Quick answer

A buyer of a preselling condominium is protected even before the unit is completed. The developer generally must register the project and obtain a License to Sell from the Department of Human Settlements and Urban Development (DHSUD) before advertising or selling units. The developer must also deliver the project, unit, amenities, and other promised facilities according to the approved plans, advertisements, contract, and stated completion schedule.

If the developer fails to develop the project as promised, the buyer may, after giving due notice, stop paying and seek reimbursement under Section 23 of Presidential Decree No. 957. If the buyer—not the developer—is the one who cannot continue paying, the cancellation and refund rules of Republic Act No. 6552, or the Maceda Law, may apply.

These remedies are different. Do not assume that every cancellation produces a full refund, or that a reservation agreement can override statutory protections.

The principal laws protecting condominium buyers

The main protections come from:

Presidential Decree No. 957, the Subdivision and Condominium Buyers’ Protective Decree;
Republic Act No. 6552, the Realty Installment Buyer Protection Act or Maceda Law;
Republic Act No. 4726, the Condominium Act;
the Revised Implementing Rules and Regulations of P.D. 957; and
the contract to sell, reservation agreement, approved condominium plan, master deed, declaration of restrictions, advertisements, and written representations covering the project.

P.D. 957 is not limited to installment purchases. Its project-development and selling protections can apply whether the condominium is bought in cash or by installments. The Maceda Law, by contrast, specifically addresses real estate purchased on installment when the buyer defaults.

Before reserving a unit

Verify the project’s License to Sell

A condominium project generally cannot lawfully be advertised or sold without project registration and a License to Sell. Ask for the exact:

project name and location;
Certificate of Registration number;
License to Sell number;
tower, phase, floor, and unit covered;
approved completion date; and
name of the registered owner and developer.

Check the project against the DHSUD’s official List of Projects with License to Sell. If the listing is unclear, confirm directly with the DHSUD regional office that issued the license. A license for another tower, phase, or development does not necessarily cover the unit being offered.

Do not rely only on a broker’s screenshot, brochure, or statement that an application is “being processed.” DHSUD expressly advises prospective buyers to examine and validate the project’s Certificate of Registration and License to Sell.

Some transactions may fall within exemptions recognized by law or regulation. If the seller claims an exemption, request the DHSUD-issued exemption document and verify its scope.

Confirm who owns the land

Obtain or inspect a recent certified true copy of the land title. Compare the registered owner with the developer named in the contract. If they differ, ask for the development agreement, authority to sell, joint-venture document, or other instrument establishing the developer’s rights.

Check for mortgages, adverse claims, notices of levy, pending litigation, and other annotations. A mortgage is not automatically unlawful, but P.D. 957 regulates project mortgages. DHSUD approval is generally required, affected buyers must be notified before the loan proceeds are released, and the mortgage arrangement must permit the release of a fully paid unit from the mortgage.

Review the approved plans and condominium documents

Ask to inspect:

the approved condominium plan and building permit;
the master deed and declaration of restrictions;
the unit’s approved area, location, boundaries, and use;
parking-space documents, if parking is included;
the schedule of project completion;
specifications for finishes, fixtures, utilities, and amenities;
association rules and estimated condominium dues;
restrictions on leasing, pets, renovations, and commercial use; and
any easements or exclusive-use arrangements affecting common areas.

A model unit may contain upgrades, enlarged furniture layouts, or features not included in the sale. Require the seller to identify in writing what is standard, optional, or merely illustrative.

Verify the salesperson or broker

Ask for the broker’s or salesperson’s full name, Professional Regulation Commission identification details, and authority from the developer. Payments should be made only through officially authorized channels and supported by official receipts.

Never send money to a personal account merely because a salesperson says it will secure a discount or priority allocation.

Representations in advertisements matter

Under Section 19 of P.D. 957, advertisements concerning a condominium project must accurately reflect the project’s real facts and must not mislead buyers. Facilities, improvements, infrastructure, and other representations in advertisements and sales materials are treated as warranties enforceable against the developer or owner.

Preserve copies of:

brochures, flyers, price lists, and computation sheets;
screenshots of webpages and social-media advertisements;
emails, messages, and recorded online presentations;
photographs or videos of scale models and showrooms;
promised turnover dates;
statements about views, unit orientation, parking, amenities, or access; and
written assurances made by authorized representatives.

Advertisements should still be read with the final signed documents and approved plans. A buyer’s claim may depend on whether the representation was definite, attributable to the developer, and material to the purchase.

Read every document before paying

A reservation form is legally significant. It may identify the unit, price, payment schedule, financing assumptions, refund conditions, and deadline for signing the contract to sell.

Before signing, confirm:

the total contract price and whether VAT is included;
reservation fee, down payment, monthly amortizations, and balloon payments;
closing, documentary, registration, utility, association, and turnover charges;
interest, penalties, and late-payment rules;
the firm turnover or completion date and any grace period;
acceptable grounds for delay;
the procedure for inspection and correction of defects;
consequences if bank financing is denied;
cancellation and refund provisions;
rules on assignment or transfer of buyer rights; and
the dispute-resolution clause.

