon full payment of the lot or unit[,}
PROVIDED, THAT WHERE THE OWNER OR DEVELOPER
PROPERLY PROCESSED AND SUBMITTED THE DOCUMENTS TO
THE GOVERNMENT AGENCIES CONCERNED FOR ISSUANCE OF
TITLE AND THE DELAY IN THE ISSUANCE OF TITLE IS NOT ‘THE
FAULT OF SUCH OWNER OR DEVELOPER OR WHERE THE NON-
ISSUANCE IS PURSUANT TO A COURT ORDER, THE OWNER
AND/OR DEVELOPER SHALL NOT BE HELD LIABLE FOR SUCH
DELAY OR NON-ISSUANCE OF TIT!
the registration of the deed of sale in the Registry of Deeds, shall be collected for
the issuance of such tide. In the event a mortgage over the lot or unit 1s outstanding
at the time of the issuance of the title (0 the buyer, the owner or developer shall
redeem the mortgage or the corresponding portion thereof [within six months)

No fees, except those required for

29 IMMEDIATELY from such issuance in order that the title over any fully paid lot
30 or unit may be secured and delivered to the buyer in accordance herewith. IN
31 SUCH A CASE, THE MORTGAGEE SHALL NOT UNREASONABLY
32 REFUSE RELEASE OF THE TITLE BASED ON THE LOAN VALUE
33 THEREOF”

34

35 (9) Section 27 of Presidential Decree No. 957 is hereby amended to read as follows:
36 “SEC, 27. Other Charges. No owner or developer shall levy upon any lot

37 or unit buyer a fee for an alleged community benefit. Fees to finance services for

38 common comfort, security and s ted only by a properly

39 organized homeowners association OR CONDOMINIUM CORPORATION

40 and only with the consent of a majority of the lot or unit buyers actually residing in

41 the subdivision of condominium project.”

42

3 (h) Section 31 of Presidential Decree No. 957, as amended by Presidential Decree No. 1216,

44 insofar as donation of roads and open spaces to loc
45 to read as follows

overnment ate concemed, is hereby amended

46 ‘SEC. 31. Donation of Roads and Open Spaces to Local Government.
47 ‘The registered owner or developer of the subdivision or condominium project,
48 upon completion of the development of said project [may, at his option, convey by
49 way of donation] PURSUANT TO SECTION 20 HEREOF, SHALL
50 DONATE the toads, ALLEYS AND SIDEWALKS, and open spaces
5 RESERVED FOR SCHOOLS, PLACES OF WORSHIP, HOSPITALS,
52 HEALTH CENTERS, AND BARANGAY CENTERS AS
33 CONTEMPLATED IN PRESIDENTIAL DECREE NO. 1216 WHICH
34 ARE found within the project to the city or municipality wherein the project is

55 located AND IT SHALL BE MANDATORY FOR THE LOCAL.


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aoe]

GOVERNMENTS TO ACCEPT: PROVIDED, HOWEVER, THAT OPEN
SPACES AND AREAS RESERVED EXCLUSIVELY FOR PARKS,
PLAYGROUNDS, RECREATIONAL USES, CLUBHOUSES, AND
OTHER SIMILAR FACILITIES AND AMENITIES SHALL BE
DONATED TO THE HOMEOWNERS ASSOCIATION OR TO THE
CONDOMINIUM CORPORATION WITH THE CONSENT OF THE
CITY OR MUNICIPALITY CONCERNED. Upon acceptance of the donation
iy the city or municipality OR THE HOMEOWNERS ASSOCIATION OR
CONDOMINIUM concered f the area donated shall thereafter be
converted to any other purpose or purposes [unless after hearing, the proposed
conversion 3 approved by the Authority.|: PROVIDED, FURTHER, THAT
ROADS IN SUBDIVISIONS WHICH HAVE BECOME PUBLIC IN
CHARACTER ONE YEAR AFTER THE DECLARATION OF
ABANDONMENT BY THE AUTHORITY OF THE SUBDIVISION OR
CONDOMINIUM PROJECT WHERE THEY ARE LOCATED SHALL
1PSO FACTO BECOME PROPERTY OF THE LOCAL GOVERNMENT
UNIT THAT HAS JURISDICTION OVER SAID ROADS.

portic

(@ Section 38 of Presidential Decree No nded to read as follows:

