1) The legal landscape: what laws matter

When a buyer stops paying or decides to cancel a pre-selling condominium purchase, the outcome is usually governed by a mix of:

R.A. 6552 (Maceda Law) – protects buyers of certain real estate on installment who default or cancel, by granting grace periods, notice requirements, and (in many cases) cash surrender value/refund rights.
P.D. 957 (Subdivision and Condominium Buyers’ Protective Decree) – regulates developers and protects buyers in the sale of subdivision lots and condominium units (including pre-selling), including obligations on advertising, licensing, delivery, and fairness of practices.
Civil Code principles on contracts – especially rules on perfection of contracts (consent, object, price), interpretation, rescission/cancellation, damages, and unjust enrichment.
Condominium Act (R.A. 4726) – the legal framework for condominium projects (not the refund statute, but relevant background).
Regulatory rules and dispute forums – chiefly the housing regulator (now under DHSUD functions for condominium/subdivision disputes), which commonly handles refund/cancellation complaints involving developers.

The big practical question is: Does the Maceda Law apply even if you never signed a Contract to Sell (CTS)? Answer: It can, depending on what your documents and payment history show.

2) Maceda Law in plain terms (what it protects)

2.1 Who is protected

Maceda Law generally protects a buyer who:

Is buying residential real property (commonly accepted to include condo units intended for dwelling), and
Is paying on an installment basis, and
Has made payments and later defaults or seeks to discontinue.

It is designed to prevent developers/sellers from quickly forfeiting what buyers have paid, especially after substantial payment history.

2.2 What protections it gives

Maceda Law’s core protections include:

Grace periods to pay arrears without losing the unit.
Mandatory cancellation procedure (including notarial notice) before the seller can validly cancel.
Refund / cash surrender value for buyers who have paid long enough (typically 2 years or more) before cancellation/forfeiture becomes effective.
In some cases, rights to sell/assign the buyer’s rights (subject to contract terms and reasonable conditions), and rights to reinstate under the law’s framework.

3) The “no signed CTS” problem: does Maceda Law still apply?

3.1 Why the absence of a signed CTS is not the end of the analysis

Many pre-selling transactions start with:

a Reservation Agreement / Reservation Application / Buyer’s Information Sheet, and then
a stream of payments (reservation fee, downpayment installments, “equity,” monthly installments) evidenced by official receipts.

Even if a formal CTS was never signed, the law may still recognize that the parties had a binding installment arrangement based on:

the developer’s acceptance of payments,
payment schedules given to you,
receipts showing the unit, project, buyer name, and account,
emails/messages approving terms,
a “Statement of Account,” “Computation Sheet,” “Payment Schedule,” or “Disclosure” documents,
your acts consistent with a purchase (KYC forms, buyer’s docs, loan takeout processing).

In Philippine contract law, a contract can be perfected by consent even without the “final” document you expected—though real estate developers typically insist on signed forms for clarity and compliance. Legally, what matters is whether there was meeting of minds on the object (specific unit) and price/payment terms, and whether the arrangement is in substance an installment sale/contract to sell relationship.

3.2 Practical legal consequences of having no signed CTS

The “no CTS” situation often falls into one of these buckets:

Bucket A — Reservation only (thin paperwork, minimal payment). If you only paid a reservation fee and never moved into an installment structure (no equity/downpayment installments accepted beyond what the reservation form contemplated), the developer will usually argue it is not an installment sale covered by Maceda. Refund rights may then depend on:

the reservation agreement terms,
whether the fee is truly “reservation” or effectively part of price,
fairness issues (e.g., misleading sales representations),
developer’s fault (delayed license, project issues, noncompliance).

Bucket B — Installment payments were accepted (equity/downpayment installments), but CTS was not signed. This is where Maceda Law is most likely to be invoked. If the developer accepted multiple installments toward the unit price, it looks like an installment purchase relationship regardless of the missing CTS—especially if documents identify the unit and show payment schedule.

Bucket C — Developer failed/refused to issue CTS or delayed it, while collecting payments. A buyer may argue the developer should not benefit from its own omission to avoid refund obligations, and regulators often examine the substance over form—particularly where consumer protection and housing regulations are involved.

4) The key pivot: how long you have paid (under Maceda)

Maceda Law draws a major line at “at least two (2) years of installments paid.” Your rights differ sharply depending on which side you fall.

4.1 If you paid less than 2 years of installments

You generally have:

(1) A grace period of at least 60 days from the due date of the missed installment to pay without cancellation.

This is a statutory grace period concept for short payment histories.

(2) Seller cannot validly cancel without a proper cancellation process (commonly discussed as requiring a notarial notice and a waiting period before cancellation becomes effective).

Even where the buyer has short payment history, cancellation is not supposed to be “instant” or purely internal.

