In the Philippine real estate market, one of the most common grievances of unit buyers is the prolonged delay in the issuance and delivery of the Condominium Certificate of Title (CCT). While the Sales Leaseback or Contract to Sell provides the initial framework for the purchase, the CCT is the ultimate proof of ownership. When a developer fails to deliver this document within the period prescribed by law, buyers have specific legal remedies under Philippine jurisdiction.
The Statutory Basis: PD 957
The primary law governing this issue is Presidential Decree No. 957, also known as the Subdivision and Condominium Buyers' Protective Decree. Under Section 25 of PD 957, the issuance of the title is a mandatory obligation of the developer:
Section 25. Issuance of Title. The owner or developer shall deliver the title of the lot or unit to the buyer upon full payment of the lot or unit.
This mandate is absolute. The law does not provide for "reasonable delays" beyond the point of full payment. Once the buyer has settled the purchase price, the developer is legally bound to process and hand over the CCT.
Administrative Oversight: DHSUD
The Department of Human Settlements and Urban Development (DHSUD), which took over the functions of the Housing and Land Use Regulatory Board (HLURB), is the quasi-judicial body with primary jurisdiction over these disputes.
If a developer fails to comply with Section 25, the buyer may file a verified complaint with the DHSUD for Specific Performance. This legal action seeks to compel the developer to:
- Complete the registration of the Master Deed.
- Secure the individual CCT from the Registry of Deeds.
- Deliver the title to the buyer.
Key Legal Remedies and Rights
1. Suspension of Payments
Under Section 23 of PD 957, a buyer has the right to desist from further payment of installments if the developer fails to develop the project according to the approved plans or within the time limit.
- Note: Before suspending payments, the buyer should ideally notify the DHSUD and the developer in writing to avoid being declared in default.
2. Refund of Total Amount Paid
If the developer is unable to deliver the unit or the title due to failure in project completion, Section 23 also grants the buyer the right to be reimbursed the total amount paid, including amortization interests but excluding delinquency interests, with interest at the legal rate.
3. Administrative Fines and Penalties
The DHSUD has the authority to impose administrative fines on developers for every day of delay. In some cases, if the developer's license to sell is violated, the department can order the suspension or revocation of that license.
The Role of the Mortgage
A frequent cause for delayed CCTs is when the developer mortgages the entire condominium project to a bank without the buyer's knowledge or the DHSUD's approval.
- Section 18 of PD 957 prohibits any mortgage on any unit or lot by the owner/developer without prior written approval from the DHSUD.
- If an unauthorized mortgage exists, the developer is still obligated to "redeem" the specific unit's title so it can be transferred to the buyer upon full payment.
Steps to Take for Legal Action
| Step | Action | Purpose |
|---|---|---|
| 1 | Demand Letter | Send a formal, notarized demand letter to the developer giving a final 15-30 day window to deliver the CCT. |
| 2 | Verification | Check with the Registry of Deeds to see if the CCT has already been issued or if the mother title is encumbered. |
| 3 | Mediation | File a request for mediation at the DHSUD Regional Office to reach an amicable settlement. |
| 4 | Verified Complaint | If mediation fails, file a formal complaint for Specific Performance and Damages. |
Recovery of Damages
In addition to the delivery of the title, buyers may pray for:
- Moral Damages: If the developer acted in bad faith or with gross negligence.
- Exemplary Damages: To set a public example against such practices.
- Attorney's Fees: To cover the costs of litigation.
While the administrative process through the DHSUD is designed to be faster than traditional court litigation, it remains a formal legal proceeding. Buyers are protected by the principle that the "Contract to Sell" is not just a private agreement but a transaction imbued with public interest, ensuring that the dream of homeownership is not indefinitely deferred by corporate delay.