Quick answer

A buyer of a preselling condominium in the Philippines is protected mainly by Presidential Decree No. 957, the Subdivision and Condominium Buyers’ Protective Decree. Before selling condominium units to the public, the project generally must be registered and covered by a valid License to Sell issued by the Department of Human Settlements and Urban Development (DHSUD). A development permit, building permit, reservation form, or attractive showroom is not a substitute for that license.

The developer must deliver the project, unit, facilities, and improvements according to the approved plans and representations, within the completion period approved by DHSUD. If the developer fails to develop the project as required, a buyer who gives due notice may stop paying and seek reimbursement under Section 23 of P.D. 957. If the buyer—not the developer—is the one who cannot continue paying, cancellation and refund rights are generally governed by the Realty Installment Buyer Act or Maceda Law, subject to its coverage and conditions.

Do not assume that every reservation fee is automatically refundable, every delay automatically produces a full refund, or every change of mind creates a cooling-off right. The contract, payment history, License to Sell, approved completion date, cause of cancellation, and evidence of the developer’s breach all matter.

What “preselling” means

A preselling unit is marketed or sold before the condominium project or the particular unit is completed and ready for occupancy. Buyers commonly pay a reservation fee, followed by a down payment or monthly installments, while construction is ongoing.

This arrangement can make units more affordable, but the buyer is largely relying on future performance. Important features—such as the floor plan, usable area, parking allocation, amenities, turnover date, finishes, view, and payment schedule—must therefore be verified in documents, not merely accepted from a salesperson’s verbal assurances.

Check these documents before paying

1. Certificate of Registration and License to Sell

Ask for copies showing:

the project’s registered name and exact location;
the developer or project owner;
the License to Sell number and issue date;
the tower, building, phase, floors, or units actually covered;
the approved project-completion period; and
any conditions, amendments, suspensions, or extensions.

Validate the information directly with the appropriate DHSUD Regional Office or through the DHSUD’s official list of projects with a License to Sell. A license for a different tower, phase, or project should not be treated as authority to sell the unit being offered.

P.D. 957 recognizes limited exempt transactions, including certain resales by an original purchaser and sales by a mortgagee made in the ordinary course of liquidating a bona fide debt. If the seller claims an exemption, ask for documents establishing it and obtain independent legal advice before paying.

2. Title to the project land

Obtain a recent certified true copy of the land title from the Registry of Deeds. Check:

whether the registered owner matches the project documents;
whether the developer has authority to develop and sell;
mortgages, liens, adverse claims, notices of levy, or pending cases;
annotations affecting access, use, or development; and
whether the title details correspond to the advertised site.

A clean photocopy supplied by a salesperson is not equivalent to a recently issued certified copy.

3. Approved plans and permits

Request the approved condominium plan, development permit, building permit, and documents identifying the approved project specifications. Compare them with the brochure, model unit, reservation agreement, and Contract to Sell.

Confirm in writing:

unit number, floor, orientation, and floor area;
whether the stated area includes walls, balconies, or other spaces;
parking or storage rights;
finishing specifications;
included appliances or fixtures;
amenities and common areas;
density or number of units;
target turnover and contractual grace periods; and
circumstances in which the developer claims it may modify the project.

4. Master deed and condominium rules

Review the master deed, declaration of restrictions, house rules, and proposed condominium-corporation arrangements. These documents may regulate leasing, pets, renovations, short-term stays, parking, commercial use, voting, and assessments.

Ownership and administration of condominium units and common areas are also governed by the Condominium Act, Republic Act No. 4726. Ask how voting rights and interests in common areas are allocated and what happens to the condominium corporation after turnover.

5. Complete price and payment schedule

Require a written computation covering:

reservation fee and down payment;
monthly installments and any balloon payment;
interest, if applicable;
taxes and registration expenses allocated by the contract;
turnover, utility-connection, association, documentation, and other charges;
penalties for late payment;
bank-financing assumptions; and
consequences if the housing loan is not approved.

A bank’s rejection of a loan application does not necessarily cancel the Contract to Sell or create an automatic refund. Any financing condition should appear clearly in the signed agreement.

6. Authority of the seller

Verify that the broker or salesperson is authorized by the developer and properly licensed or accredited where the law requires it. Pay only through an official developer channel and insist on an official receipt bearing the correct project and unit details.

Rights during construction

Right to truthful advertising

Under Section 19 of P.D. 957, condominium advertising must reflect the real facts and must not mislead or deceive. Facilities, improvements, infrastructure, and other development represented or promised in brochures, advertisements, and sales materials become enforceable sales warranties against the developer and its agents.

Preserve screenshots, videos, brochures, price lists, floor plans, emails, chat messages, presentation decks, and recordings lawfully obtained. Online listings can later be changed or removed.

