Quick answer

A buyer of a preselling condominium in the Philippines is protected principally by Presidential Decree No. 957. Before selling units to the public, the developer generally must register the project and obtain a Certificate of Registration and License to Sell from the Department of Human Settlements and Urban Development (DHSUD). The developer must complete the project according to the approved plans, official completion period, contract, and enforceable advertising promises.

If the developer fails to develop or complete the project as required, the buyer may—after giving due notice—stop further installment payments and seek reimbursement of the amounts paid, including amortization interest but excluding delinquency interest, with legal interest when properly awarded. If the buyer simply can no longer pay and the developer is not in breach, the more limited protections of the Maceda Law generally apply.

The correct remedy depends on the contract, the project’s License to Sell, approved plans, payment history, stated completion date, actual construction status, and reason payments stopped. Do not assume that every construction delay automatically entitles a buyer to a full refund.

The main laws protecting condominium buyers

The primary sources are:

Presidential Decree No. 957, the Subdivision and Condominium Buyers’ Protective Decree;
Republic Act No. 6552, commonly called the Maceda Law or Realty Installment Buyer Protection Act;
Republic Act No. 4726, the Condominium Act; and
Republic Act No. 11201, which created DHSUD and reconstituted the former Housing and Land Use Regulatory Board’s adjudicatory arm as the Human Settlements Adjudication Commission (HSAC).

DHSUD regulates condominium projects and licenses. HSAC adjudicates many buyer-developer disputes, including refund claims, specific-performance cases, unsound real estate business practices, and certain unlawful-mortgage disputes.

Before paying a reservation fee

Verify the project’s License to Sell

Ask for the project’s:

Certificate of Registration;
License to Sell number and date;
exact registered project name, tower, and phase;
registered developer or project owner;
approved completion date; and
any amendment, extension, suspension, or revocation affecting the license.

Check these details against the official DHSUD list of projects with a License to Sell or confirm them directly with the DHSUD regional office responsible for the project.

A license issued for another tower, phase, or similarly named development does not necessarily cover the unit being offered. DHSUD also advises buyers to demand the project’s Certificate of Registration and License to Sell before purchasing.

Certain transactions are exempt from the license requirement, such as a qualifying sale by a mortgagee to liquidate a bona fide debt. Ordinary preselling by a developer, however, generally requires a License to Sell.

Understand what a missing license means

Selling without the required license violates P.D. 957 and may expose the developer or responsible persons to regulatory or other legal consequences. It is a serious warning sign.

But the absence of a License to Sell does not automatically make an otherwise valid contract void. The Supreme Court has repeatedly held that P.D. 957 does not prescribe automatic nullity as the consequence of that violation. Refund or cancellation rights must therefore be evaluated using the actual breach, the Maceda Law, P.D. 957, the Civil Code, and the contract. See Moldex Realty, Inc. v. Saberon.

Verify the property and the seller

Before signing or transferring money, obtain and examine:

the title covering the project land and a recent certified true copy, when available;
annotations for mortgages, adverse claims, liens, or court cases;
the approved condominium plan and relevant floor plan;
the master deed and declaration of restrictions, if already available;
the developer’s corporate identity and the authority of the person signing;
the broker’s or salesperson’s identity and professional credentials;
the unit number, floor, orientation, floor area, parking allocation, and permitted use;
the total contract price and all taxes, fees, and closing costs;
the payment schedule and consequences of late payment;
the contractual and licensed completion or turnover date;
conditions for turnover and acceptance;
rules on assignment, resale, cancellation, and refunds; and
estimated association dues and other recurring charges.

Pay only to the developer’s authorized account or cashier and obtain an official receipt. Be wary of instructions to send substantial payments to an individual agent’s personal account.

Do not treat the reservation form as a harmless placeholder

A reservation agreement can impose cancellation, forfeiture, deadline, and document-submission provisions. Read it together with the contract to sell and all incorporated documents.

Ask in writing:

Is the reservation fee refundable?
When does it become part of the purchase price?
What happens if the loan is rejected?
What happens if the developer changes the unit, price, or turnover date?
When will the contract to sell be issued?
Which written document contains every promise made by the agent?

Do not rely on a verbal assurance that contradicts the signed papers.