C. 38, Administrative
x [ten] Fi

Authority may prescribe and
and pesos (P50,000.00) for
violauons of the provisions of ny rule or regulation thereunder
Fines sh: ble ro the Ay and enforceable thr ch weits of execution
in accordance with the provisions of the Rules of Cour

impose fines not exceed

Decree or

© pa

by amended to read as follows

o shall violate any of the provisions of
and/or any rule or regulation that may be issued pursuant to this
ING, BUT NOT LIMITED TO, FAILURE TO
DEVELOPMENT OF THE PROJECT WETHIN THE
TO SECTION 20 HEREOF,
| PURSUANT TO SEC
x AILURE ‘TO REFUND THE VIOLATION OF SECTION 23
HEREOF, FAILURE TO FOLLOW PUR z

G) Section 39 of Presidential Decree No,

‘SEC.39. Penalties. - Any pe
Decre
Decree, IN
COMPLET

SE OR THE
INSTALLMENT = PAYMENT =MADE _ IN TRUCTION
SPECIFICATIONS OR POOR WORKMANSHIP ULTING TO

SUBSTANDARD UNITS OR TO CON!
upon conviction, be punished by a fine
(P20,000.00) pesos and/or um
that in] SUPFER:

(A) ON THE FIRST OFFENSE, A FINE OF NOT MORE THAN
FIVE HUNDRED THOUSAND PESOS (P500,000.00) OR FIFTY
PERCENT (50%) OF THE TOTAL PURCHASE PRICE OF THE
PROPERTY AS STATED IN THE CONTRACT TO SELL OR DEED OF
SALE, INCLUDING ALL THE CHARGES IMPOSED BY THE
DEVELOPER WHICHEVER IS HIGHER AND/OR IMPRISONMENT
OF NOT MORE THAN FOUR (4) YEARS, AT THE DISCRETION OF
THE COURT

‘B) ON THE SECOND OFFENSE, A FINE OF SEVEN
HUNDRED FIFTY THOUSAND PESOS (P750,000.00) OR SEVENTY-
FIVE PERCENT (75%) OF THE TOTAL PURCHASE PRICE OF THE
PROPERTY AS STATED IN “THE CONTRACT TO SELL OR DEED OF
SALE, INCLUDING ALL THE CHARGES IMPOSED BY THE
DEVELOPER WHICHEVER IS HIGHER AND/OR IMPRISONMENT

RUCTION DEFECTS, shallj

not more than qwenty thousand

ot more

ten (10) year, Provided,

rs


OF NOT MORE THAN SEVEN (7) YEARS, AT THE DISCRETION OF
THE COURT

«(©C) ON THE THIRD OFFENSE, IN ADDITION TO A FINE OF
NOT MORE THAN ONE MILLION PESOS (?1,000,000.00) OR ONE
HUNDRED PERCENT (100%) OF THE TOTAL PURCHASE PRICE OF
THE PROPERTY AS STATED IN THE CONTRACT TO SELL OR
DEED OF SALE, INCLUDING ALL THE CHARGES IMPOSED BY
THE DEVELOPER WHICHEVER IS HIGHER AND/OR
IMPRISONMENT OF NOT MORE THAN TEN (10) YEARS, AT THE
DISCRETION OF THE COURT, THE BUSINESS PERMITS AND
LICENSES, IN THE CASE OF A BUSINESS ENTITY OR
ESTABLISHMENT, SHALL BE REVOKED OR CANCELLED.

“IF BY REASON OF ADVERTISEMENTS IN VIOLATION OF
THIS DECREE, A REAL ESTATE OR A CONDOMINIUM UNIT IS
SOLD, AN ADDITIONAL FINE OF NOT LESS THAN FIVE
HUNDRED THOUSAND PESOS (P500,000.00) SHALL BE IMPOSED
FOR EVERY UNIT SOLD.

SIN [the] case of corporations, partnerships, cooperatives, or associations,
the President, Manager or Administrator or the person who has charge of the
administration of the business shall be criminally responsible for any violation of
this Decree and/or the rules and regulations promulgated pursuant thereto.”

SEC. 4. Repealing Cla All laws, decrees, executive orders, proclamations, rules and
regulations, and other issuances, or part or parts thereof, which are inconsistent with the provisions
of this Act are hereby repealed or modified accordingly.

SEC. 5. Separability Clause, - If, for any reason, any provision of this Act is declared invalid or
unconstitutional, the remaining provisions not affected thereby shall continue to be in force and
effect

SEC. 6. Effetivity Clause. - This Act shall take effect fifteen (15) days after the completion of
its publication in the Oficial Gazerte or in at least fo (2) newspapers of general circulation.

Approved,