Right to development according to approved plans and representations

The developer must construct the facilities and improvements shown in the approved plans and promised in its advertising within the period fixed by law or DHSUD. For current projects, the operational date to verify is the completion date or period stated in the License to Sell and any officially approved extension—not simply the salesperson’s estimated turnover month.

Material differences should be documented. Whether a change is legally permissible depends on the approved plans, regulatory approval, the contract, the nature of the change, and any consent required by law.

Protection when the project or unit is mortgaged

Section 18 of P.D. 957 requires prior regulatory approval before the developer mortgages a unit or lot. The buyer must be notified before release of the loan when the purchased property is covered by the mortgage. The law also allows the buyer, at the buyer’s option, to pay installments directly to the mortgagee for application to the corresponding mortgage debt.

Ask DHSUD and the Registry of Deeds whether the project is mortgaged and whether the required approval was obtained. Do not rely solely on a contract clause stating that the buyer accepts all existing or future mortgages.

Registration of the sale documents

Section 17 requires the seller to register contracts to sell, deeds of sale, and similar instruments concerning condominium units with the proper Registry of Deeds, whether or not the price has been fully paid. If registration has not occurred, ask the developer for proof of filing or registration and a written explanation.

Protection against collection of real-property tax before ownership passes

Under Section 26 of P.D. 957, real-property tax and assessments are generally for the developer’s account while title has not passed to the buyer. An exception applies when the buyer has actually taken possession and occupied the unit; liability to the developer then begins in the year following possession and occupancy.

This rule is distinct from contractually allocated transfer taxes, documentary stamp tax, registration expenses, and condominium dues.

If the developer delays or fails to develop the project

Section 23 of P.D. 957 applies when the buyer stops paying because the developer failed to develop the condominium according to the approved plans and within the applicable completion period.

The buyer should first give the developer due notice. A careful written notice should:

identify the project, tower, unit, contract, and buyer;
state the promised and officially approved completion dates;
describe the unfinished work or material deviations;
attach supporting documents and dated photographs;
state that further payments are being withheld because of the developer’s failure under P.D. 957;
demand completion, a definite response, or reimbursement; and
reserve the buyer’s legal rights.

Use a delivery method that creates reliable proof of receipt. Address the notice to the developer’s official business address and any contractually designated notice address.

If Section 23 is established, installment payments may not be forfeited. The buyer may choose reimbursement of the total amount paid, including amortization interest but excluding delinquency interest, plus interest at the legal rate. In Fil-Estate Properties, Inc. v. Spouses Go, the Supreme Court enforced reimbursement where the developer failed to complete the preselling condominium as required.

A buyer should not simply stop paying without documenting the developer’s breach and serving notice. If the delay is disputed, the developer may characterize the buyer as the party in default. An approved extension, a contract provision, the actual construction status, and the relationship between the delayed project and the purchased unit may affect the result.

If the buyer wants to cancel for personal or financial reasons

When cancellation results from the buyer’s own default rather than the developer’s failure to develop, Section 24 of P.D. 957 refers the parties to the Maceda Law.

When at least two years of installments have been paid

For a covered residential condominium purchase, the buyer is entitled to:

a grace period of one month for every year of installment payments made, without additional interest on the overdue installments, exercisable only once every five years during the life of the contract and its extensions; and
if the contract is canceled, a cash surrender value equal to 50% of total payments made, increasing by 5% for each year after five years of installments, but never exceeding 90%.

Down payments, deposits, and options on the contract are included when computing installment payments under the law.

Cancellation does not become effective merely because the developer sends an ordinary email or account statement. It takes effect only after:

the buyer receives a notice of cancellation or demand for rescission by notarial act;
30 days pass from receipt; and
the seller fully pays the required cash surrender value.

When less than two years of installments have been paid

The buyer must receive a grace period of at least 60 days from the date the installment became due. If the overdue amount remains unpaid after that period, the seller may cancel the contract only after 30 days from the buyer’s receipt of a notice of cancellation or demand for rescission by notarial act.

The statutory 50% cash surrender value generally applies only after at least two years of installment payments. A contract or voluntary developer policy may provide a more favorable refund.

Assignment, reinstatement, and advance payment

During the applicable grace period and before actual cancellation, a covered buyer may:

reinstate the contract by updating the account; or
sell or assign the buyer’s rights to another person through a notarized instrument.

The buyer may also pay an installment or the full unpaid balance in advance without interest, and may have full payment annotated on the title covering the property.

Contract terms that defeat the protections in Sections 3 to 6 of the Maceda Law are void. Coverage can still depend on the property’s classification and transaction structure. The statute expressly includes residential condominium apartments but excludes industrial lots and commercial buildings, among other stated exclusions.

