For buyers of preselling houses, lots, and condominium units in the Philippines, delays in construction or turnover can be stressful and costly. This article gathers the key rules, rights, remedies, and practical steps—so you can decide quickly and act with confidence.

1) Core Legal Framework

1.1 Civil Code of the Philippines

Obligations and delay (mora): A developer who fails to deliver within the time agreed is in default once demand is made, or without demand when the contract or law makes the due date controlling (day certain).
Remedies for breach (Art. 1191): The aggrieved party may choose rescission (cancellation) or specific performance, in both cases with damages.
Damages (Arts. 2200–2209, 2217, 2229, 2208): Actual/compensatory, moral, exemplary, and attorney’s fees; legal interest may be imposed on sums due.
Penalty (Arts. 1226–1230): If the contract sets liquidated damages, courts/tribunals generally enforce them, subject to reduction if unconscionable.
Fortuitous events (Art. 1174): A developer is excused only if the cause was independent, unforeseeable or unavoidable, and no negligence concurred.

1.2 Presidential Decree No. 957 (Subdivision and Condominium Buyers’ Protective Decree)

Requires a Certificate of Registration and License to Sell before offering units; binds developers to the approved plans, timelines, and representations.
Protects buyers against non-development and non-completion; authorizes administrative sanctions, including suspension or revocation of permits and penalties.
Often invoked to seek refunds, interest, and damages when a developer fails to complete or turn over as promised.

1.3 Condominium Act (RA 4726)

Governs creation and turnover of condominium projects, common areas, and master deeds; emphasizes delivery consistent with the approved plans and Certificate of Completion/Occupancy.

1.4 Realty Installment Buyer Act (RA 6552, “Maceda Law”)

Primarily protects installment buyers who default, granting grace periods and, in certain cases, cash surrender values.
While it focuses on buyer default, its concepts often appear in negotiations or rescission scenarios involving long-running delays (e.g., parties agree to treat the sale as canceled and compute a refund by analogy). Where PD 957 offers stronger protection against developer delay, buyers typically rely on PD 957 and the Civil Code.

1.5 Institutional Jurisdiction

Human Settlements Adjudication Commission (HSAC) (adjudicatory functions spun off from the former HLURB): Handles buyer complaints vs. developers for violations of PD 957 and related rules.
DHSUD (policy/permits) and LGU Building Officials (permits, occupancy).
Regular courts: Civil actions for rescission/specific performance/damages, enforcement of or challenge to arbitration clauses, and execution of judgments.
Arbitration/mediation: Many Contracts to Sell (CTS) or Reservation Agreements have arbitration clauses. These may govern forum, but cannot waive statutory buyer protections under PD 957/Civil Code.

2) When Is the Developer “Delayed”?

2.1 Contractual dates

Check the Reservation Agreement, CTS/Deed of Sale, and project disclosures (brochures, emails may evidence representations).
Identify: construction completion date, target turnover date, and any grace period or force majeure extensions.

2.2 Permits and deliverables

Occupancy/Completion Certificates and punch-list readiness are typical prerequisites to turnover.
For condos, turnover includes exclusive possession and access to common areas fit for use.

2.3 Notices and demands

Delay (mora) generally begins upon demand (written demand strongly recommended).
Demand is not required if the obligation states that time is of the essence or the law so provides; still, sending a formal demand letter is best practice to fix default and interest.

2.4 Force majeure and “excusable delays”

Valid only for truly unforeseeable events with causal link to the delay and no contributory negligence. Supply chain issues, regulatory processing, or weather common to the season are often foreseeable and thus not excusable unless specifically covered and proven.

3) Buyer’s Remedies: What You Can Ask For

3.1 Specific performance (compel completion/turnover)

Order to finish construction or turn over the unit as contracted, often with:
- Contractual liquidated damages for each day/month of delay.
- Interest on amounts paid (commonly 6% per annum legal interest from demand on sums due).
- Actual damages (e.g., rent for alternative housing), if proven.
- Attorney’s fees when justified.

3.2 Rescission/Cancellation with refund

Return of the purchase price/paid installments, plus interest.
Liquidated damages/penalty, if stipulated, or actual/moral/exemplary damages if warranted.
Return of miscellaneous fees (association dues collected in advance, transfer/processing fees) when the purpose failed.
Note: Where parties mutually rescind, they should settle taxes/fees implications (e.g., documentary stamp/VAT entries) and ensure cancellation of liens and annotation reversals.

3.3 Price reduction or reformation

If the unit can be delivered but with material deviations (smaller floor area; specifications downgraded), you may seek proportionate price reduction, rectification, or damages.

3.4 Administrative sanctions vs. developer

Complaints to HSAC/DHSUD may result in fines, permit suspensions, or orders compelling compliance—useful leverage in settlement.

4) Money Computations You’ll Commonly See

4.1 Liquidated damages

If the CTS states, for example, “₱X per day of delay,” compute from the contractual turnover date (plus any valid grace period) until actual turnover/acceptance or rescission. Tribunals may reduce an excessive penalty.

4.2 Legal interest

6% per annum (simple) is commonly applied:
- On refunds/amounts due: from date of demand (or filing) until full payment.
- On adjudged amounts: from finality of decision until satisfaction.

