Eviction After Buyback by Developer: Pag-IBIG Foreclosure and Grace-Period Rules (Philippines)

This article explains, in Philippine context, what happens when a housing borrower falls into default on a Pag-IBIG–financed home or a developer-assisted (CTS) account, how “developer buyback” works, when and how eviction may legally occur, and what grace periods and cures are available. It is general information, not legal advice for a specific case.

1) The players and the paperwork—why it matters

Pag-IBIG (HDMF) runs two broad pathways for end-users:

Developer-assisted “CTS” pathway (pre-takeout).
- You buy a subdivision/condo unit from a developer on Contract-to-Sell (CTS).
- The developer assigns receivables to Pag-IBIG or keeps the CTS until loan “takeout.”
- If you default within the warranty period set in the Pag-IBIG–developer agreement, the developer is required to “buy back” the receivable/account (or Pag-IBIG can require it). This is what people commonly call developer buyback.
Retail loan / post-takeout pathway (REM).
- Pag-IBIG releases the loan proceeds (“takeout”), you sign a Real Estate Mortgage (REM) over the property in favor of Pag-IBIG, and a Transfer Certificate/Condominium Certificate of Title is issued in your name with the mortgage annotated.
- If you default, Pag-IBIG proceeds to extrajudicial foreclosure under Act No. 3135 (as amended).

Why the distinction matters:

CTS (installment sale) is largely governed by R.A. 6552 (the “Maceda Law”) and P.D. 957 (for subdivision/condo projects), both of which regulate cancellation and grace periods.
REM (mortgage) is governed by Act 3135 foreclosure rules; the Maceda Law generally does not apply once the transaction is a mortgage (i.e., not a sale on installments).

2) Default and “buyback” in developer-assisted (CTS) accounts

2.1 What “buyback” means

When an end-buyer in a CTS arrangement defaults during the warranty/buyback period, the developer must repurchase (buy back) the delinquent receivable from Pag-IBIG or otherwise assume the account under its agreement with Pag-IBIG. Practically:

The developer regains control of the buyer’s CTS account.
The developer may cancel the CTS for cause (non-payment), subject to statutory grace, notice, and refund rules under the Maceda Law and P.D. 957.
Eviction does not happen automatically. The developer must lawfully cancel the sale first, observe due process, and, if the buyer refuses to vacate, file an ejectment case (unlawful detainer) in the proper first-level court (formerly MTC).

2.2 Grace periods and cancellation under the Maceda Law (CTS scenario)

If you have paid < 2 years of installments:
- You are entitled to a minimum 60-day grace period to pay unpaid installments.
- Cancellation can happen only after the 60-day grace and after you receive a written notice of cancellation 30 days in advance.
If you have paid ≥ 2 years of installments:
- You get a grace period of 1 month for every year of paid installments (to pay unpaid installments without additional interest).
- Upon cancellation, you are entitled to cash surrender value (CSV) of 50% of total payments made, plus 5% per year after the 5th year, capped at 90%.
- You also enjoy a right to reinstate the contract during the grace period without additional interest.

P.D. 957 overlays (subdivision/condo sales): developers must comply with notice and non-forfeiture policies consistent with Maceda Law protections; housing regulators (now DHSUD) may enforce these.

2.3 Eviction after buyback and CTS cancellation

Self-help eviction is illegal. A developer cannot just change locks or remove occupants by force.
If the buyer refuses to vacate after valid cancellation, the developer’s remedy is unlawful detainer—a summary ejectment suit where the court issues a judgment for possession and, if needed, a writ of execution.
Underprivileged and homeless occupants may invoke R.A. 7279 (UDHA) safeguards if a demolition is involved (e.g., 30-day prior notice, presence of authorities, humane conditions). In typical subdivision/condo ejectment (no structure demolition), UDHA’s demolition protocols are less central, but due process and humane conduct still apply.

3) Default and foreclosure in Pag-IBIG retail REM loans (post-takeout)

3.1 When an account is in default

The loan documents define default triggers (e.g., missing three consecutive monthly amortizations, failure to pay taxes/insurance, violating covenants).
Pag-IBIG typically sends demand/notice of default and offers cure options (e.g., catch-up payment, loan restructuring). Program terms evolve, but restructuring/dacion en pago have historically been available.