Rights during the preselling period

The project must follow approved plans and binding representations

Under Sections 19 and 20 of P.D. 957, advertisements must reflect the real facts and must not mislead the public. Facilities, improvements, infrastructure, and other development represented or promised in brochures and sales materials form part of the sales warranties enforceable against the owner or developer.

Preserve copies of:

brochures and flyers;
showroom photographs;
floor plans and scale models;
website and social-media advertisements;
emails, messages, and presentation files;
price quotations and computation sheets; and
written statements about amenities, views, access, unit dimensions, and turnover.

An advertisement can matter even if the same promise is not repeated word-for-word in the contract. Whether a representation is sufficiently definite and applicable to a particular unit remains fact-sensitive.

Material changes cannot simply be hidden from buyers

P.D. 957 restricts alterations to approved plans and represented facilities. The precise consent requirement may depend on whether the matter concerns a condominium or subdivision, the approved project documents, applicable regulations, and the rights of the condominium corporation or buyers.

If the developer announces a significant change, request:

the revised approved plan;
DHSUD’s written approval;
the legal and contractual basis for the change;
its effect on your unit, common areas, price, and completion date; and
the available options if you do not consent.

A cosmetic adjustment is different from a material reduction in floor area, deletion of a promised amenity, transfer to another tower, or substantial change in permitted use.

The seller must register the sale documents

Section 17 of P.D. 957 requires the seller to register contracts to sell, deeds of sale, and similar instruments with the Register of Deeds where the property is situated, whether or not the purchase price has been fully paid.

Failure to register does not automatically invalidate the agreement between the buyer and seller, but it can affect protection against third parties. Request proof of registration and investigate promptly if the developer refuses or if another claim appears on the title.

Buyers must be protected from undisclosed project mortgages

A developer may not mortgage a unit or lot without the regulator’s prior written approval. The buyer must be notified of the loan value allocated to the unit before release of the mortgage loan. P.D. 957 also permits the buyer, at the buyer’s option, to pay installments directly to the mortgagee under the statutory arrangement so the payments can be applied toward the unit’s mortgage indebtedness.

Do not ignore a bank notice, foreclosure notice, annotation, or demand involving the project land. HSAC Regional Adjudicators have original and exclusive jurisdiction over certain actions brought by buyers to annul mortgages or related agreements executed in violation of Section 18 of P.D. 957. The mortgagee may need to be joined in the case.

When the developer misses the completion or turnover date

First identify the legally relevant deadline. Compare:

the completion date in the License to Sell;
any officially approved extension;
the date in the reservation agreement or contract to sell;
the promised turnover date;
any grace period expressly written in the contract; and
the actual scope and status of construction.

P.D. 957 requires the developer to provide the promised development within one year from issuance of the license or within another period fixed by the regulator. For a particular project, the completion date fixed in the License to Sell and approved records is therefore critical.

A mere prediction that the developer will be late may not yet support rescission. In G.G. Sportswear Manufacturing Corp. v. World Class Properties, Inc., the Supreme Court treated a refund claim filed before the applicable completion date as premature under the circumstances.

Once the developer has actually failed to develop the project according to the approved plans and applicable deadline, Section 23 of P.D. 957 may allow the buyer to:

give due notice and desist from further installment payments; and
seek reimbursement of the total amount paid, including amortization interest but excluding delinquency interest, with legal interest where properly due.

The Supreme Court has enforced this remedy where the developer failed to construct or complete the condominium project. See Fil-Estate Properties, Inc. v. Spouses Go and Tamayo v. Huang.

This is not the same as a buyer voluntarily canceling because of a change of mind or financial difficulty.

Full refund for developer breach versus Maceda Law refund

If the developer failed to develop the project

Section 23 of P.D. 957 may support reimbursement of the total amount actually paid when all statutory conditions are met. The buyer should give the developer due notice and clearly state that further payment is being stopped because of the developer’s failure to develop according to the approved plans and deadline.

The available amount and interest must be established from receipts, account records, the demand, and the facts of the breach. A buyer should not automatically stop paying based only on rumor, an informal construction estimate, or an agent’s statement.

If the buyer defaults for another reason

Section 24 of P.D. 957 refers the buyer to the Maceda Law when nonpayment is for a reason other than the developer’s failure to develop.