Demand copies of all signed documents immediately. Blank spaces, unsigned annexes, and verbal side agreements create avoidable disputes.

A clause stating that every payment is automatically forfeited may be ineffective if it conflicts with P.D. 957 or the Maceda Law. The Maceda Law expressly treats contrary contractual stipulations as void.

The developer must complete what was approved and promised

Section 20 of P.D. 957 requires the owner or developer to construct and provide the promised facilities, improvements, and infrastructure within the approved period. Section 22 generally prohibits altering approved plans, facilities, amenities, or open spaces without DHSUD permission and the required buyer or homeowners’ association consent.

A developer cannot necessarily avoid responsibility by calling a major change an “upgrade” or invoking a broad contractual right to revise plans. The significance of a change depends on the approved plans, the contract, regulatory authorization, and the required consent.

Delays caused by events genuinely beyond the developer’s control may require separate analysis. The contract’s force-majeure language is relevant, but it is not conclusive by itself. Ask for the specific event, affected period, government approval for any extension, and revised completion date.

If the developer fails to deliver

When the developer fails to develop the condominium according to the approved plans and within the required period, Section 23 of P.D. 957 gives the buyer important remedies.

After giving due notice to the developer, the buyer may suspend further installment payments because of the developer’s failure. The buyer may also demand reimbursement of the total amount paid, including amortization interest but excluding delinquency interest, with interest at the legal rate.

The Supreme Court has recognized that Section 23 gives an affected buyer the choice to seek reimbursement or await further development. Whether a particular delay or deficiency justifies suspension, rescission, or refund depends on the evidence, the approved completion schedule, legally authorized extensions, and the seriousness of the breach. See, for example, Lefebre v. Pryce Properties Corporation.

Before stopping payment:

Obtain the contract, official receipts, License to Sell, approved completion schedule, and relevant plans.
Document the project’s actual condition through dated photographs, videos, correspondence, and official project updates.
Send a written notice identifying the developer’s specific failures and the relief demanded.
Use a delivery method that proves receipt.
Obtain legal advice before suspending automatic debits or postdated checks, particularly if the breach or completion deadline is disputed.

Stopping payment without connecting the decision to a documented developer breach can allow the developer to characterize the buyer as being in default.

If the buyer can no longer continue paying

This situation is generally governed by the Maceda Law, not the full-refund rule for developer nonperformance.

Buyer has paid at least two years of installments

The buyer is generally entitled to:

a grace period of one month for every year of installment payments made, without additional interest, exercisable once every five years of the contract and its extensions; and
if the contract is cancelled, a cash surrender value equal to 50% of total payments made.

After five years of installments, the cash surrender value increases by 5% for every additional year, but cannot exceed 90% of total payments.

Down payments, deposits, and options on the contract are included when computing total payments under the statute.

Cancellation becomes effective only after both:

30 days have passed from the buyer’s receipt of a notarized notice of cancellation or demand for rescission; and
the seller has paid the required cash surrender value.

Buyer has paid less than two years of installments

The seller must generally give the buyer a grace period of at least 60 days from the date the unpaid installment became due.

If the buyer still does not pay, the seller may cancel the contract only after 30 days from the buyer’s receipt of a notarized notice of cancellation or demand for rescission.

The statute does not grant the same cash surrender value to a buyer who has paid less than two years. A refund may nevertheless arise under the contract, P.D. 957, another applicable law, or the facts of the transaction.

Other Maceda Law rights

Before effective cancellation, the buyer may generally:

sell or assign the buyer’s rights through a notarized instrument;
reinstate the contract during the statutory grace period; and
pay the full unpaid balance in advance without interest, with the payment annotated on the title when appropriate.

These rules concern buyer default. They should not be used to reduce a remedy that arises because the developer itself failed to perform.

Turnover, inspection, and defects

Do not sign a turnover acceptance, waiver, or quitclaim without inspecting the actual unit and common areas relevant to the sale.

During inspection:

measure the unit and compare it with the contractual and approved area;
test doors, windows, locks, outlets, plumbing, drainage, ventilation, and fixtures;
inspect ceilings, walls, floors, waterproofing, and signs of leaks;
compare finishes and inclusions with the specifications;
confirm the unit number, floor, orientation, parking slot, and storage area;
prepare a dated punch list with photographs; and
require written repair commitments and completion dates.

A signed acceptance may be used as evidence that the unit was delivered satisfactorily, although it does not necessarily erase concealed defects, statutory rights, fraud, or obligations expressly preserved in the turnover documents.

Title, taxes, and additional charges

Under Section 25 of P.D. 957, the developer must deliver the title to the buyer upon full payment. No fee may be collected for issuing the title except those needed to register the deed of sale with the Register of Deeds.

