HOUSE "F REPRESENTATIVES
RECEINED

DATE:
rine ite
BY: since,

REGISTR ITION UNIT
BILLS AND fT ¥ SERVICI

REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No, 8.150

~ Introduced by MAGDALO Party-List Representative
HON. GARY C, ALEJAN

Explanatory Note

Presidential Decree No, 957 or the Subdivision and Condominium Buyers Protective Decree,
when it was originally conceptualized, was meant to protect subdivision and condominium
buyers from fraudulent and unscrupulous subdivision and condominium sellers and operators.
It somehow also had some positive effects on subdivision and condominium sellers, operators

and developers as PD 957 protected them as well

Through the years, PD 957 proved to be effective in protecting not only the subdivision and
condominium buyers but the sellers, operators, and developers as well. However, due to the
passage of time, certain provisions of PD 957 may prove to be obsolete while others need to

be clarified.

This bill seeks to amend certain provisions of PD 957 to enhance buyer's protection, and to

update and refine said decree to make it updated with today's pre-selling schemes

In view of the foregoing, immediate passage of this measure is earnestly sought

HON. YY G ALEJANO


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REPUBLIC OF THE PHILIPPINES.
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
t Regular Session

House Bill No. 3150

Introduced by MAGDALO Party-List Representative
_HON. GARY C. ALEJANO.

AN ACT
AMENDING THE SUBDIVISION AND CONDOMINIUM BUYERS’
PROTECTIVE DECREE

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

SECTION 1. Short Title. This Act shall be known as the “The
Subdivision and Condominium Buyers’ Protective Decree Amendments of
2016"

SECTION 2. Declaration of Policy. It is the policy of the State to
undertake, in cooperation with the private sector, a comprehensive and
continuing urban development. Towards this end, certain remedial reforms
ought to be introduced to the operational provisions of the Subdivision and
Condominium Buyers’ Protective Decree in order to strengthen and make the
same responsive and attuned to the needs of the present times.

SECTION 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
Buyers’ Protective Decree”, the following provisions are hereby amended

(a) Section 2, paragraph (n) of Presidential Decree No. 957 is hereby

amended to read as follows

“(n) (Authority. ~ “Authority”] BOARD. ~ ‘BOARD® shall
mean the [National Housing Authority) HOUSING AND LAND
USE REGULATORY BOARD (HLURB).”
The term “Authority” found elsewhere in the Decree is hereby
amended to read as “Board”

(b) Section 3 of Presidential Decree No, 957 is hereby amended to read

as follows



“Sec.3, [National Housing Authority, ~ The National Housing
Authority] HOUSING AND LAND USE REGULATORY BOARD
(HLURB). -— THE HOUSING AND LAND USE
REGULATORY BOARD shall have exclusive jurisdiction to
regulate the real estate trade and business in accordance with the
provisions of this Decree.”

(0) Section 5, paragraph 1 of Presidential Decree No. 957 is hereby
amended to read as follows:

“SECS. License to sell. — A CERTIFI

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.”
(d) Section 17, paragraph 1 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 full [,] shall
be registered by the seller in the Office of the Register of Deeds
of the province or city where the property is situated AT HIS
EXPENSE, IN CASES OF INSTALLMENT PAYMENTS,
THE CONTRACT TO SELL SHALL ALSO BE
REGISTERED BY THE DEVELOPER WITH THE
PROPER REGISTER OF DEEDS, THE EXPENSE FOR
WHICH SHALL BE SHARED PROPORTIONALLY BY
THE SELLER AND THE BUYER: PROVIDED,
HOWEVER, THAT IN CASE OF CANCELLATION OR
RESCISSION OF SAID CONTRACT TO SELL, SUCH
REGISTRATION OF CONTRACT TO SELL SHALL BE
CANCELED 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 SUE TO DEFAULT ON
THE PART OF THE BUYER, WITHOUT PREJUDICE
TO THE RIGHTS OF THE BUYER UNDER THE
REPUBLIC ACT NO. 6552, OTHERWISE KNOWN AS
THE ‘REALTY INSTALLMENT BUYER PROTECTION
ACT: PROVIDED, FINALLY, THAT THE BOARD
SHALL HAVE JURISDICTION OVER DISPUTES
BETWEEN THE BUYER AND THE SELLER

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REGARDING THE CANCELLATION OF THE
REGISTRATION OF 4 CONTRACT TO SELL.”

