Okay class, before we dive into the full discussion of This happens when the buyer fails to pay

pay the The Maceda Law protects buyers against unfair and
the Maceda Law, let’s first familiarize ourselves with installment as required. For example, if your oppressive conditions. It makes sure that buyers are
some important terms that you will encounter in this payment is due every 30th of the month but you given rights, such as:
topic. didn’t pay, you are in default. This is a serious matter
because it can lead to cancellation of your contract if A grace period to pay when they miss an installment.
👉 First, Real Property. not resolved. A refund of part of their payments if the contract is
When we say real property, we are talking about So again, remember these four terms: Real Property, cancelled after a certain number of years.
things like land, houses, buildings, or even roads. Installment, Grace Period, and Default. They will
These are things that you cannot move or separate In short, this law is the safety net for ordinary people
guide us as we go deeper into understanding the who just want to fulfill their dream of owning real
from the land without damaging them. For example, rights of buyers under the Maceda Law.”
you cannot remove a road or a building without property, while making sure developers also follow
destroying it. That’s why it is called real property—it Now let’s officially talk about the Maceda Law, also fair practices.”
is permanently attached to the land. known as Republic Act 6552 or the Realty “Now that we know the purpose of the Maceda Law,
Installment Buyer Act. let’s talk about its coverage—in other words, saan
👉 Second, Installment.
(3rd slide) ba talaga ito applicable?
Installment means paying in parts. Instead of paying
the full price of a house or a lot in one go, the buyer 👉 So, what is this law all about? 4th
is given a certain period to complete the payment. 👉 The Maceda Law applies specifically to the
During this period, the price is divided into smaller The Maceda Law was passed in 1972, and its main
purpose is simple: to protect buyers of real estate on installment sale of residential real properties.
amounts, and the buyer pays them at regular
intervals, like monthly. Once the buyer completes all installment payments. So, if you are buying a house, a lot, or a
these payments, the obligation is considered Back then—and even today—many Filipinos dream condominium unit through installment payments,
fulfilled. But of course, the buyer must pay on time, of owning land, houses, or condos, but since most then you are protected by this law.
according to the agreed schedule. cannot pay in full, they enter into installment But, take note—it does not cover all types of real
👉 Third, Grace Period. contracts with real estate developers. The problem property sales.
was, before this law existed, if the buyer missed
This is like a second chance. The grace period is the payments, the developers could easily cancel the There are exclusions:
extra time given to the buyer to pay even if the due contract and take back the property without
1. Industrial lots – meaning land used for factories,
date has already passed. And the best part is— returning any of the money that the buyer had
warehouses, or large-scale production.
during this grace period, the buyer will not be already paid. Imagine paying for 5 years, then
penalized. So, it’s basically an extension without missing a few months, and suddenly all your 2. Commercial buildings – like malls, office towers, or
added charges. payments are gone—napaka-unfair, right? spaces intended for business purposes.
👉 Lastly, Default. 👉 That’s why this law was made.
3. Sales to tenants under Agrarian Reform Laws – For example, if you’ve paid for 4 years already, you Now what if you’ve only paid for less than 2 years?
because those are already governed by a different get 4 months grace period to settle your unpaid Don’t worry, you still have some protection, but not
law, specifically RA 3844 as amended by RA 6389. dues. as strong as Scenario A.