Refund expectation (common reality): Maceda’s famous cash surrender value is clearly guaranteed for 2 years or more. For under 2 years, developers often treat payments as forfeitable, subject to contract terms, penalties, and lawful cancellation procedure. However, you may still have refund arguments depending on:

whether payments exceed reasonable damages,
whether the developer is the one in breach (e.g., licensing, misrepresentation, noncompliance),
whether the “reservation/downpayment” was represented as refundable,
unfair contract terms or unconscionable forfeiture.

4.2 If you paid 2 years or more of installments

This is the Maceda “refund” zone.

You generally have:

(1) A longer grace period:

One (1) month grace period for every one (1) year of installments paid, exercisable only once every five (5) years of the contract’s life (as commonly applied).

(2) A statutory right to a cash surrender value (refund) if the contract is cancelled:

At least 50% of total payments made.
After 5 years of installments, an additional 5% per year may apply, but the total cash surrender value is capped (commonly described as up to 90%).

(3) A strict cancellation procedure before forfeiture/cancellation becomes effective:

The seller must serve a notarial notice of cancellation/demand and observe the statutory waiting period associated with that notice before the cancellation is effective.

Important: Developers sometimes try to re-label payments as “reservation,” “processing,” “documentation,” or “marketing” fees to reduce the refund base. Substantively, if the payments were part of the price to acquire the unit (equity, downpayment installments, monthly installments), they are typically treated as payments made for purposes of computing cash surrender value—subject to disputes about truly separate fees.

5) What counts as “installments paid” and “total payments made” in pre-selling condos

5.1 Common payment components in pre-selling

Reservation fee
Downpayment / “equity” installments
Monthly amortizations during pre-selling
Balloon payments
Fees labeled as: admin fee, doc fee, processing fee, membership fee, move-in fee (more common in rent-to-own schemes), VAT allocation, etc.

5.2 Typical disputes on computation

A. Is the reservation fee part of “total payments made”?

Developers often treat it as separate and non-refundable by contract.
Buyers argue it is effectively part of purchase consideration if it was credited to the price or required to secure the unit and followed by installment payments.

B. Are “admin/doc/processing” fees refundable?

If they are genuinely separate services (e.g., loan processing actually done) they may be treated differently than price payments.
If they function mainly as disguised forfeiture, they can be challenged as unfair/unconscionable depending on facts.

C. Are penalties/interest deductible from cash surrender value?

A seller may claim contractual deductions, but statutory minimum protections are designed to prevent the refund from being defeated by excessive charges. The enforceability of deductions depends on the contract terms, proof of damages, and fairness review.

6) The cancellation process: what must happen for a valid forfeiture/cancellation

6.1 Why “cancellation” is often legally defective

A frequent buyer complaint is that the developer:

stopped sending statements,
tagged the account as cancelled internally,
resold the unit,
forfeited payments, without serving the required formal notice.

Maceda’s structure is meant to stop exactly that. The seller is generally expected to:

Provide the statutory grace period (depending on years paid).
If unpaid after grace, serve a notice of cancellation/demand by notarial act.
Observe the statutory waiting period after the notarial notice before cancellation becomes effective.
If buyer is entitled to cash surrender value (2+ years), pay the refund as part of the cancellation consequences.

6.2 Why this matters even without a signed CTS

Even if the developer claims “no CTS, therefore no Maceda,” once they accepted installments and treat you as a buyer-account, they often still follow (or should follow) a legally compliant cancellation process. A missing CTS can also cut against the developer if it was their responsibility to issue contract documents while collecting money.

7) Pre-selling condo specifics: interplay with P.D. 957

7.1 P.D. 957 as a buyer-protection overlay

P.D. 957 is frequently invoked when:

the project has licensing/registration issues,
the developer’s advertisements were misleading,
turnover is delayed beyond what was represented,
the developer’s practices are oppressive (e.g., blanket forfeiture without due process).

Even when Maceda is disputed due to paperwork gaps, P.D. 957 arguments may support:

refunds due to developer fault,
rescission based on breach or misrepresentation,
administrative sanctions and compliance orders.

7.2 Common real-world scenario

Buyer pays reservation + equity installments for many months. Developer delays CTS signing, or says CTS will be signed “later.” Buyer later cancels. Developer says “no CTS, so no refund.”

Regulators and courts typically look at:

whether the unit and price were clearly identified,
whether the payment scheme is installment-based,
whether the developer accepted and receipted payments toward purchase,
whether the developer complied with housing regulations and fair dealing.

8) What you can do in practice: asserting refund rights (without assuming a signed CTS)

8.1 Assemble proof that this was an installment purchase relationship

Collect:

reservation agreement/application (even if short),
all official receipts,
payment schedule/computation sheet,
statement of account,
emails/SMS/Chat with agent or developer confirming unit, price, payment terms,
screenshots of developer portal entries showing account status,
any “buyer’s undertaking,” “sales proposal,” or “project brochure” representations.