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

“SEC.18. Mortgages. — No mortgage on any unit or lot shall be
made by the owner or developer without prior written approval
of the [Authority] BOARD, Such approval shall not be granted
unless it is shown that the proceeds of the mortgage loan shall
be used for the development of the condominium or subdivision
project and effective measures have been provided to ensure
such utilization. The loan 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 OR CONTRACT TO SELL COVERING A LOT OR
UNIT SUBJECT OF A MORTGAGE SHALL INCLUDE A
PARTIAL RELEASE CLAUSE OR A PROVISION
GUARANTEEING THE IMMEDIATE RELEASE OF THE
TITLE TO SAID LOT OR UNIT UPON FULL PAYME
BY ITS BUYER. The buyer may {, at his option, pay his] OPT
TO PAY THE instalment for the lot or unit directly to the
mortgage indebtedness secured by the particular lot or unit being
paid for, with a view to enabling said buyer to obtain title over
the lot or unit promptly after fall payment thereof;]

“IN CASE A COMPLAINT IS FILED FOR THE
IMMEDIATE RELEASE OF THE TILE UPON FULL
PAYMENT OF A PROPERTY, THE MORTGAGE MUST
BE IMPLEADED AS AN INDISPENSABLE PARTY.”

(f) Section 20 of Presidential Decree No. 957 is hereby amended to
read a:

follows:

“SEC.20. Time of Completion. — Every owner or developer shall
construct and provide the facilities, _ improvements,
infrastructures and other forms of development, including water
supply, [and] lighting facilities, AND DEVELOPMENT OF
ROADS, AS PROVIDED FOR [which are offered and
indicated] in the approved subdivision or condominium plans.
brochures, prospectus, printed matters, letters or in any form of
advertisement, within [one year] EIGHTEEN (18) MONTHS
from the date of the issuance of the license for the subdivision or
condominium project or such other period of time as may be
fixed by the [Authority] BOARD[.]: PROVIDED, THAT IN
CASES OF FORTITIOUS EVENTS, THE BOARD SHALL
THEREAFTER, UPON EVALUATION OF THE NATURE
OF THE PROJECT AND THE CAPABILITY OF THE
DEVELOPER TO COMPLETE THE SAME,

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DETERMINE THE REASONABLE TIME WITHIN
WHICH THE PROJECT SHALL BE COMPLETED.

“IN THE EVENT THAT THE OWNER OR
DEVELOPER FAILS TO COMPLETE THE
DEVELOPMENT OF THE PROJECT AFTER THE
PERIOD OF EIGHTEEN (18) MONTHS AS MANDATED
ABOVE FOR ITS COMPLETION FROM THE DATE OF
THE ISSUANCE OF THE LICENSE FOR THE
SUBDIVISION OR CONDOMINIUM PROJECT, AND
UNLESS THE BOARD SETS ANOTHER TIME FOR
COMPLETION OWING TO THE CIRCUMSTANCES
STATED ABOVE, THE BOARD SHALL, UPON
WRITTEN NOTICE TO THE DEVELOPER OR
THROUGH PUBLICATION WHERE THE DEVELOPER
CANNOT BE LOCATED, DECLARE THE PROJECT
ABANDONED AND THE ROADS IN THE ABANDONED
PROJECT SHALL BECOME PUBLIC IN CHARACTER
ONE (1) YEAR FROM THE DECLARATION OF
ABANDONMENT OF THE PROJECT.”

