at iy,”
by
MY,

Republic of the Philippines
HOUSE OF REPRESENTATIVES

. “,
Quezon City RECEIVED

SEVENTEENTH CONGRESS,
First Regular Session

666

HOUSE BILL NO. ___

Introduced by Honorable 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 obligatiéns 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.

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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.

Eamest approvaLof this bill is hereby requested.

MICHAEL. ROMERO Ph.D. esa 'INEDA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

4666

HOUSE BILL NO."

Introduced by Honorable 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 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,

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
PD9S7.

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 fo the conditions and in accordance with the
procedure prescribed in Section 4 of the Condominium Act (R.A. No. 4726)

The owner of 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 after 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,