(Recto Law) (Sale of immovables)

Art. 1484. In a contract of sale of personal property the price of which is payable in installments, the vendor may
exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay;
(2) Cancel the sale, should the vendee's failure to pay cover two or mo
re installments;
(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee's
failure to pay cover two or more installments. In this case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void.
(1454-A-a)
Art. 1485. The preceding article shall be applied to contracts purporting to be leases of personal property with
option to buy, when the lessor has deprived the lessee of the possession or enjoyment of the thing. (1454-A-a)
Art. 1486. In the case referred to in two preceding articles, a stipulation that the installments or rents paid shall not
be returned to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the
circumstances. (n)
(sale of immovables)
anticipatory breach

Art. 1591. Should the vendor have reasonable grounds to fear the loss of immovable property sold and its price,
he may immediately sue for the rescission of the sale.
Should such ground not exist, the provisions of Article 1191 shall be observed. (1503)
PD 957 REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS, PROVIDING PENALTIES
FOR VIOLATIONS THEREOF

Section 2. Definition of Terms When used in this Decree, the following terms shall, unless the context otherwise
indicates, have the following respective meanings:
(a) Person. "Person" shall mean a natural or a juridical person. A juridical person refers to a business
firm whether a corporation, partnership, cooperative or associations or a single proprietorship.
(b) Sale or sell. "Sale" or "sell" shall include every disposition, or attempt to dispose, for a valuable
consideration, of a subdivision lot, including the building and other improvements thereof, if any, in a
subdivision project or a condominium unit in a condominium project. "Sale" and "sell" shall also include a
contract to sell, a contract of purchase and sale, an exchange, an attempt to sell, an option of sale or
purchase, a solicitation of a sale, or an offer to sell, directly or by an agent, or by a circular, letter,
advertisement or otherwise.
A privilege given to a member of a cooperative, corporation, partnership, or any association and/or the
issuance of a certificate or receipt evidencing or giving the right of participation in, or right to, any land in
consideration of payment of the membership fee or dues, shall be deemed a sale within the meaning of
this definition.

(c) Buy and purchase. The "buy" and "purchase" shall include any contract to buy, purchase, or
otherwise acquire for a valuable consideration a subdivision lot, including the building and other
improvements, if any, in a subdivision project or a condominium unit in a condominium project.
(d) Subdivision project. "Subdivision project" shall mean a tract or a parcel of land registered under Act
No. 496 which is partitioned primarily for residential purposes into individual lots with or without
improvements thereon, and offered to the public for sale, in cash or in installment terms. It shall include
all residential, commercial, industrial and recreational areas as well as open spaces and other
community and public areas in the project.
(e) Subdivision lot. "Subdivision lot" shall mean any of the lots, whether residential, commercial,
industrial, or recreational, in a subdivision project.
(f) Complex subdivision plan. "Complex subdivision plan" shall mean a subdivision plan of a registered
land wherein a street, passageway or open space is delineated on the plan.
(g) Condominium project. "Condominium project" shall mean the entire parcel of real property divided or
to be divided primarily for residential purposes into condominium units, including all structures thereon.
(h) Condominium unit. "Condominium unit" shall mean a part of the condominium project intended for
any type of independent use or ownership, including one or more rooms or spaces located in one or
more floors (or part of parts of floors) in a building or buildings and such accessories as may be
appended thereto.
(i) Owner. "Owner" shall refer to the registered owner of the land subject of a subdivision or a
condominium project.
(j) Developer. "Developer" shall mean the person who develops or improves the subdivision project or
condominium project for and in behalf of the owner thereof.
(k) Dealer. "Dealer" shall mean any person directly engaged as principal in the business of buying,
selling or exchanging real estate whether on a full-time or part-time basis.
(l) Broker. "Broker" shall mean any person who, for commission or other compensation, undertakes to
sell or negotiate the sale of a real estate belonging to another.
(m) Salesman. "Salesman" shall refer to the person regularly employed by a broker to perform, for and
in his behalf, any or all functions of a real estate broker.
(n) Authority. "Authority" shall mean the National Housing Authority.
Section 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 purchase price is 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.
Whenever a subdivision plan duly approved in accordance with Section 4 hereof, 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 this Decree.

Section 18. Mortgages. No mortgage on any unit or lot shall be made by the owner or developer without prior
written approval of the Authority. 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
buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the
payments to the corresponding 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 full payment thereto;
Section 23. Non-Forfeiture of Payments. No installment payment made by a buyer in a subdivision or
condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer
when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the
owner or developer to develop the subdivision or condominium project according to the approved plans and within
the time limit for complying with the same. Such buyer may, at his option, be reimbursed the total amount paid
including amortization interests but excluding delinquency interests, with interest thereon at the legal rate.
Section 24. Failure to pay installments. The rights of the buyer in the event of this failure to pay the installments
due for reasons other than the failure of the owner or developer to develop the project shall be governed by
Republic Act No. 6552.
Where the transaction or contract was entered into prior to the effectivity of Republic Act No. 6552 on August 26,
1972, the defaulting buyer shall be entitled to the corresponding refund based on the installments paid after the
effectivity of the law in the absence of any provision in the contract to the contrary.
Section 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. 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 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.
(Maceda Law) sale of immovables on installment
rescission on sale on non residential realty on installment

