This guide explains the legal bases, strategy, and drafting mechanics for Philippine buyers seeking a refund when a developer delays turnover of a pre-selling condo or subdivision unit. It is practical and comprehensive, but it’s not a substitute for tailored legal advice.

1) The setting: what “pre-selling delays” usually look like

Pre-selling means you buy from plans; turnover is promised on a future date (often with grace periods or “allowable slippage”).
Delay arises when the promised turnover (plus any contractual extension) passes without delivery of your unit in deliverable condition (fit for use and with the agreed finishes/utilities), or when the project itself is not completed as represented.
Typical documents: Reservation Agreement, Contract to Sell (CTS) or Purchase Agreement, developer’s brochures/ads, receipts/acknowledgment slips, notices, and any bank financing approvals.

2) Legal foundations for a refund

A. Subdivision & Condominium Buyers’ Protective Decree (PD 957) and rules of the housing regulators

Developers must secure permits (e.g., License to Sell and Development/Building Permits) and complete the project within committed timelines.
If a developer fails to develop/complete or fails to deliver, buyers have statutory remedies that include canceling the sale and demanding a refund of payments with interest and pursuing administrative sanctions against the developer.
Today, DHSUD (policy/permits) and the Human Settlements Adjudication Commission (HSAC) (quasi-judicial dispute resolution) handle these matters.

B. Maceda Law (RA 6552)—context

The Maceda Law protects installment buyers who default; it guarantees cash surrender values in case of cancellation by the buyer due to the buyer’s own default.
When the developer is the one in breach (delay/non-delivery), the stronger route is rescission for breach (see below), often resulting in full restitution, not mere cash surrender values.

C. Civil Code remedies for breach of a reciprocal obligation (sales on installments)

Under the Civil Code (on reciprocal obligations), unreasonable delay or non-delivery lets the buyer choose:
1. Specific performance (compel delivery) plus damages, or
2. Rescission (cancellation) with mutual restitution—you recover what you paid, and the developer takes back its rights—plus damages and interest where proper.
Legal interest on monetary awards is generally 6% per annum (from when the amount becomes due or from demand, depending on circumstances).

D. Misrepresentation & unfair sales practices

Material misrepresentations (e.g., promised amenities, size, finish, view, or turnover date used to induce you to buy) can support rescission and damages.
No License to Sell at the time of sale strengthens your position for cancellation and refund.

3) When is the developer “in delay”?

Calendar default: The contract fixes a turnover date (often “on or before [date]” with permissible slippage). If that lapses without delivery, the developer is in mora solvendi (delay).
Read the fine print:
- Allowable slippage (e.g., 3–12 months), force majeure clauses, and “best-efforts”/“subject-to-permits” language.
- Notice requirements (e.g., buyer must be notified of turnover schedule/acceptance inspection).
Constructive non-delivery: Handover of a non-useable unit (major punch-list defects, missing utilities, absence of occupancy permits) can count as failure to deliver.

4) Strategic options: which remedy to choose?

Specific Performance (finish and deliver the unit)
- Use where you still want the unit and believe completion is imminent.
- Demand liquidated damages (if in the contract) or actual damages (rent you had to pay, storage, loan reprocessing fees), and interest.
Rescission + Refund
- Use where delays are long/indefinite, or the project deviates materially from the plan.
- Seek full restitution of all amounts paid (reservation, down payment, monthly amortizations, accepted turnover fees) plus 6% legal interest, and damages (e.g., alternative housing costs).
- Under buyer-protective rules, refunds are often framed as principal + interest, rather than discounted surrender values.
Price reduction / compensation
- If you accept late delivery, you may negotiate penalties, free months of association dues, unit upgrades, or cash compensation.
Administrative remedies
- You may file against the developer for violations of PD 957 and related regulations, potentially prompting compliance orders and penalties.

5) The demand letter: purpose and tone

Purpose: Put the developer in formal default, settle the record, preserve your rights, and open the door to settlement.
Tone: Firm, factual, and professional; avoid admissions that weaken your position.
Delivery: Send by registered mail with return card, reputable courier, and email to the developer’s official addresses; keep proof of dispatch and receipt. Consider copying DHSUD/HSAC to signal seriousness.

