Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

18TH CONGRESS
First Regular Session

HOUSE BILL No. 1174

Introduced by Representatives Michael L. Romero and
Enrico A. Pineda

EXPLANATORY NOTE

In the Republic of the Philippines It is the policy of the State to afford its
inhabitants the requirements of decent human settlement and to provide them
with ample opportunities for improving their quality of life.

Reports reveal that many real estate subdivision owners, developers, operators,
and/or sellers have reneged on their representations and obligations to provide
and maintain properly subdivision roads, drainage, sewerage, water systems,
lighting systems, and other similar basic requirements, thus endangering the
health and safety of home and lot buyers

Reports of alarming magnitude also show cases of swindling and fraudulent
manipulations perpetrated by unscrupulous subdivision and condominium
sellers and operators, such as failure to deliver titles to the buyers or titles free
from liens and encumbrances, and to pay real estate taxes, and fraudulent sales
of the same subdivision lots to different innocent purchasers for value

These acts not only undermine the land and housing program of the government
but also defeat the objectives of the New Society, particularly the promotion of
peace and order and the enhancement of the economic, social and moral
condition of the Filipino people.

This House Bill seeks to render it imperative that the real estate subdivision and
condominium businesses be closely supervised and regulated, and that penalties

be imposed on fraudulent practices and manipulations committed in connection
therewith


4
Earnest approval of this bill is hereby requested

J YZ . \)
J
MICHAEL L. ROMERO Ph.D. CO\A. PINEDA.

4



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

18TH CONGRESS
First Regular Session

HOUSE BILL No, 1174

Introduced by Representatives Michael L. Romero and
Enrico A. Pineda

AN ACT

RATIONALIZING THE SALE OF SUBDIVISION LOTS AND
CONDOMINIUMS, INCREASING ITS PENALTIES FOR
VIOLATIONS THEREOF, AND FOR OTHER PURPOSES

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

SECTION 1. DECLARATION OF POLICY - the National Housing
Authority (NHA) shall have exclusive jurisdiction to regulate the real estate trade

and business in accordance with the provisions of this Act

Administrative Fines. The NHA may prescribe and impose
fines not exceeding Thirty thousand (P30,000.00) pesos for
violations of the provisions of this Act or of any rule or regulation
there under. Fines shall be payable to the Authority and enforceable
through writs of execution in accordance with the provisions of the
Rules of Court.

Penalties. Any person who shall violate any of the provisions
of this Decree and/or any rule or regulation that may be issued
pursuant to this Decree shall, upon conviction, be punished by a
fine of not more than Sixty thousand (P60,000.00) pesos and/or


imprisonment of not more than ten (10) years: Provided, That in the
case of corporations, partnership, 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 Act and/or the rules and regulations
promulgated pursuant thereto PD957.

SECTION 2. IMPLEMENTING RULES AND REGULATIONS - The NHA
may, after such take-over, demand, collect and receive from the buyers the

installment payments due on the lots, which shall be utilized for the development
of the subdivision.

Thereupon, the Authority shall immediately cause to be published a notice of the
filing of the registration statement at the expense of the applicant-owner or
dealer, in two newspapers general circulation, one published in English and
another in Pilipino, once a week for two consecutive weeks, reciting that a
registration statement for the sale of subdivision lots or condominium units has
been filed in the National Housing Authority; that the aforesaid registration
statement, as well as the papers attached thereto, are open to inspection during
business hours by interested parties, under such regulations as the Authority
may impose; and that copies thereof shall be furnished to ar
payment of the proper fees.

y party upon

The subdivision project of the condominium project shall be deemed registered
upon completion of the above publication requirement. The fact of such
registration shall be evidenced by a registration certificate to be issued to the

applicant-owner or dealer.

The Authority shall issue the necessary standards, rules and regulations for the

effective implementation of the provisions of this Act.

Whenever a subdivision plan duly approved in accordance with Section 4 of
PD957, together with the corresponding owner's duplicate certificate of title, is

presented to the Register of Deeds for registration, the Register of Deeds shall


register the same in accordance with the provisions of the Land Registration Act,
as amended: Provided, however, that it there is a street, passageway or required
open space delineated on a complex subdivision plan hereafter approved and as
defined in this Decree, the Register of Deeds shall annotate on the new certificate
of title covering the street, passageway or open space, a memorandum to the
effect that except by way of donation in favor of a city or municipality, no portion
of any street, passageway, or open space so delineated on the plan shall be closed
or otherwise disposed of by the registered owner without the requisite approval
as provided under Section 22 of PD957.