4.3 Actual damages

Rent you paid because your unit wasn’t delivered; storage/transfer costs; higher loan interest due to delayed take-out. Keep receipts and leases.

5) Evidence Checklist (Build Your File)

Reservation Agreement, CTS/Deed, project brochures/ads, email/SMS/viber updates.
Proof of payments (ORs, bank statements), financing approvals.
License to Sell, development timetable, and official notices (developer memos on delays).
Demand letters with proof of service (registered mail, courier, email headers).
Inspection photos, third-party engineer reports, punch-list.
Lease agreements/receipts for substitute housing, transport/storage invoices.

6) Forums & Procedure

6.1 Demand and negotiation

Send a formal demand: (a) call out breach; (b) elect a remedy (specific performance with penalties or rescission with refund); (c) set a firm deadline; (d) reserve rights to damages and fees.

6.2 File a case

HSAC complaint (PD 957 route): Suitable for statutory violations and buyer protection remedies; may be faster and specialized.
Civil action in RTC: For rescission/specific performance/damages, larger claims, or where execution on assets/third parties is anticipated.
Arbitration: If the CTS mandates it, you may start there—without waiving PD 957 protections.

6.3 Criminal/administrative angles

PD 957 provides penal provisions for certain violations; DHSUD/HSAC can impose administrative sanctions. These do not replace your civil remedies but can spur compliance.

7) Common Developer Defenses—And How They’re Assessed

Force majeure: Must be proved, not merely asserted. Developer must show the event caused the delay and that reasonable diligence couldn’t have avoided the impact.
Contractual extension clauses: Enforceable if clear, reasonable, and not unconscionable; one-sided “indefinite” extensions are vulnerable.
Buyer’s own delay (payments/documents): Developers often argue no turnover due to buyer’s unpaid balances or missing loan take-out requirements. Cure this by full compliance or documenting that loan take-out failed because the project itself wasn’t ready.
Acceptance/punch-list signed: Acceptance under pressure or before occupancy permits can be challenged; note exceptions/defects in writing.

8) Prescription (Deadlines to Sue)

Written contracts (rescission/specific performance/damages): 10 years from breach or last relevant act.
Injury to rights/quasi-delict (e.g., independent tort): generally 4 years.
Administrative complaints under PD 957: typically aligned with the written contract prescriptive period in practice. File early—memories fade and documents get lost.

9) Practical Playbook

Step 1: Audit the paperwork. Create a single timeline of promised vs. actual dates and payments.

Step 2: Send a calibrated demand.

Option A: Specific performance + (i) per-day penalty (if any) or legal interest; (ii) actual damages (rent); (iii) deadline (e.g., 15 days).
Option B: Rescission + full refund with interest, penalty/LD, and damages.

Step 3: Preserve evidence. Keep receipts, emails, site photos, and punch-lists. Avoid oral-only agreements.

Step 4: Choose forum wisely. Consider HSAC for specialized buyer-protection and courts/arbitration if contract or strategy favors it.

Step 5: Negotiate with numbers. Prepare a clean computation sheet: total paid, LD/interest, rent, net claim on rescission or completion.

Step 6: Paper the settlement. If you settle:

Define new completion/turnover date with automatic penalties if missed.
Provide escrow/retention for remaining defects.
Set mode and date of refund or price reduction if applicable.
Cover title/annotation issues and association dues start date.
Include mutual releases upon full compliance.

10) Model Demand Letter (Outline)

Subject: Demand for [Completion/Turnover OR Rescission and Refund] – [Project/Unit] From/To: Buyer / Developer Facts: Identify project, unit, contract dates, payments, and promised turnover date(s). Breach: State that the developer failed to complete/turn over as of [date]. Rights: Cite the contract, PD 957/Civil Code, and any penalty clause. Demand:

Option A (Specific Performance): Complete and turn over within [X] days; pay LD/interest and reimburse rent of ₱[amount].

Option B (Rescission): Cancel the sale and refund ₱[total paid] + interest; pay LD/attorney’s fees. Deadline: [e.g., 15 calendar days from receipt]. Reservation: All rights reserved; failure will result in filing with HSAC/court/arbitration.

11) FAQs

Can I stop paying while the project is delayed? Risky unless legally justified or ordered by a tribunal. Non-payment can be treated as buyer default. Seek written agreement or interim relief.
Do I need a lawyer? Not mandatory to send demand, but highly recommended for filing in HSAC/court or negotiating substantial settlements.
What if the unit is delivered but defective? You may accept with reservations, list punch-list items, and pursue repair, price reduction, or damages.

12) Key Takeaways

Time commitments in preselling are enforceable.
Your main forks: (a) Force completion with compensation, or (b) Cancel and collect refunds + damages.
Document everything, demand in writing, and choose the right forum.
Liquidated damages and legal interest often drive settlement outcomes.
Force majeure is narrow; developers must prove it and their due diligence.

Gentle disclaimer

This article is a general guide, not legal advice. Facts vary widely by contract, timeline, and evidence. For a high-stakes move (rescission, large claims), consult counsel to tailor strategy, numbers, and forum selection.