Here’s a practitioner-friendly legal article on Installment Buyer Default Remedies under the Maceda Law (Republic Act No. 6552)—tailored to the Philippine context and written to be used by HR/Legal, developers, brokers, and buyers. No web sources used, per your request.

Installment Buyer Default Remedies under the Maceda Law (Philippines)

1) Purpose and scope of the Maceda Law

What it is: RA 6552 (the “Maceda Law”) is a buyer-protection statute for sale or financing of real estate on installment. It sets minimum mandatory remedies for buyers who default.
Covered property: Residential real property, including subdivision lots and condominium units, sold or financed on installment.
Common exclusions (practice): The statute is widely applied to residential sales; industrial/commercial properties are typically outside its intended coverage. Government housing may have separate rules. (Contract labels don’t control; the residential use and installment structure do.)
Non-waiver: Rights under RA 6552 are statutory minimums. Any contract clause that waives or reduces them is void. Parties may improve (give more than) these rights but not give less.

2) The two default regimes: < 2 years paid vs. ≥ 2 years paid

A) Buyer has paid less than two (2) years of installments

Remedy: A one-time grace period of at least 60 days to pay installments due (without additional interest during the grace period).

If the buyer fails to pay within the 60-day grace, the seller may cancel the contract only after a 30-day notarial notice of cancellation is received by the buyer.
Refund: No mandatory cash surrender value (CSV) at this tier (unless your contract or policy grants one).

B) Buyer has paid at least two (2) years of installments

Remedies (minimum):

Grace period to reinstate: One (1) month grace per year of installments paid, without additional interest, to update the account.
- Example: 3 years paid ⇒ 3 months grace to pay installments then due.
- Usable only once every five (5) years of the contract term (see §6).
Cash Surrender Value (CSV) on cancellation: If the buyer chooses to cancel (or the seller cancels after due process), the buyer is entitled to a refund of not less than 50% of total installments paid; plus an additional 5% per year of installments paid after five (5) years, capped at 90% total CSV.
- What counts as “installments paid”: Includes downpayments, deposits, and the value of installments actually paid; commonly excludes default penalties and interest.
- Payment timing: CSV is to be paid within 30 days from cancellation.
Alternative to cancellation: During the grace window, the buyer may reinstate by paying amounts due (no interest during the grace period), or assign/sell rights to a qualified buyer (see §5).

3) Notarial notice & cancellation mechanics (strict compliance)

Compute grace period (60 days if <2 data-preserve-html-node="true" years paid; 1 month per year if ≥2 years paid).
Allow grace (no additional interest during grace; penalties stop accruing for the covered period).
If still in default, serve a Notarial Notice of Cancellation/Rescission, giving the buyer 30 days from receipt.
- The notice must be notarized and actually received (delivery proof matters).
- Cancellation is effective after the 30th day from receipt.
If eligible for CSV, pay the refund within 30 days from cancellation.
Update title/possession only after valid cancellation and, where applicable, CSV payment.

Practice tip (for sellers): Keep time-stamped proofs—grace period letter, courier or personal service logs, notarized notice, and buyer’s acknowledgment/receipts.

4) Calculating the Cash Surrender Value (CSV)

Base rule for ≥2 years paid

CSV = 50% of Total Installments Paid
Plus 5% per year of installments paid beyond the 5th year, capped at 90% overall.

Worked examples (illustrative):

Example 1 (3 years paid):
- Total paid = ₱600,000
- CSV = 50% × 600,000 = ₱300,000 (no 5% add-on yet)
Example 2 (7 years paid):
- Total paid = ₱1,400,000
- Base 50% = ₱700,000
- Add-on years = years beyond 5 = 2
- Add-on = (5% × 2 = 10%) × 1,400,000 = ₱140,000
- CSV = ₱700,000 + ₱140,000 = ₱840,000
Example 3 (very long-term, hitting cap):
- Total paid = ₱2,000,000
- 50% = ₱1,000,000; suppose 12 years paid → add-on = 7 years × 5% = 35%
- Theoretical CSV = 85% → ₱1,700,000; (still below 90% cap)
- If computation ever exceeds 90%, use 90% cap.

What to include in “Total Installments Paid”:

Include: downpayment, monthly amortizations, valid deposits credited to price.
Exclude: penalty charges, late interest, taxes/fees not part of the price (unless your contract treats them as price components and they were actually paid). When in doubt, itemize and compute both ways; favor the statutory minimum.

5) Other buyer options (besides CSV)

Reinstatement during grace: Buyer may update dues within the grace period without additional interest (for that period) and resume the contract.
Assignment: Buyer may sell/assign rights to a qualified assignee before effective cancellation (subject to developer’s reasonable qualification/transfer fees).
Prepayment: Buyer may prepay the balance or advance installments (often with interest savings) and demand the corresponding deed or title releases per contract.

6) “Once every five years” rule

The grace-period remedy (to update without added interest) may be exercised only once in every five (5) years of the life of the contract.
Counting: Start from contract effectivity; a second use within the same 5-year block may be refused.
CSV rights (when ≥2 years paid) remain available upon valid cancellation, separate from the once-every-5-years limit.

7) Interaction with contract terms, interest, and penalties

No additional interest during grace: The statute bars additional interest during the grace period used to update dues. Regular interest resumes after the grace window.
Penalties/late charges: Typically suspend for the grace period covered; they cannot defeat statutory remedies.
Acceleration clauses: Enforceable after statutory remedies and notarial cancellation are observed.
Better-than-law clauses: Developers may offer longer grace, higher CSV, or restructuring; these are valid and bind the seller.