3.2 Extrajudicial foreclosure under Act No. 3135 (as amended)

Steps, in practice:

Notices per mortgage and law (demand; Notice of Sale with proper posting/publication).
Public auction by the sheriff/notary; highest bidder wins.
Certificate of Sale (COS) issued to purchaser and registered with the Registry of Deeds.
Statutory right of redemption: The mortgagor (borrower) may redeem the property within one (1) year from the date of registration of the COS by paying the purchase price plus allowed charges.
If no redemption within one year: purchaser obtains a final deed/consolidation of ownership; title is transferred to purchaser.
Possession:
- During the 1-year redemption period, the purchaser can seek possession upon filing a bond (writ of possession), though many wait.
- After consolidation, the purchaser is entitled to a writ of possession as a matter of right—issued ex parte (no need for a separate ejectment case against the mortgagor and his/her privies). Third parties claiming adverse title not derived from the borrower may still resist via separate proceedings.

Key contrast: In a CTS (installment) cancellation, the seller/developer must sue for ejectment. In a REM foreclosure, the purchaser at auction can obtain writ of possession from the court without filing ejectment, once conditions are met.

3.3 Deficiency or surplus

If the auction price is less than the total debt, deficiency may be pursued (subject to contract/law).
If more, surplus goes to the borrower after costs.

4) “Grace periods” and cures—what actually exists, by scenario

Scenario	Governing regime	Minimum grace / protection	What stops eviction/foreclosure
CTS with developer (pre-takeout)	Maceda Law (+ PD 957)	<2 data-preserve-html-node="true" yrs paid: 60-day grace; ≥2 yrs paid: 1 month per paid year; CSV refund on cancellation	Pay arrears within grace; invoke reinstatement right; negotiate restructuring with developer
REM with Pag-IBIG (post-takeout)	Act 3135 (foreclosure)	No Maceda-style grace by statute; due process via demand and foreclosure notices; 1-year redemption period after sale	Before sale: settle arrears/restructure; After sale: redeem within 1 year of COS registration; explore dacion/assumption of loan (if allowed)

Practical note: Pag-IBIG has, from time to time, offered Loan Restructuring and Penalty Condonation programs. These are policy-based (not permanent law). If offered, they can pause foreclosure or enable reinstatement upon compliance.

5) Eviction: who can remove you, when, and how

Under CTS (developer buyback): Only after valid cancellation and if you don’t vacate, the developer must file unlawful detainer. Sheriff enforces writ of execution after judgment.
Under REM foreclosure: The auction purchaser (often Pag-IBIG itself) obtains a writ of possession from the RTC having jurisdiction over the property:
- Ex parte issuance after consolidation (or during redemption upon bond).
- Sheriff implements the writ; no self-help lockouts.
UDHA safeguards: Mainly engaged in demolitions of dwellings of underprivileged occupants. In standard turnover of possession by writ, courts still expect humane, orderly enforcement.

6) Special overlays: PD 957, BP 220, HLURB/DHSUD rules

P.D. 957 (Subdivision and Condominium Buyers’ Protective Decree): Requires developers to comply with permits, advertise honestly, and observe buyer protections. Cancellation and forfeiture must respect Maceda Law. Buyers may seek regulatory recourse (now DHSUD) for violations.
B.P. 220 sets minimum standards for socialized/economic housing but does not override foreclosure or Maceda rules.
Association dues / taxes / insurance defaults can be independent breaches under CTS or loan covenants, sometimes accelerating default even if monthly amortization is current.

7) Typical timelines (illustrative, not exhaustive)

CTS path (developer buyback & cancellation):

Payment delinquency → developer buyback triggers under its agreement.
Developer issues demand and starts Maceda Law grace (60 days or 1 mo./year paid).
If still unpaid → 30-day prior notice of cancellation → cancellation.
If buyer stays → unlawful detainer filed → judgment → writ of execution → vacate.