Turnover is not the same as acceptance without reservations

Before signing a turnover acceptance, waiver, quitclaim, or “unit accepted as is” form:

inspect the actual unit in daylight if possible;
bring the approved plans, specifications, and sales inventory;
measure the unit and examine the layout;
test doors, windows, plumbing, electrical points, drainage, ventilation, alarms, and fixtures;
inspect ceilings, walls, floors, balconies, waterproofing, and signs of leaks;
check parking and storage allocations;
photograph and video every defect;
prepare a dated punch list; and
require an authorized representative to acknowledge receipt.

If possession is necessary despite unresolved defects, state in writing that acceptance and occupancy are subject to the attached punch list and without waiver of existing claims. Whether a waiver is enforceable depends on its wording, the circumstances, and applicable law; do not sign one casually.

Ask for the occupancy permit and documents necessary for lawful and safe use of the building. A turnover invitation alone does not establish that every regulatory and contractual obligation has been satisfied.

Right to the deed and title after full payment

Under Section 25 of P.D. 957, the developer must deliver title to the buyer upon full payment. Except for charges required to register the deed of sale, the developer may not collect a fee merely for issuing the title.

If a mortgage remains when title should be issued, the developer must redeem the mortgage or the corresponding portion within six months from such issuance so the title can be secured and delivered.

In Fil-Estate Properties, Inc. v. Hermana Realty, Inc., the Supreme Court held that a fully paid buyer could demand a notarized deed of absolute sale and the owner’s duplicate condominium title needed for registration. The decision also distinguished the developer’s duties from the buyer’s obligation to settle taxes and registration expenses validly allocated to the buyer.

Actual transfer still requires compliance with tax and Registry of Deeds requirements. Review the contract carefully to determine which party bears documentary stamp tax, transfer tax, registration expenses, and other transaction costs.

How to pursue a complaint

Step 1: Build a clear timeline

Create a table showing:

payment and event dates;
contractual and License to Sell deadlines;
promises or representations;
construction updates;
notices and demands;
developer responses; and
the specific remedy requested.

Reconcile all payments against official receipts and account statements.

Step 2: Send a formal written demand

State whether you seek completion, correction of defects, delivery of documents or title, removal of improper charges, or refund. Set a reasonable response period, but do not imply that your chosen period replaces a statutory deadline.

If relying on Section 23, expressly connect the suspension of payments to the developer’s failure to develop the project according to the approved plans and completion period.

Step 3: Raise regulatory concerns with DHSUD

DHSUD regulates project registration, licensing, development compliance, and real-estate business practices. Contact the DHSUD Regional Office having authority over the project to:

validate the License to Sell and approved completion period;
ask whether an extension or amendment was approved;
report unlicensed selling or misleading project information;
verify approvals relating to mortgages or plan changes; and
request the current complaint or monitoring procedure.

DHSUD’s official guidance recommends first making a written demand and validating the project documents with the issuing regional office. See the agency’s buyer-awareness and remedies guidance.

Step 4: File the proper claim with HSAC when necessary

The Human Settlements Adjudication Commission (HSAC), which took over the former HLURB’s adjudicatory functions under Republic Act No. 11201, generally has original jurisdiction through its Regional Adjudication Branches over covered buyer claims involving:

refunds;
unsound real-estate business practices;
violations of P.D. 957; and
specific performance of contractual or statutory obligations against a developer, project owner, dealer, broker, or salesperson.

A case generally begins with a verified complaint filed in the proper Regional Adjudication Branch, accompanied by the required supporting documents, copies, and filing fees. Parties must comply with service, conference, position-paper, and other requirements in the rules. HSAC issued Revised Rules of Procedure in 2025; consult the current official rules, forms, branch instructions, and fee schedule before filing.

Do not use an outdated HLURB form or assume that a regulatory inquiry with DHSUD automatically starts an HSAC adjudication. DHSUD regulates; HSAC adjudicates covered disputes.

Appeal and reconsideration periods in administrative proceedings can be short. Follow the period and remedy stated in the decision and the rules currently in force, counted from actual receipt as the applicable rule directs.

Step 5: Consider other appropriate remedies

Depending on the facts, separate issues may involve the Registry of Deeds, local building officials, the Professional Regulation Commission, a financing institution, prosecutors, or regular courts. HSAC does not automatically have jurisdiction over every dispute merely because a condominium is involved.

Suspected falsification, double selling, fraudulent collection, unauthorized signatures, threatened foreclosure, or dissipation of assets requires prompt individualized legal advice. Administrative, civil, and criminal remedies have different elements, procedures, and limitation periods.