For a covered residential condominium purchase:

Payment history	Minimum statutory protection
At least two years of installments paid	A grace period of one month for every year of installment payments made, without additional interest. This grace-period right may generally be exercised only once every five years during the contract and its extensions.
At least two years paid and the contract is canceled	Cash surrender value equal to 50% of total payments made, plus 5% for every year after five years of installments, capped at 90%.
Less than two years of installments paid	A grace period of at least 60 days from the date the installment became due. No statutory cash-surrender refund is expressly required by Section 4 solely on this basis.

For a buyer who has paid at least two years, cancellation can take effect only after:

the buyer receives a notice of cancellation or demand for rescission through a notarial act;
30 days have passed from receipt; and
the seller has fully paid the required cash surrender value.

Down payments, deposits, and options on the contract are included when computing the total payments for the protections in Section 3. The law also permits the buyer, during the grace period and before actual cancellation, to reinstate the contract by updating the account or to sell or assign the buyer’s rights through a notarized deed.

A buyer may also pay any installment or the full unpaid balance in advance without interest on the advance payment.

The Maceda Law expressly covers residential condominium apartments but excludes commercial buildings and industrial lots. A unit’s classification and actual transaction documents can therefore matter, especially for commercial or mixed-use units. It also does not automatically govern a separate bank loan merely because the loan financed the purchase.

Rights at full payment and turnover

Upon full payment, the developer must deliver the title to the unit. Under Section 25 of P.D. 957, the developer may not collect a separate fee merely for issuing the title, apart from charges required to register the deed of sale.

If a mortgage remains over the unit when title should be issued, the developer must redeem the mortgage or the corresponding portion within six months from issuance so that title can be secured and delivered to the fully paid buyer.

Before accepting turnover:

conduct a detailed inspection;
photograph every room, fixture, meter, window, door, and unfinished area;
compare the actual unit with the approved or contractual plan;
measure material dimensions where floor area is disputed;
prepare a dated punch list;
record missing amenities and access problems;
request the occupancy permit and relevant completion documents;
obtain the condominium corporation’s governing documents and dues schedule; and
sign an acceptance or waiver only after understanding its effect.

Taking possession can affect responsibility for real-property taxes. Under P.D. 957, the developer generally bears realty taxes while title has not passed, but a buyer who has actually taken possession and occupied the unit may become liable to the developer beginning in the year following possession and occupancy.

What to do when a problem arises

1. Build a complete file

Preserve originals or reliable copies of:

reservation agreement and contract to sell;
amendments, addenda, and disclosure documents;
official receipts, bank records, and statements of account;
License to Sell and Certificate of Registration;
approved completion date and any extension;
title records and mortgage annotations;
approved plans and unit specifications;
advertisements and written sales promises;
construction photographs with dates;
turnover notices and inspection reports;
emails, letters, text messages, and chat exports; and
courier receipts and proof that notices were received.

Keep a chronology of payments, promises, delays, follow-ups, and responses.

2. Request documents and an explanation in writing

Ask the developer for its current construction status, official completion date, basis for any extension, revised timetable, and proposed remedy. State the precise unit and contract involved.

Do not rely solely on a phone call. After any meeting, send a short written summary and ask the developer to correct inaccuracies.

3. Send a formal notice or demand

If invoking Section 23 of P.D. 957, the notice should identify:

the buyer and unit;
the contract;
the applicable approved plan and deadline;
the specific failure complained of;
supporting documents;
whether the buyer demands performance or reimbursement; and
where and how the developer should respond.

The timing and wording can affect the case. Obtain legal advice before suspending payments, signing a cancellation document, accepting a partial refund, or waiving claims.

4. Approach the correct government body

Contact DHSUD for regulatory concerns such as:

selling without the required License to Sell;
misleading project representations;
possible violations of approved plans;
licensing or registration status; and
requests for official project information.

File an appropriate case with the HSAC Regional Adjudication Branch when seeking adjudication of matters within its jurisdiction, such as:

refund;
specific performance;
enforcement of contractual or statutory obligations;
unsound real estate business practices; or
relief involving a mortgage allegedly made in violation of P.D. 957.

Under R.A. 11201, complaints are generally handled initially by the Regional Adjudicator. The proper branch ordinarily depends on the applicable venue rules, including the project’s location. Consult the HSAC website and its 2025 Revised Rules of Procedure announcement for the current complaint requirements, forms, fees, service rules, and branch details.