8) Possession, improvements, and forfeiture issues

Possession: Buyer remains in possession until valid cancellation becomes effective; afterward, seller may demand turnover and pursue ejectment if needed.
Improvements: Permanent improvements made by the buyer are not separately compensated under RA 6552 unless the contract says so; they merge with the property.
Forfeiture: For <2 data-preserve-html-node="true" years paid, amounts previously paid may be retained absent a contractual refund; but a seller must still comply with the 60-day grace + 30-day notarial notice before cancellation. For ≥2 years paid, seller cannot keep more than the price minus the CSV owed.

9) Procedural checklist

For Sellers/Developers

Audit account: payments to date, years paid, arrears, prior use of grace in last 5 years.
Compute remedies:
- If <2 data-preserve-html-node="true" years paid: give 60-day grace.
- If ≥2 years paid: compute grace = 1 month/year paid; compute CSV (for potential cancellation).
Serve grace letter (optional but best practice) stating amounts due and the exact grace window.
If default persists: Notarial Notice of Cancellation; ensure actual receipt; calendar 30 days.
At cancellation:
- If CSV due, pay within 30 days; secure release/quitclaim acknowledging CSV receipt (not a waiver of future statutory rights).
- Recover possession amicably or file ejectment if needed.
Update books: cancellation entry, refund proof, title/annotation status.

For Buyers

Count your years paid (include downpayment and all installment months).
Check prior grace use in last 5 years; if none, demand the statutory grace to update dues without additional interest.
If cancellation looms and you have ≥2 years paid, choose:
- Reinstate within grace; or
- Take CSV (request computation and payment within 30 days from cancellation); or
- Assign your contract to a third party (before cancellation).
Document receipt dates of notices; keep proof of payments; dispute improper computations in writing.

10) Model documents (copy-ready)

A) Grace Period Advice (Buyer ≥2 years paid)

Subject: Grace Period to Update Installments (RA 6552) Dear [Buyer], Our records show total installments paid equal to [X years, Y months]. Under RA 6552, you are entitled to a grace period of [__] months to update the installments due without additional interest during said period. Amount to update: ₱[amount]. Grace period: [start date] to [end date]. Please visit [payment center] or contact [officer]. Sincerely, [Seller]

B) Notarial Notice of Cancellation (after grace; all tiers)

NOTARIAL NOTICE OF CANCELLATION/RESCISSION To: [Buyer] Pursuant to the Maceda Law (RA 6552) and your continued default despite the applicable grace period, take notice that thirty (30) days from your receipt of this notice, the [Contract to Sell/Installment Sale] over [Property] shall be cancelled. If you have paid at least two (2) years of installments, you are entitled, in case of cancellation, to a cash surrender value computed under RA 6552. [Seller/Notary details and jurat]

C) CSV Computation Sheet

Total installments paid (downpayment + installments): ₱[A]
Base CSV (50% × A): ₱[B]
Add-on years beyond 5: [n] years × 5% × A = ₱[C]
CSV (min) = ₱[B + C] (capped at 90% × A)
Payable on or before: [30th day from cancellation]

11) Edge cases & clarifications

Balloon or stepped payments: Count all amounts paid toward price in the CSV base; the rate/timing of payments doesn’t reduce statutory percentages.
Buyers with heavy penalties already charged: CSV is calculated from installments actually paid, not from net of penalties collected. Penalties aren’t added to CSV but cannot be used to reduce the base paid to price.
Developer-offered restructuring: Permissible and often practical; it supplements the statute, cannot undermine it.
Title already transferred: If buyer already fully paid and holds title, Maceda no longer applies; remedies shift to mortgage/loan or contractual frameworks.
Death of buyer: Heirs succeed to statutory rights; notices should be served to estate/last known address and co-buyers, if any.
Association dues/taxes: These are usually outside the CSV base unless the contract treats them as part of the purchase price and they were actually capitalized.

12) Quick reference table

Situation	Grace Period	CSV Right	Notice Required
< 2 years installments paid	60 days (one-time)	None (statutory)	30 days notarial notice before cancellation
≥ 2 years installments paid	1 month per year paid (once every 5 years)	Yes: 50% of paid + 5%/yr after 5 yrs (max 90%)	30 days notarial notice before cancellation; CSV within 30 days after cancellation

13) Practical “do’s and don’ts”

Sellers

Do track years paid to avoid under-granting grace/CSV.
Do use notarial notices with proof of receipt.
Don’t net CSV against unliquidated claims without buyer’s written conformity (beyond amounts clearly permitted by contract/law).
Don’t rely on “automatic cancellation” clauses; statutory steps prevail.

Buyers

Do calendar your grace window and update within it to avoid cancellation.
Do request a CSV computation in writing if you opt to cancel or accept cancellation.
Don’t ignore notarial notices—receipt date starts the 30-day clock.
Don’t assume penalties erase your CSV—they don’t.

Bottom line

Under the Maceda Law, an installment buyer who defaults gets time to cure and, after two years of payments, a refund of a substantial portion of what was paid if the contract is cancelled—but only after proper grace periods and a 30-day notarial notice. Contracts may improve these minimums, but cannot undercut them. Correct calculation, timely notices, and clear documentation make or break enforceability for both sides.