Evidence to preserve

Keep original or reliable electronic copies of:

reservation agreement, Contract to Sell, deed, and all annexes;
official receipts, bank records, checks, and statements of account;
License to Sell and Certificate of Registration;
approved plans, permits, and project amendments;
brochures, advertisements, price lists, and model-unit materials;
emails, text messages, chat histories, and call summaries;
construction updates and dated site photographs;
turnover notices, inspection reports, and punch lists;
written demands and proof of delivery;
notices of cancellation or rescission, including envelopes and notarial details;
bank-loan applications and approval or rejection notices;
title records and mortgage annotations; and
names, license details, and representations of brokers or salespersons.

Download online material in a form that preserves the date, URL, and full context. Keep a backup outside the device used for daily communication.

Common mistakes

Paying before independently validating the License to Sell.
Assuming that a development permit or registration certificate authorizes sales.
Checking only the project name, not the particular tower, phase, or scope covered.
Relying on a verbal turnover promise that differs from the contract or approved schedule.
Signing a reservation form without reading its cancellation and financing provisions.
Treating a reservation fee as automatically refundable or automatically forfeitable.
Stopping payments without written notice and evidence of the developer’s breach.
Confusing a Section 23 developer-default refund with a Maceda Law buyer-default refund.
Ignoring a notarized cancellation notice or demand for rescission.
Signing a broad waiver at turnover before documenting defects.
Paying “processing” or title charges without a contractual and legal breakdown.
Waiting until evidence disappears or an appeal or prescriptive period is near expiry.

When legal help is urgent

Consult a Philippine lawyer promptly if:

you receive a notarized cancellation or rescission notice;
the developer declares your payments forfeited;
foreclosure or an adverse mortgage threatens your unit;
the project appears abandoned or has no valid License to Sell;
the unit has allegedly been sold to another buyer;
a substantial refund is refused;
the developer asks you to sign a replacement contract, waiver, quitclaim, or deed;
you discover a major deviation from approved plans;
the developer is insolvent, entering rehabilitation, or disposing of project assets;
turnover involves serious structural, fire-safety, or occupancy concerns; or
an HSAC or court deadline is running.

Frequently asked questions

Can a developer sell a preselling condominium without a License to Sell?

Generally, no. Registration of the project, a development permit, or an approved plan does not by itself authorize public selling. Verify whether the precise project and unit are covered by a valid DHSUD License to Sell. Statutory exemptions are limited and should be documented.

Does the absence of a License to Sell automatically void every reservation agreement?

Not necessarily. The legal effect depends on the transaction and documents. The Supreme Court has distinguished a preliminary reservation arrangement from an actual sale in some circumstances. Lack of a license can nevertheless support regulatory action and may accompany contractual or statutory violations. Obtain advice based on the signed papers and payments.

Can I demand a full refund simply because I changed my mind?

Usually not. Philippine law does not create a general cooling-off period for every condominium purchase. A personal decision to withdraw is normally governed by the contract and, for covered installment sales, the Maceda Law. A full-refund claim under Section 23 instead requires a qualifying failure by the developer to develop the project.

Can I stop paying when turnover is delayed?

Section 23 permits a buyer, after due notice, to desist from further payment because the developer failed to develop according to approved plans and within the applicable period. Because an unsupported payment stoppage may expose the buyer to cancellation, first verify the official completion deadline and any approved extension, document the breach, and serve a clear written notice.

Is a reservation fee included when calculating Maceda Law rights?

The Maceda Law states that down payments, deposits, and options on the contract are included in computing installment payments. Whether a particular reservation payment falls within that rule can depend on the substance of the transaction and its documents, not merely the label printed on the receipt.

Does paying for two years guarantee a full refund?

No. For a buyer-default cancellation covered by the Maceda Law, the basic cash surrender value after at least two years is 50% of total payments, subject to the statutory increases after five years. A full refund may instead arise from a proven developer default under Section 23, a more favorable contract, or another established legal basis.

Can the developer cancel by email?

For cancellation governed by the Maceda Law, an ordinary email alone does not satisfy the statutory requirement of a notice of cancellation or demand for rescission by notarial act. The applicable grace period, 30-day period, and—when required—full payment of the cash surrender value must also be observed.

When must the developer release the condominium title?

P.D. 957 requires delivery of title upon full payment. The seller must also perform its registration obligations. Tax, registration, mortgage-release, and document issues may affect the processing sequence, but they do not give the developer unlimited time to withhold the deed or documents it is legally required to provide.

Should I complain to DHSUD or HSAC?

Use DHSUD for licensing, project regulation, compliance verification, and related regulatory concerns. File an adjudicatory claim with the proper HSAC Regional Adjudication Branch when seeking an enforceable order for a covered refund, specific performance, or relief against an unsound real-estate business practice. The same situation may require dealings with both agencies for different purposes.

Official references

This article provides general legal information, not legal advice or a prediction of any case’s outcome. Rights and remedies depend on the contract, project approvals, payment history, notices, evidence, and current procedural rules. Official sources and procedures were checked as of 14 September 2026.