Legal Advice on Real Estate Installment Payments
Dear PAO,
In January 2021, I bought a house and lot from a developer. Since then, I have been paying my monthly amortization amounting to Twenty-one Thousand Pesos (P21,000.00). Over the past three years, I have been making payments for the property, but the same has not been continuous since I failed to pay the amortization for a couple of months when I got laid off from work. The total amount that I have paid is Three Hundred Seventy-eight Thousand Pesos (P378,000.00). Now, I lost my job again, and I can’t afford to pay anymore. Am I entitled to a refund of my payments?
Marc
Legal Rights Under R.A. 6552
Sections 3 and 4 of Republic Act (R.A.) 6552, known as the “Realty Installment Buyer Act or Maceda Law,” provide specific rights for buyers in case of default in payment of succeeding installments.
Rights of the Buyer
- The buyer can pay unpaid installments within a grace period based on the total years of payments made.
- If the contract is canceled, the seller must refund a percentage of the total payments made.
Legal Interpretation
In the case of Orbe vs. Filinvest Land, the Supreme Court clarified that the term “at least two years of installments” refers to both the time and value of payments made.
Based on the law and jurisprudence, a buyer who has paid at least two years’ worth of installments can avail the grace period for payment. However, the refund entitlement is based on the total amount paid, not just the length of payment period.
In your case, although you have paid for more than two years, the total amount paid is less than the required equivalent. Therefore, you are entitled to pay the past due amortization within the grace period but not eligible for a refund.
We hope this clarifies your concerns. Please note that our advice is based on the information provided. Different circumstances may lead to different outcomes.