These are crucial because your strongest “no CTS” argument is: The relationship was an installment purchase in substance; Maceda applies.

8.2 Frame your position clearly

Depending on payment length:

If 2+ years installments paid: Demand recognition of cash surrender value and proper cancellation mechanics; dispute forfeiture; require notarial notice compliance.
If under 2 years: Focus on defective cancellation process, unfair forfeiture, and any developer fault (licensing, misrepresentation, delays, noncompliance). Refund claims are more fact-driven here.

8.3 Beware of “voluntary cancellation forms” that waive rights

Developers sometimes offer a “mutual cancellation” or “quitclaim” with minimal refund (or none). Signing broad waivers can weaken Maceda/P.D. 957 claims, especially if it states:

you waive statutory rights,
payments are forfeited “in full satisfaction,”
you release the developer from all liabilities.

A waiver’s enforceability depends on wording, voluntariness, and public policy considerations—but it is a major practical risk.

9) Common developer positions—and how they are typically countered

9.1 “Maceda does not apply because there is no signed CTS”

Counterpoints often raised:

A contract may be proven by conduct and documents (payments accepted, unit identified, schedule agreed).
Developer should not be allowed to evade statutory protections by withholding the formal contract while collecting installments.
Even if the formal CTS is missing, the arrangement functions as an installment purchase and should be treated accordingly.

9.2 “Those payments are just reservation/admin fees, not installments”

Counterpoints:

If payments were credited to price/equity and required to keep the unit, they are price payments in substance.
Labels do not control if the economic reality is installment purchase.

9.3 “We can forfeit immediately upon default”

Counterpoints:

Statutory grace periods and notarial notice requirements exist to prevent immediate forfeiture/cancellation.
Cancellation done without the required process may be challenged.

10) Where disputes are usually filed (Philippine context)

Refund/cancellation disputes involving developers of condominium projects are commonly brought before the housing regulator’s adjudicatory mechanisms (functions now under DHSUD and related structures). Depending on the claim, other venues can include:

civil courts for damages/rescission,
other administrative remedies where unfair trade practices are implicated (fact-dependent).

Venue choice depends on:

whether you’re asserting Maceda statutory benefits,
whether P.D. 957 violations are central,
the amount and nature of damages,
urgency (e.g., preventing resale/transfer of the unit).

11) Scenario guide: what your rights usually look like

Scenario 1: Paid only reservation fee; no further installments

Maceda is often disputed because there may be no “installment” purchase yet.
Refund depends heavily on the reservation agreement and fairness/developer fault factors.

Scenario 2: Paid reservation + several months of equity/downpayment installments; no CTS signed

Strong argument that this is an installment purchase relationship.
If 2+ years of installments were paid: strong Maceda refund posture (cash surrender value).
If under 2 years: focus on procedural defects, fairness, and developer breach/misrepresentation.

Scenario 3: Paid 2+ years of installments; developer tags you “cancelled” without notarial notice

Strong procedural challenge; cancellation/forfeiture can be attacked as defective.
Cash surrender value claim is typically central.

Scenario 4: You want to cancel because the developer failed obligations (delay, licensing issues, misrepresentations)

P.D. 957 and contract-law remedies become powerful; refund may be argued as due to developer breach rather than buyer default, improving prospects even when Maceda is contested.

12) Practical drafting points for a cancellation/refund demand (content, not a template)

A solid written demand typically:

Identifies the unit/project, buyer details, and payment history.
States that payments were accepted under an installment purchase arrangement (attach receipts).
Invokes applicable protections: Maceda (grace period/notice/cash surrender value if eligible) and/or P.D. 957 (if developer fault is involved).
Objects to forfeiture without statutory process (especially notarial notice).
Demands computation and release of the legally due refund (if 2+ years) and a written accounting of deductions claimed.

13) Key takeaways

No signed CTS does not automatically eliminate refund rights. If the developer accepted installment payments toward a specific unit under an agreed schedule, Maceda protections may still be argued based on substance and evidence.
The 2-year threshold is pivotal.
- 2+ years installments paid: statutory cash surrender value (minimum refund) becomes the main right.
- Under 2 years: refund is more contract/fairness/developer-fault dependent, but cancellation still must follow lawful procedure.
Proper cancellation is not “instant.” Maceda’s framework requires grace periods and a formal notice route before effective cancellation/forfeiture, and refund obligations where applicable.
P.D. 957 matters a lot in pre-selling. If the developer is at fault (licensing, misrepresentation, project issues), refund and rescission arguments strengthen—even where Maceda is contested.

14) General legal note

This article is for general informational purposes in the Philippine context and is not a substitute for legal advice on specific facts and documents.