REM path (Pag-IBIG foreclosure):

Delinquency (e.g., 3 months unpaid) → demand/default.
Notice of Sale (posting/publication) → public auction.
Certificate of Sale registered → 1-year redemption runs.
If no redemption → consolidation of title; writ of possession issued → vacate.
- Optional: possession during redemption upon bond.

8) Common borrower options at each stage

Early arrears:
- Ask for catch-up plan or restructuring (both CTS and REM contexts).
- Check for penalty condonation windows (policy-based).
CTS cancellation threat:
- Compute eligibility under Maceda Law (grace, CSV).
- If able, reinstate during grace without additional interest (statutory right).
Pre-auction (REM):
- Settle arrears or effect restructuring to avert sale.
Post-auction (REM):
- Redeem within one year of COS registration (principal + allowed charges).
- Explore dación en pago, assumption of loan, or negotiated turnover if redemption is not viable.
If faced with eviction:
- In CTS cases, contest invalid cancellation (lack of notices/grace or wrong CSV) before or during ejectment.
- In REM cases, defenses to a writ of possession are narrow (generally ministerial after consolidation). Third-party claims with independent title require separate action.

9) Frequently asked questions

Q1: Does the Maceda Law protect me if my Pag-IBIG loan is already a mortgage (REM)? Generally, no. Maceda safeguards are for sales on installments (CTS). Once you’re on a mortgage (title in your name, annotated REM), foreclosure law (Act 3135) governs.

Q2: If my developer bought back my account, can they immediately evict me? No. They must properly cancel the CTS (observe grace + notice) and, if you do not vacate, file ejectment and secure a court judgment/writ.

Q3: How long can I stay after a Pag-IBIG foreclosure sale? There’s a one-year statutory redemption from registration of the Certificate of Sale. Possession can be sought sooner upon bond, but many purchasers wait until after consolidation for an ex parte writ of possession.

Q4: Do I get any money back if my CTS is canceled? If you’ve paid ≥ 2 years, you’re entitled to CSV (50% + 5%/yr after year 5, capped at 90%). If < 2 years, no CSV by law, but you had the 60-day grace and 30-day notice.

Q5: Can Pag-IBIG sue me for any deficiency after auction? Yes, deficiency can be pursued if the auction price is less than the total obligation, subject to the loan terms and defenses available.

10) Checklist for borrowers (and developers)

Borrowers facing trouble

Gather documents: CTS/Deed of Sale, receipts, demand letters, mortgage/loan docs, notices.
Identify your scenario (CTS vs. REM).
Assert Maceda rights if CTS; request restructuring; compute CSV.
If REM: push for restructuring before Notice of Sale; if already sold, calendar the redemption deadline.
Avoid confrontations—no self-help on either side. Keep all communications in writing.

Developers handling buyback/CTS defaults

Audit Maceda compliance: grace computation, 30-day notice of cancellation, CSV computation.
If possession is resisted after cancellation, file unlawful detainer (do not use force).
Coordinate with DHSUD where applicable on buyer complaints.

11) Key legal anchors (for orientation)

R.A. 6552 (Maceda Law) – Grace periods, cancellation, and cash surrender value for installment sales of real estate.
P.D. 957 – Subdivision/condo buyer protections; dovetails with Maceda Law.
Act No. 3135, as amended by Act 4118 – Extrajudicial foreclosure of real estate mortgage; one-year redemption from registration of the Certificate of Sale; writ of possession rules.
R.A. 7279 (UDHA) – Demolition safeguards for underprivileged; humane processes.
Rules on Ejectment (Unlawful Detainer/Forcible Entry) – Summary remedies for possession in first-level courts.

12) Bottom line

“Developer buyback” typically signals a CTS default—expect Maceda Law timelines (grace + notice + CSV) before any ejectment suit.
Pag-IBIG retail (REM) defaults go the foreclosure route: demand → auction → 1-year redemption → writ of possession/eviction.
Eviction is never instant. It follows lawful cancellation (CTS) or foreclosure + writ (REM), with due process at each step.
Act early: restructure or cure when arrears start; after auction, track the redemption clock. When in doubt, consult counsel to audit notices, timelines, and computations against the statutes above.