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with Articles 1385 and 1388 and the Mortgage Law. (1124)

Art. 1592. In the sale of immovable property, even though it may have been stipulated that upon failure to pay the
price at the time agreed upon the rescission of the contract shall of right take place, the vendee may pay, even
after the expiration of the period, as long as no demand for rescission of the contract has been made upon him
either judicially or by a notarial act. After the demand, the court may not grant him a new term. (1504a)
Prescription
Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:
(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment. (n)

(remedies of the buyer)

SALE OF MOVABLES
Specific performance

Art. 1598. Where the seller has broken a contract to deliver specific or ascertained goods, a court may, on the
application of the buyer, direct that the contract shall be performed specifically, without giving the seller the option
of retaining the goods on payment of damages. The judgment or decree may be unconditional, or upon such terms
and conditions as to damages, payment of the price and otherwise, as the court may deem just. (n)
Art. 1599. Where there is a breach of warranty by the seller, the buyer may, at his election:
(1) Accept or keep the goods and set up against the seller, the breach of warranty by way of recoupment
in diminution or extinction of the price;
(2) Accept or keep the goods and maintain an action against the seller for damages for the breach of
warranty;
(3) Refuse to accept the goods, and maintain an action against the seller for damages for the breach of
warranty;
(4) Rescind the contract of sale and refuse to receive the goods or if the goods have already been
received, return them or offer to return them to the seller and recover the price or any part thereof which
has
been
paid.
When the buyer has claimed and been granted a remedy in anyone of these ways, no other remedy can
thereafter be granted, without prejudice to the provisions of the second paragraph of Article 1191.
Where the goods have been delivered to the buyer, he cannot rescind the sale if he knew of the breach
of warranty when he accepted the goods without protest, or if he fails to notify the seller within a
reasonable time of the election to rescind, or if he fails to return or to offer to return the goods to the
seller in substantially as good condition as they were in at the time the ownership was transferred to the
buyer. But if deterioration or injury of the goods is due to the breach or warranty, such deterioration or
injury shall not prevent the buyer from returning or offering to return the goods to the seller and
rescinding the sale.
Where the buyer is entitled to rescind the sale and elects to do so, he shall cease to be liable for the
price upon returning or offering to return the goods. If the price or any part thereof has already been
paid, the seller shall be liable to repay so much thereof as has been paid, concurrently with the return of
the goods, or immediately after an offer to return the goods in exchange for repayment of the price.
Where the buyer is entitled to rescind the sale and elects to do so, if the seller refuses to accept an offer
of the buyer to return the goods, the buyer shall thereafter be deemed to hold the goods as bailee for the
seller, but subject to a lien to secure payment of any portion of the price which has been paid, and with
the remedies for the enforcement of such lien allowed to an unpaid seller by Article 1526.
(5) In the case of breach of warranty of quality, such loss, in the absence of special circumstances
showing proximate damage of a greater amount, is the difference between the value of the goods at the
time of delivery to the buyer and the value they would have had if they had answered to the warranty. (n)

breach of warranty
see 1599
Art. 1571. Actions arising from the provisions of the preceding ten articles shall be barred after six months, from
the delivery of the thing sold. (1490)
Rescission
See 1599
SALE OF IMMOVABLES
PD 957 SEE 23 and 24
See 1191
Suspension of payment
Art. 1590. Should the vendee be disturbed in the possession or ownership of the thing acquired, or should he have
reasonable grounds to fear such disturbance, by a vindicatory action or a foreclosure of mortgage, he may
suspend the payment of the price until the vendor has caused the disturbance or danger to cease, unless the
latter gives security for the return of the price in a proper case, or it has been stipulated that, notwithstanding any
such contingency, the vendee shall be bound to make the payment. A mere act of trespass shall not authorize the
suspension of the payment of the price. (1502a)
RA 6552 MACEDA LAW

REPUBLIC ACT No. 6552

AN ACT TO PROVIDE PROTECTION TO BUYERS OF REAL ESTATE ON INSTALLMENT PAYMENTS. (Rep. Act
No. 6552)
Section 1. This Act shall be known as the "Realty Installment Buyer Act."
Section 2. It is hereby declared a public policy to protect buyers of real estate on installment payments against
onerous and oppressive conditions.
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 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 every one 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 shall 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 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.lawphi1
Section 4. In case where less than two years of installments were paid, the seller shall give the buyer a grace
period of not less than sixty days from the date the installment became due.
If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the
contract 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.
Section 5. Under Section 3 and 4, the buyer shall have the right to sell his rights or assign the same to another
person or to reinstate the contract by updating the account during the grace period and before actual cancellation
of the contract. The deed of sale or assignment shall be done by notarial act.
Section 6. The buyer shall have the right to pay in advance any installment or the full unpaid balance of the
purchase price any time without interest and to have such full payment of the purchase price annotated in the
certificate of title covering the property.
Section 7. Any stipulation in any contract hereafter entered into contrary to the provisions of Sections 3, 4, 5 and
6, shall be null and void.
Section 8. If any provision of this Act is held invalid or unconstitutional, no other provision shall be affected
thereby.lawphi1
Section 9. This Act shall take effect upon its approval.
Approved: August 26, 1972.