6) What to include in your demand letter

Buyer and unit details
- Full name, address, contact info; project name; unit number, floor, parking; CTS number and date; total payments to date.
Contractual promises and actual timeline
- Quote the promised turnover date and any allowable extensions.
- State the actual status (e.g., “As of 7 November 2025, no turnover notice and construction remains incomplete.”).
Legal bases (plain language)
- Cite your rights under PD 957 and the Civil Code: failure to deliver entitles you to rescind and get a full refund with interest, or to insist on delivery with damages.
- If applicable, mention lack of License to Sell at the time of reservation/CTS, or material deviations from the approved plans/ads.
Monetary demand (itemized)
- Reservation fee
- Down payment (less any discounts already given)
- Monthly amortizations (principal portions)
- Collected “turnover”/“transfer” fees (if paid)
- Bank charges you shouldered due to the delay (if causally linked)
- Interest at 6% per annum from date of demand (or from when each payment was made—explain your position).
- Damages (e.g., excess rent due to delayed move-in), with computation.
Documentary attachments (copies)
- Reservation Agreement, CTS, official receipts/acknowledgments, emails/notices, advertisements/brochures highlighting turnover claims, photos of site progress, any regulatory records you hold (e.g., permit or LTS details, if provided).
Demand and deadline
- Clear remedy (refund with interest or turnover by a date certain meeting stated standards).
- Definite deadline (e.g., 10 business days from receipt).
- Notice that failure to comply will lead to filing a complaint with HSAC and pursuing damages, costs, and attorney’s fees.
Payment mechanics
- Refund via manager’s check or bank transfer within the deadline; require official computation and release documents only upon confirmed payment (avoid signing broad waivers in advance).

7) Sample demand letter (editable template)

[Date] [Developer’s Registered Name] [Registered Business Address / Email]

Subject: Demand for Refund with Interest due to Delayed Turnover – [Project / Unit No.]

Dear [Developer/Officer’s Name]:

I am the buyer of [unit details] under Contract to Sell dated [date]. The contract and your representations committed turnover on or before [date], subject to [stated extension, if any]. As of [today’s date], you have not delivered the unit in deliverable and useable condition.

Your failure to deliver constitutes breach of your obligations under the Civil Code and violations of buyer protections for subdivision and condominium projects. I hereby rescind the sale and demand a full refund of all amounts I paid, with legal interest at 6% per annum, and damages for losses caused by your delay.

Itemized amounts paid: – Reservation fee: ₱[ ] (paid [date]) – Down payment: ₱[ ] (paid [dates]) – Monthly amortizations (principal): ₱[ ] (paid [dates]) – Collected turnover/transfer charges: ₱[ ] – Other charges borne due to your delay (bank/loan fees, etc.): ₱[ ] Subtotal: ₱[ ] Accrued interest (provisional computation): ₱[ ]

Kindly remit payment within ten (10) business days from receipt of this letter, via [bank transfer details / manager’s check]. Upon confirmed payment, I will execute the appropriate release of claims limited to the amounts paid.

If you fail to comply, I will file a complaint with the HSAC and pursue administrative and civil remedies, including damages, attorney’s fees, and costs.

Enclosures: copies of CTS, receipts, correspondence, and project representations relied upon.

Sincerely, [Buyer’s Name] [Address / Email / Mobile]

8) Computing your claim

Principal: Add all cash paid to the developer (reservation, DP, amortizations, accepted “turnover” or “misc” fees).
Interest:
- A conservative demand is 6% per annum from your date of demand until payment.
- You may argue for interest from each payment date (stronger in equity where the developer held your money while in delay).
Damages:
- Actual (receipts): extra rent, storage, loan reprocessing, lost leave, travel for inspections, etc.
- Liquidated damages if the contract sets a penalty for delay (often per month of delay).
Attorney’s fees & costs: If you engage counsel or file a case, you may claim these subject to the tribunal’s discretion.