SECTION 3. LIABILITIES OF CONTROLLERS - Every person who
directly or indirectly controls any person liable under any provision of this Act
or of any rule or regulation issued there under shall be liable jointly and severally
with and to the same extent as such controlled person unless the controlling
person acted in good faith and did not directly or indirectly induce the act or acts

constituting the violation or cause of action.

SECTION 4. REGISTRATION PROTOCOLS - The registered owner of a
parcel of land who wishes to convert the same into a subdivision project shall
submit his subdivision plan to the Authority which shall act upon and approve
the same, upon a finding that the plan complies with the Subdivision Standards
and Regulations enforceable at the time the plan is submitted.

The same procedure shall be followed in the case of a plan for a
condominium project except that, in addition, said Authority shall act upon and
approve the plan with respect to the building or buildings included in the
condominium project in accordance with the National Building Code (R.A. No.
6541).

The subdivision plan, as so approved, shall then be submitted to the Director of
Lands for approval in accordance with the procedure prescribed in Section 44 of
the Land Registration Act (Act No. 496, as amended by R.A. No. 440): Provided,


that it case of complex subdivision plans, court approval shall no longer be
required.

The condominium plan as likewise so approved, shall be submitted to the
Register of Deeds of the province or city in which the property lies and the same
shall be acted upon subject to the conditions and in accordance with the
procedure prescribed in Section 4 of the Condominium Act (R.A. No. 4726)

The owner or the real estate dealer interested in the sale of lots or units,
respectively, in such subdivision project or condominium project shall register
the project with the Authority by filing therewith a sworn registration statement
containing the following information:

(1) Name of the owner;

(2) The location of the owner's principal business office, and if
the owner is a non-resident Filipino, the name and address of

his agent or representative in the Philippines is authorized to
receive notice;

(3) The names and addresses of all the directors and officers
of the business firm, if the owner be a corporation,

association, trust, or other entity, and of all the partners, if it
be a partnership;

(4) The general character of the business actually transacted
or to be transacted by the owner; and

(5) A statement of the capitalization of the owner, including
the authorized and outstanding amounts of its capital stock
and the proportion thereof which is paid-up.
The person filing the registration statement shall pay the registration fees
prescribed therefor by the Authority.

Thereupon, the Authority shall immediately cause to be published a notice of the
filing of the registration statement at the expense of the applicant-owner or

dealer, in two newspapers general circulation, one published in English and


another in Pilipino, once a week for two consecutive weeks, reciting that a
registration statement for the sale of subdivision lots or condominium units has
been filed in the National Housing Authority; that the aforesaid registration
statement, as well as the papers attached thereto, are open to inspection during
business hours by interested parties, under such regulations as the Authority
may impose; and that copies thereof shall be furnished to any party upon
payment of the proper fees.

The subdivision project of the condominium project shall be deemed registered
upon completion of the above publication requirement. The fact of such
registration shall be evidenced by a registration certificate to be issued to the

applicant-owner or dealer.

SECTION 5. PERIODIC REPORTS - The NHA shall submit periodic
reports on its findings and make recommendations on actions to be taken by
Congress and Senate and the appropriate department, and in order to carry out

the objectives and mandates of this Act.

SECTION 6. AUTOMATIC REVIEW - Every three (3) years afier the
effectivity of this Act, an independent review panel composed of experts to be
appointed by the President shall review the policies and programs in the NHA

and shall make recommendations, based on its findings, to the President and to

both Houses of Congress.

SECTION 7. REPEALING CLAUSE. All laws, executive orders, issuances,
rules and regulations inconsistent with this Act are hereby amended, repealed

or modified accordingly.

SECTION 8. SEPARABILITY CLAUSE. If, for any reason or reasons, any
portion or provision of this Act shall be held unconstitutional or invalid, the

remaining provisions not affected thereby shall continue to be in full force and

effect.



SECTION 9. EFFECTIVITY CLAUSE. This Act shall take effect fifteen (15)

days after its publication in any newspaper of general circulation.

Approved,