A complaint normally must be verified and supported by the relevant documents. Where a Section 23 claim concerns a purchase price paid through a housing loan, R.A. 11201 requires the bank or financing institution to be impleaded as a necessary party.

A Regional Adjudicator’s decision or appealable order generally must be appealed to the HSAC Commission within 15 calendar days from receipt. A Commission decision generally becomes final and executory after 15 calendar days from receipt, subject to review by the Court of Appeals under Rule 43 where legally available. These periods are short; obtain advice immediately upon receiving a decision or adverse order.

Common mistakes to avoid

Paying before verifying the License to Sell for the exact tower and phase.
Assuming a famous brand or registered corporation guarantees project completion.
Treating a reservation agreement as nonbinding.
Depending on verbal promises that do not appear in any record.
Discarding brochures, screenshots, receipts, or chat messages.
Confusing a buyer-default refund under the Maceda Law with a full-refund claim for developer breach.
Assuming lack of a License to Sell automatically voids the purchase.
Stopping payments without written notice or reliable evidence of an existing developer breach.
Ignoring a notarized cancellation notice.
Missing a 15-calendar-day appeal period.
Signing a quitclaim, waiver, deed of cancellation, substituted-unit agreement, or “full settlement” receipt without advice.
Accepting turnover without documenting defects and discrepancies.
Suing only the developer when the governing law requires a financing institution or mortgagee to be included.

When legal help is urgent

Consult a Philippine lawyer promptly if:

the developer threatens cancellation or forfeiture;
you have received a notarized notice of cancellation;
the licensed or contractual completion date has passed;
construction has stopped or the project appears abandoned;
the land or unit is mortgaged or facing foreclosure;
the developer offers a refund only in exchange for a broad waiver;
your unit has been changed, transferred, or allegedly sold to another buyer;
you are being pressured to accept a materially different unit;
substantial payments lack official receipts;
the developer or agent can no longer be located;
you received an HSAC summons, decision, or order; or
an appeal, prescription, or contractual deadline may be running.

Frequently asked questions

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

Usually not under Section 23 of P.D. 957. If the developer is not in breach and the issue is the buyer’s inability or decision not to continue, the contract and the Maceda Law generally determine the consequences. A cash-surrender refund under the Maceda Law usually requires at least two years of installment payments.

Does delayed turnover always justify a full refund?

No. The applicable completion date, any authorized extension, the nature and length of the delay, the contract, and the project’s actual status must be established. A claim made before the operative deadline may be premature.

May the developer forfeit all my payments immediately after one missed installment?

Not if the transaction is covered by the Maceda Law and its mandatory grace-period and cancellation requirements have not been followed. Contract provisions inconsistent with Sections 3 to 6 of that law are void.

Is an email cancellation notice enough under the Maceda Law?

For statutory cancellation after the buyer has paid at least two years, the law requires notice of cancellation or demand for rescission by a notarial act, a 30-day period from the buyer’s receipt, and full payment of the cash surrender value. An ordinary email alone does not satisfy all those requirements.

Can advertisements become enforceable promises?

Yes. P.D. 957 states that facilities, improvements, infrastructure, and other development represented in brochures, advertisements, and sales propaganda form part of the sales warranties enforceable against the owner or developer. The buyer still must prove the representation and its application to the purchase.

Who handles a refund dispute—DHSUD or HSAC?

DHSUD performs regulatory and licensing functions. HSAC adjudicates covered disputes and claims, including many buyer refund and specific-performance cases. The facts may justify both a regulatory report to DHSUD and an adjudicatory claim before HSAC.

Can the developer charge a title-release fee?

P.D. 957 prohibits a fee merely for issuance of title, except charges required for registering the deed of sale. Legitimate taxes and registration expenses should be separately identified and supported.

Can a foreign national buy a condominium unit?

A foreign national may generally acquire a condominium unit only within the ownership limits and conditions imposed by the Constitution and the Condominium Act, including restrictions tied to foreign participation in the condominium corporation. Eligibility should be verified from the project’s ownership records before payment because the remaining foreign-ownership allocation can be decisive.

Official sources

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, project approvals, payment history, notices, and evidence. Official sources and procedures were checked as of September 15, 2026.