(g) Section 22 of Presidential Decree No. 957 is hereby amended to
read as follows
“SEC. 22. Alteration of Plans. ~ No owner or developer shall
change or alter the roads, open spaces, infrastructures, facilities 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 advertisements,
without the permission of the [Authority] BOARD and the written
conformity or consent of the duly organized homeowners
association OR CONDOMINIUM CORPORATION, or in the
absence of the latter, by the majority of the [lot] buyers [in the] OF
subdivision LOTS OR CONDOMINIUM UNITS WHO HAVE
ALREADY PAID AT LEAST FLETY PERCENT (50%) OF
‘THE PURCHASE PRICE.”
(h) 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 title of the lot or unit to the buyer upon full payment of
the lot or unit[.J: PROVIDED, THAT WHERE THE OWNER
OR DEVELOPER PROPERLY PROCESSED AND
SUBMITTED THE DOCUMENTS TO THE GOVERNMENT
AGENCIES CONCERNED FOR THE ISSUANCE OF TITLE
AND CAN SHOW PROOF OF THE SAME AND THE DELAY
IN THE ISSUANCE OF TITLE IS NOT THE FAULT OF
SUCH OWNER OR DEVELOPER OR WHERE THE NON-

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ISSUANCE IS PURUANT TO A COURT ORDER, THE
OWNER OR DEVELOPER SHALL NOT BE HELD LIABLE
FOR SUCH DELAY OR NON-ISSUANCE OF TITLE.

No fee, except those required for the registration of the deed of
sale in the Registry of Deeds, shall be collected for the issuance of
such title. In the event a mortgage over the lot or unit is outstanding
at the time of the issuance of the title to the buyer, the owner or
developer shall redeem the mortgage or the corresponding portion
thereof [within six months] IMMEDIATELY from such issuance
in order that the title over any fully paid lot or unit may be secured
and delivered to the buyer in accordance herewith. IN SUCH A
CASE, THE MO! AGE SHALL NOT UNREASONABLY
REFUSE RELEASE OF THE TITLE BASED ON THE LOAN
VALUE THEREOF.”

Section 27 of Presidential Decree No, 957 is hereby amended to
read as follows:

“SEC. 27. Other Charges. - No owner or developer shall levy
upon any lot or UNIT buyer a fee for an alleged community benefit.
Fees to finance services for common comfort, security and
sanitation may be collected only by a properly organized
homeowners association OR CONDOMINIUM
CORPORATION and only with the consent of a majority of the lot
or unit buyers actually residing in the subdivision or condominium
project."

Section 31 of Presidential Decree No. 957, as amended by
Presidential Decree No. 1216, is hereby further amended to read as
follows:

“SEC. 31. Roads, Alleys, Sidewalks and Open Spaces. ~ The
owner [as] OR developer of a subdivision shall provide adequate
roads, alleys and sidewalks. For subdivision projects one (1) hectare
‘or more, the owner or developer shall reserve thirty percent (30%)
of the gross area for open space EXCLUSIVELY FOR ROADS,
ALLEYS, SIDEWALKS, SCHOOLS, PLACES OF WORSHIP,
HOSPITALS, H£ALTH CENTERS, BARANGAY CENTERS,
PARKS, PLAYGROUNDS, RECREATIONAL USE!
CLUBHOUSES, AND OTHER SIMILAR FACILITIES AND
AMENITIES, Such open space shall have the following standards
allocated exclusively for parks, playgrounds and recreational use:

a Xxx

b, Xxx

ce Xxx

‘These areas reserved for parks, playgrounds and recreational use
shall be |non-alienable public lands, and non-buildable]
EXCLUSIVELY FOR THEIR INTENDED PURPOSES. The

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plans of the subdivision project shall include tree planting on such
parts of the subdivision as may be designated by the [Authority]
BOARD.