9) Anticipating common developer defenses—and how to respond

Force majeure / acts of government
- Check whether the event truly made construction impossible, not merely more expensive; was notice given as required? Did the developer mitigate and resume timely? Is it still ongoing?
Allowable slippage / grace periods
- Show that even after these windows, delivery still didn’t occur, or that what was delivered was not substantially compliant.
Buyer’s own default
- If you were current or were willing and able to pay upon proper turnover, emphasize this. If they refused to set a genuine turnover date, that’s on the developer.
“Best efforts / subject to permits” clauses
- Buyer-protective rules prioritize completion and delivery; a developer’s internal or permitting issues do not excuse open-ended delay.
Offer of alternative unit
- You may reject if it’s not equivalent (size, view, floor, orientation) or if the deviation is material to your purchase decision.

10) Filing if the demand fails

Where to file:
- HSAC has jurisdiction over disputes between buyers and developers relating to PD 957 projects, including rescission, refund, and damages.
What to file:
- Verified complaint, certificate of non-forum shopping, documentary evidence, computation of claims, witness affidavits (often your own), and proof of service on the developer.
Process (typical):
- Docketing & fees → Mediation → Position papers & evidence → Decision.
- Appeals go to the HSAC Commission en banc, then to the Court of Appeals (via Rule 43).
Parallel/alternative steps:
- Administrative complaint with DHSUD for regulatory breaches;
- Civil action in trial court under the Civil Code;
- Criminal liability may arise for certain PD 957 violations (e.g., selling without a license), though these are case-specific.

11) Evidence checklist

Identification & contract chain: Reservation Agreement, CTS/Purchase Agreement, amendments, payment schedule.
Official receipts, bank statements, proof of bank charges.
Turnover communications (or the lack of them), punch-list reports, photos/videos of site progress, amenities status.
Ads/brochures and sales talk you relied on (turnover month, finishes, amenities, views).
Any regulatory documents or references to permits/LTS the developer gave you.
Your demand letter and proof of receipt (registry return card/courier tracking/email logs).

12) Practical tips & negotiating levers

Stay current (or ready) on amortizations while you demand—this preserves leverage if you choose specific performance; if you’re clearly canceling, state that you cease further payments pending refund.
Compute two paths in your letter: (a) refund with interest and (b) delivery by a firm date plus compensation—and let the developer pick, but on your terms.
Watch the release form. Accept only a narrow release referencing the actual amount paid and received; strike any clauses waiving unknown future claims unrelated to the dispute.
Mind prescription/limitations. Actions on written contracts generally have a 10-year prescriptive period; fraud-based actions are shorter (4 years from discovery). Don’t delay asserting rights.
Association dues/real property tax. If collected before lawful turnover or before unit is useable, dispute and include in your refund demand.

13) Special notes: condos vs. subdivisions; bank financing

Condominiums: Ensure occupancy permits, functioning common areas, and deliverables (e.g., meters, elevators).
Subdivisions: Check road, drainage, water/electric commitments; non-completion of basic facilities is a strong basis for rescission/refund.
With bank financing: If the loan was approved but no turnover, ask the bank to defer take-out or cancel without penalties attributable to you; include reprocessing/commitment fees caused by the developer’s delay in your damages.

14) Quick FAQ

Q: Can I claim full refund, not just “cash surrender value”? A: Yes—when the developer is in breach (delay/non-delivery), rescission with full restitution is the proper framework, distinct from Maceda Law cancellations due to buyer default.
Q: Do I have to wait for the project to be 100% done? A: No—if your unit turnover date has passed (with any contractual extension) and the unit cannot be delivered useably, you may act.
Q: Do I need a lawyer to send a demand letter? A: Not strictly, but counsel helps with framing, interest/damages computation, and avoiding waivers.

15) Clean checklist for your demand package

Cover letter (demand) with clear ask and deadline
Itemized refund computation + interest
Proof of payments (ORs, bank statements)
Contract set (Reservation, CTS, amendments)
Evidence of delay/non-delivery (photos, emails)
Ads/brochures used to induce sale
Dispatch proofs (registry card, courier, email headers)
Draft HSAC complaint (ready if deadline lapses)

Bottom line

When a developer misses pre-selling turnover in the Philippines, you are not limited to surrender values. The governing framework (buyer-protective housing rules + Civil Code) supports rescission with full refund and interest or specific performance with damages. A well-crafted demand letter—fact-checked, time-stamped, and properly delivered—often triggers settlement. If it doesn’t, your file should already be litigation-ready.