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SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
,ifnllh 
(~fI,;""r tll,.~m.l .. t 
First Regular Sessiou 
) 
'14 
JAN 20 P 6 :23 
. SENA'2b71 
S. B. NO. __ 
'--' 
Introduced by Senator Maria Lourdes Nancy S. Binay 
EXPLANATORY NOTE 
Republic Act No. 6552, otherwise known as the "Realty Installment Buyer Protection Act", 
or more popularly the "Maceda Law", was approved on August 26, 1972 to protect real 
property owners from inequitable conditions imposed on sale transactions involving real 
estate purchase financed through installment basis. . 
Under the Maceda Law, buyers of real properties who have paid at least two (2) year 
installments but defaults in the payment of the remaining installments, and the contract is 
thereafter cancelled, are given the benefit of, among others, the refund of a percentage of the 
cash surrender value of the payments on the property, thus: 
"Section 3. In all transactions or contracts involving the sale or financing of 
real estate on installment payments, including residential condominium 
apartments but excluding industrial lots, commercial buildings and sales to 
tenants under Republic Act Numbered Thirty-eight hundred forty-four, as 
amended by Republic Act Numbered Sixty-three hundred eighty-nine, where 
the buyer has paid at least two years of installments, the buyer is entitled to 
the following rights in case M defaults in the payment of succeeding 
installments: 
XXX 
(b) If the contract is canceled. the seller shall refund to the 
buyer the cash surrender value of the payments on the property 
., 
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. equivalent to fifty per cent of the total payments made, and, 
after five years of installments, an additional five per cent 
every year ·but not to exceed ninety per cent of the total 
payments made: Provided, That the actual cancellation of the 
contract' shall take place after thirty days from receipt by the 
buyer of the notice of cancellation or the demand for rescission 
of the contract by a notarial act and upon full payment of the 
cash surrender value to the buyer. 
Down payments, deposits or options· on the contract shall be included in the 
computation of the total number of installment payments made." (Emphasis 
supplied.) 


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In 2009, it was reported that approximately eighty five per cent (85%) of complaints lodged 
with the Housing and Land Use Regulatory Board's 'legal office involve refund of installment 
payments. 
Although the Maceda Law expressly provides for the amounts to which the defaulting buyer 
is entitled - fifty per cent (50%) of total payments made and, after five years of i,nstallments, 
an. additional five per cent (5%). every year but .not to exceed ninety per cent (90%) of the 
total payments made - it is quite often that real property developers unilaterally impose 
deductions on refundable amount. 
Consequently, qualified buyers are deprived of receiving the full percentage of the amount of 
the refund to which they are, by express mandate of the law, entitled to receive. 
This bill proposes to clarifY the rights of .buyers of real property bought on installment basis 
under the Maceda Law by expressly prohibiting real estate developers from deducting from 
the value of the refund due to the buyer fees,)iquidated damages, penalties or other costs of 
whatever nature. Any provision in a contract to the contrary shall be void. 
In view of the foregoing, the passage of this bill is earnestly recommended. 
Senator 
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SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENAT,..ll:.. 
,ilHtnh> 
(~tf\;r, "f til' ,,,,,tOf¥ 
'14 
JAN 20 P6 :23 
S. B. NO. i::U71 
RECEIVED Bi': __ . t~ 
, Introduced by Senator Maria Lourdes Nancy S. Binay 
AN ACT CLARIFYING THE RIGHTS OF BUYERS ENTITLED TO RECENE REFUND 
UNDER REPUBLIC ACT NO. 6557, OTHERWISE KNOWN AS THE REALTY 
INSTALLMENT BUYER PROTECTION ACT, BY AMENDING SECTION 3 THEREOF, 
AND FOR OTB:ER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. 
Section 3 of Republic Act No. 6552, otherwise known as the Realty 
Installment Buyer Protection Act, is hereby amended to read as follows: 
"Section 3. In all transactions or contracts involving the sale or financing of 
real estate on installment payments, including residential condominium 
apartments but excluding industrial lots, commercial buildings and sales to 
tenants under Republic Act Numbered Thirty-eight hundred forty-four, as 
amended by Republic Act Numbered I Sixty-three hundred eighty-nine, where 
the buyer has paid at least two years -of installments, the buyer is entitled to 
the foJlowing rights in _ case he defaults in the payment of succeeding 
installments: 
(a) To pay, without additional interest, the unpaid installments due 
within the total grace period earned by him which is hereby fixed at 
the rate of one month grace period for everyone year of installment 
payments made: Provided, That this right shall be exercised by the 
buyer only once in every five 'years of the life of the contract and its 
extensions,' if any. 
(b) If the contract is canceled, the seller shaH refund to the buyer the 
cash surrender value of the payments on the property equivalent to 
fifty per cent of the total payments made, and, after five years of 
installments, an additional five per cent every year but not to exceed 
ninety per cent of the total payments made: Provided, That the actual 
cancellation of the contract shall take place after thirty days from 
receipt by the buyer of the notice of cancellation or the demand for 
rescission of the contract by a notarial act and upon full payment ofthe 
cash surrender value to the buyer. 
THE SELLER SHALL REF1JND THE FULL AMOUNT OF THE 


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CASH SURRENDER VALUE TO WHICH THE BUYER IS 
ENTITLED WITHOUT ANY DEDUCTION OF ANY FEES, 
,PENALTIES, CHARGED, OR OTHER COSTS OF WHATEVER 
. NATURE. ANY PROVISION TO THE CONTRARY SHALL BE 
VOID AND OF NO FORCE AND EFFECT. 
Down payments, deposits or options on the contract shall be included in the 
computation of the total number of installment payments made." 
SECTION 2. Implementing Rules and Regulations. The Housing and Land Use Regulatory 
Board, in coordination with the National Housing Authority, and the Housing and Urban 
Development Coordinating Council, and other relevant government agencies shall issue 
implementing rules and regulations within ninety (90) days from effectivity hereof, and such 
other rules and regUlations as may be necessary to carry out the purpose of this Act. 
SECTION 3. Repealing Clause. All laws, decrees, orders, rules and regulations, other 
issuances or parts thereof inconsistent with the provisions of this Act are hereby repealed or 
modified accordingly. 
SECTION 4. Effectivity Clause. This Act shall take effect fifteen (15) days after its complete 
.. 
publication in at least two (2) national newspapers of general circulation. 
Approved,