Upon their completion PURSUANT TO SECTION 20
HEREOF AND as certified to by the [Authority] BOARD, the
roads, alleys, AND sidewalks [and playgrounds] shall, WITH THE
CONSENT OF THE HOMEOWNERS ASSOCIATION UPON
CONSULTATION, be donated by the owner or developer to the
city or municipality and it shall be mandatory for the local
governments to accept!) PROVIDED, T AT OPEN SPACES
RESERVED FOR SCHOOLS, PLACES OF WORSHIP,
HOSPITALS, HEALTH CENTERS, AND BARANGAY
CENTERS SHALL BE DONATED BY 1 OWNER OR
DEVELOPER TO THE CITY OR MUNICIPALITY AND IT
SHALL LIKEWISE BE MANDATORY FOR TH i
GOVERNMENTS TO ACCEPT: [p] Provided, however, [t{That
the OPEN SPACES RESERVED EXCLUSIVELY
land] playgrounds, [may] RECREATIONAL
CLUBHOUSES, AND OTHER SIMILAR FACILITIES AND
AMENITIES SHALL be donated to. the  [h]Homeowners
association of the project with the consent of the city or
municipality concerned. UPON ACCEPTANCE OF THE
DONATION BY TIJE CITY OR MUNICIPALITY OR THE
HOMEOWNERS ASSOCIATION CONCERNED, [N|NO
portion of the [parks and playgrounds] AREA donated thereafter
shall be converted to any other purpose or purposesf,:
PROVIDED, FURTHER, THAT ROADS IN SUBDIVISIONS
PUBLIC IN CHARACTER ONE (1)
ARATION OF ABANDONM.
THE SUBDIVISION PROJECT
RE THEY ARE LOCATED SHALL IPSO FACTO

BECOME THE PROPERTY OF THE LOCAL

GOVERNMENT UNIT THAT HAS JURISDICTION OVER

THE SAID ROADS."

k) Section 38 of Presidential Decree No. 957 is hereby amended to read.
as follows
“SEC. 38. Administrative Fines. - The [Authority] BOARD may
prescribe and impose A fine[s] not exceeding [ten] FIFTY thousand
pesos (P50,000.00) for EACH violation{s| OF ANY of the
provisions of this Decree or of any rule or regulation thereunder.

Fines shall be payable to the [Authority] BOARD and enforceable

through writs of execution in accordance with the provisions of the

Rules of Court."



1) Section 39 of Presidential Decree No. 957 is hereby amended to read
as follows:

“SEC. 39. 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 INCLUDING, BUT NOT
LIMITED TO, THE FAILURE TO COMPLETE THE
DEVELOPMENT OF THE PROJECT WITHIN THE
PRESCRIBED PERIOD PURSUANT TO SECTION 20
HEREOF, FAILURE TO REFUND THE PURCHASE PRICE
OR THE INSTALLMENT PAYMENT MADE __ IN
VIOLATION OF SECTION 23 HEREOF, FAILURE TO
DELIVER THE TITLE PURSUANT TO SECTION 25
HEREOF, FAILURE TO FOLLOW CONSTRUCTION
SPECIFICATIONS OR POOR | WORKMANSHIP
RESULTING TO SUBSTANDARD UNITS OR TO
CONSTRUCTION DEFECTS, shall, upon conviction, be
punished by a fine of not more than twenty thousand (P20,000.00)
pesos and/ or imprisonment of not more than ten years: Provided,
‘That in] SUFFER:

(A) ON THE FIRST OFFENSE, A FINE OF NOT MORE
THAN FIVE HUNDRED THOUSAND PESOS (PS500,000.00)

‘ CENT (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
MORE THAN FOUR (4) YEARS, AT THE
ETION OF THE COURT;

(B) ON THE SECOND OFFENSE, A FINE OF NOT
MORE THAN 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 OF NOT MORE THAN SEVEN (7)
YEARS, AT THE DISCRETION OF THE COURT; AND

"(C) ON THE THIRD OFFENSE, IN ADDITION TO A
FINE OF NOT MORE THAN ONE M ION PESOS
(P1,000,000.00) 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 BV
THE DEVELOPER WHICHEVER IS HIGHER AND/OR

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IMPRISONMENT OF NOT MORE TIAN 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.

SEC. 4, Repealing Clause. - 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. Effectivity Clause. - This Act shall take effect fifteen (15) days
after the completion of its publication in the Official Gazette or in at least two
(2) newspapers of general circulation

Approved,