Section 26 generally makes the developer responsible for real-property taxes and assessments on the unit until title passes to the buyer. If the buyer has taken possession and is enjoying the unit before transfer of title, the contractual and factual allocation should be examined carefully.

Before paying turnover or closing charges, demand an itemized written computation and the legal or contractual basis for each amount. Distinguish government taxes and registration costs from administrative, processing, utility, association, and developer-imposed charges.

Where to bring a complaint

Buyer-developer disputes involving P.D. 957—including claims concerning refunds, project development, contractual obligations, and unsound real-estate business practices—generally fall within the adjudicatory jurisdiction of the Human Settlements Adjudication Commission (HSAC).

The HSAC’s official website provides information on how to file a verified complaint and access to its rules and regional offices. The HSAC issued 2025 Revised Rules of Procedure, so parties should use the current forms, filing requirements, fees, service rules, and appeal periods rather than relying on older HLURB materials.

DHSUD, meanwhile, performs regulatory functions such as project registration, licensing, and monitoring. A regulatory report to DHSUD and an adjudicatory complaint before HSAC serve different purposes. Depending on the problem, both may be relevant.

Jurisdiction can become complicated when claims involve banks, third-party contractors, fraud, criminal conduct, insolvency, or issues outside P.D. 957. Obtain legal advice before choosing a forum or filing parallel cases.

Evidence to preserve

Keep both paper and electronic copies of:

reservation agreement, contract to sell, deed, and all annexes;
official receipts, bank records, ledgers, and payment schedules;
License to Sell and Certificate of Registration details;
approved plans, specifications, master deed, and restrictions;
advertisements and sales presentations;
emails, text messages, chat logs, and demand letters;
proof that notices were received;
construction updates, inspection reports, and dated photographs;
turnover and punch-list documents;
financing approvals or rejection notices; and
notarized cancellation notices, collection letters, and statements of account.

Export messages from apps before accounts or group chats disappear. Retain the original files and metadata where possible.

Common mistakes to avoid

Reserving a unit without independently verifying the License to Sell.
Assuming that a license for one tower or phase covers the entire development.
Relying on oral promises about turnover, views, rental income, financing, or amenities.
Paying to a personal account or accepting acknowledgments instead of official receipts.
Signing documents with blank provisions or missing annexes.
Treating every cancellation as a Maceda Law full-refund case.
Stopping payment without written notice and evidence of developer nonperformance.
Ignoring a notarized cancellation or collection notice.
Signing a broad waiver during turnover or refund negotiations without understanding it.
Waiting until records, advertisements, and site conditions are difficult to prove.

When legal help is urgent

Consult a Philippine lawyer promptly when:

you receive a notarized cancellation, rescission, or final demand;
the developer threatens forfeiture or resale of your unit;
postdated checks may be deposited despite a disputed suspension;
the project appears abandoned or the developer is becoming insolvent;
your unit has been sold or promised to someone else;
the land or unit faces foreclosure, levy, or an adverse claim;
the developer demands a waiver in exchange for turnover or partial refund;
a filing, reconsideration, or appeal period may be running; or
the amount involved makes an incorrectly framed claim difficult to reverse.

Frequently asked questions

Can a developer presell a condominium without a License to Sell?

Generally, no. Condominium projects must ordinarily be registered and licensed before units are advertised or sold. Verify any claimed statutory or DHSUD-approved exemption.

Is a reservation fee automatically nonrefundable?

No. Its treatment depends on the documents, the reason the transaction did not proceed, the seller’s compliance, and applicable law. A “nonrefundable” label does not automatically defeat statutory remedies.

Am I entitled to a full refund if I simply change my mind?

Not ordinarily. Voluntary withdrawal is governed by the contract and, for qualifying installment purchases, the Maceda Law. A full reimbursement under P.D. 957 generally requires a legally sufficient developer failure.

Can I stop paying because turnover is delayed?

Section 23 may permit suspension after due notice when the developer has failed to develop the project as required. Confirm the binding completion date, authorized extensions, and evidence of breach before acting.

Does the Maceda Law apply after only one year of payments?

Yes, but the protection differs. A buyer who has paid less than two years generally receives at least a 60-day grace period and the required notarized cancellation notice, but not the statutory cash surrender value granted after two years.

Can the developer change the amenities or layout?

Not freely. Material changes to approved plans and promised facilities are regulated by P.D. 957 and may require DHSUD approval and the prescribed buyer or homeowners’ association consent.

What if the project land is mortgaged?

A mortgage does not by itself invalidate the sale, but P.D. 957 imposes safeguards. Verify DHSUD approval, notice to buyers, and the mechanism for releasing the fully paid unit from the mortgage.

When should the condominium title be delivered?

The developer must deliver the title upon full payment, subject to completion of the documents and registration process required by law. Unexplained or prolonged failure may support a claim under P.D. 957.

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 signed documents, payment history, approved plans, notices, project records, and specific facts. Official sources were checked as of September 15, 2026.