👉 Another important note: And the good part? No interest will be charged for 1. Grace Period – You are given not less than 60 days
payments made during the grace period. from the due date to pay your missed installment.
The Maceda Law only applies when the property is
sold or financed through installment payments. If But take note, this grace period privilege can only be 2. Cancellation of Contract – The seller can only
you buy a property in full payment, cash basis, or used once every 5 years of the contract. cancel after:
through bank loans not covered by installment
contracts, then the Maceda Law does not apply. 2. Refund or Cash Surrender Value (CSV) – If the The 60-day grace period has expired, AND
contract gets cancelled, you are entitled to a refund
“Now let’s get into the heart of the Maceda Law: the of 50% of all your total payments. A 30-day notarial notice of cancellation has been
rights of the buyer when default happens. given to you.
If you’ve been paying for more than 5 years, an
next additional 5% refund per year will be added, but it So even if you’ve only been paying for a short time,
cannot exceed 90% of total payments. you are still given protection—meaning the seller
There are two possible scenarios under the law: cannot immediately take away your property just
Example: If you’ve been paying for 7 years, you get because you missed a single due date.”
👉 Scenario A – The buyer has already paid at least 50% + 10% = 60% refund.
two years of installment but later on defaults in the “So as we can see, the Maceda Law provides
succeeding payments. 3. Cancellation of Contract – This can only be valid different levels of protection depending on how long
after: the buyer has already been paying."
👉 Scenario B – The buyer has paid less than two
years of installment and then defaults. First, the seller issues a 30-day notarial notice of
cancellation, AND
Let’s break them down one by one.
Second, the seller pays you your refund or Cash
✅ Scenario A: Buyer has paid at least 2 years Surrender Value.
If you have already been paying for at least two Also, don’t forget: down payments, deposits, or
years, the law is very generous with your rights. options on the contract are counted as part of your uexample
1. Grace Period – You are given a one-month grace payments.
period for every one year of installment you have Let’s say B bought a residential lot from S in
✅ Scenario B: Buyer has paid less than 2 years installment.
already paid.
The terms are:
Downpayment: ₱100,000 Since this is less than 2 years, this falls under 👉 First: The Right to Assign or Reinstate the Contract
Scenario B.
Monthly installment: ₱10,000 If the buyer cannot continue paying, he or she has
Right #1: Grace period of 60 days from the due date. the right to sell or transfer their rights over the
Payment period: 10 years property to another person. This is called an
Right #2: Cancellation can only happen after the 60 assignment of rights.
Now, let’s look at three different situations: days, and only if the seller gives a 30-day notarial
👉 Question 1: Suppose B failed to pay a month after notice. Or, if the buyer wants to continue, he or she may
paying 2 years of installment. reinstate the contract by simply updating their
Note: No refund rights yet because it’s less than 2 account—meaning paying the missed installments.
After 2 years, B has already paid ₱240,000 in years.
installments, plus the ₱100,000 downpayment = But take note: This can only be done during the
--- grace period and before the actual cancellation of
₱340,000 total.
👉 Question 3: Suppose B failed to pay a month after the contract.
Since B has already paid at least 2 years, this falls paying 8 years of installment.
under Scenario A. Example: If Juan missed his payments but is still
After 8 years, B has paid ₱960,000 in installments, within the grace period, he can either catch up on
Right #1: Grace period of 2 months (1 month for plus ₱100,000 downpayment = ₱1,060,000 total. payments or assign the property to his cousin Maria,
every year paid). who will then continue the contract.
Since 8 years is more than 2 years, this again falls
Right #2: If the contract is cancelled, B is entitled to a under Scenario A.
refund of 50% of total payments = ₱170,000.
Right #1: Grace period of 8 months (1 month per
Right #3: Cancellation is only valid if there is a 30-day year paid).
notarial notice and refund given first. 👉 Second: The Right to Advance Payment without
Right #2: Refund entitlement: 50% + (5% for each Interest
year after 5 years). The buyer also has the right to pay in advance—
That’s 50% + 15% = 65% refund of total payments. either part of the installments or even the entire
unpaid balance—without any interest or penalty.
So B would get back ₱689,000 if the contract is
cancelled. This is good because it allows the buyer to fully
👉 Question 2: Suppose B failed to pay a month after
settle the property sooner, and once that happens,
paying 1 year of installment. Right #3: Cancellation only valid with 30-day notarial the full payment must be annotated in the
After 1 year, B has paid ₱120,000 in installments, notice AND refund. property’s title.
plus the ₱100,000 downpayment = ₱220,000 total. hhshahha Example: Ana is supposed to pay for 10 years, but
after 5 years, she suddenly has enough money to
fully pay the balance. She can pay everything in one 6. Seller/Developer – The person or company selling 16. Assignment of Rights – Transferring your right to
go, and her ownership will be recorded officially in the property. buy the property to another person.
the land title.
7. Cash Surrender Value (CSV) – The refund or 17. Reinstate – Restoring the contract by updating
--- percentage of payments returned to the buyer if the payments during the grace period.
contract is cancelled.
👉 Important note: 18. Advance Payment – Paying installments or the
8. Downpayment – Initial amount paid upfront full balance ahead of schedule, without extra
Any deed of sale or assignment must be done before starting installment payments. interest.
through a notarial act to make it legally binding.
9. Cancellation – Termination of the installment 19. Annotation of Title – Officially recording full
So these additional rights give the buyer more contract by the seller, usually after default and payment or ownership in the property’s land title.
flexibility—either to transfer, to catch up, or to fully proper notice.
pay without extra charges.” 20. Obligation – The buyer’s responsibility to pay the
10. Notarial Notice – A formal written notice issued installments according to the contract.
through a notary public, required before
cancellation. 21. Extension of Contract – An agreed continuation
of the contract, where buyer’s rights like grace
11. Refund – Money given back to the buyer after period may still apply.
contract cancellation, depending on how long
payments were made.

1. Real Property – Land and anything permanently 12. Residential Property – A house, lot, or condo
attached to it, like houses, buildings, or roads. intended for living, covered by the Maceda Law. 22. Oppressive Conditions – Unfair rules or terms in
2. Installment – A method of paying for property in 13. Industrial Lot – Land used for factories, the contract that heavily favor the seller and burden
smaller, scheduled payments over a period of time. warehouses, or industrial purposes (not covered by the buyer.
the Maceda Law). 23. Magna Carta (in context) – A nickname for the
3. Grace Period – Extra time given to pay without
penalty after the due date. 14. Commercial Building – Property used for Maceda Law, symbolizing strong protection of
business (malls, offices, shops) not covered by the buyers’ rights.
4. Default – Failure to pay the required installment
Maceda Law. 24. Installment Sale – A contract of sale where the
on time.
15. Agrarian Reform Laws – Special laws (like RA purchase price is paid in parts over a period of time.
5. Buyer – The person purchasing the property in
3844 and RA 6389) that govern tenant land 25. Financing – A payment method where the buyer
installments.
ownership, separate from the Maceda Law. uses credit or installment to pay instead of full cash.