Presidential Decree No. 957, Section 23 — “Non-Forfeiture of Payments”
Comprehensive Guide to Delayed Property Turn-over in Philippine Real-estate Practice (2025 update)

1. Statutory setting

PD 957 (the Subdivision and Condominium Buyers’ Protective Decree) was issued on 12 July 1976 to curb abuses in the pre-sale of subdivision lots and condominium units and to give buyers a speedy, administrative remedy outside the regular courts (Condo Contract Cancellation under PD 957). The decree remains good law and is now implemented by the Department of Human Settlements and Urban Development (DHSUD) and its adjudicatory arm, the Human Settlements Adjudication Commission (HSAC), which replaced the old HLURB in 2020.

2. Exact text of Section 23

Section 23. Non-Forfeiture of Payments. —
*“No installment payment made by a buyer in a subdivision or condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the owner or developer to develop the… project according to the approved plans and within the time limit for complying with the same. *Such buyer may, at his option, be reimbursed the total amount paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate.” (PD 957: Subdivision and Condominium Buyers' Protective Decree)

3. Elements that trigger the remedy

Element	Practical meaning
Failure to develop/turn-over on time	The project is not completed or unit not delivered within the period stated in the license to sell or in Section 20’s 1- to 4-year timetable as fleshed out by the 2015 HLURB “Time-of-Completion” Rules (B.R. 926-2015, MC 16-03-2016, now carried over by DHSUD D.O. 2021-009) ([PDF] Revised Implementing Rules and Regulations for PD 957 - DHSUD, [PDF] DEPARTMENT ORDER NO. 2021-009 Series of 2021 - DHSUD)
According to approved plans/specs	Material deviations, missing amenities, or downgraded finishes fall here (Sec. 18 PD 957).
Due notice	The buyer must first write the developer, identify the breach, and state that payments will stop if the breach is not cured; failure to give notice can defeat a later refund claim (case law below).

4. Two powerful buyer options

Suspend future instalments – and wait until the project is finished. The Supreme Court treats this as a statutory grace mechanism and not as a breach by the buyer (e.g., Relucio v. Brillante-Garfin, G.R. 76518, 16 July 1990). (Urban Exam - Subdivision Development 1 Flashcards | Quizlet)
Rescind & demand full refund – The buyer may walk away and recover 100 % of everything paid (reservation fees, down-payment, amortisations, plus contractual interest), legal interest now fixed at 6 % p.a. from date of demand under Nacar v. Gallery Frames doctrine; delinquency interest, if any, is excluded. See Spouses Ronquillo v. Fil-Estate (G.R. 185798, 22 Jan 2014) where the Court affirmed a ₱2.19 M refund plus 6 % interest and moral damages. (G.R. No. 185798)

5. How “legal interest” is computed today

Period covered	Applicable rate
Payments made before 1 July 2013	12 % p.a. (old Central Bank rate)
Payments from 1 July 2013 onward	6 % p.a. per BSP-MB Circ 799 & Nacar

The interest runs from the buyer’s written demand, not from filing of the complaint. Developers sometimes argue that only the principal must be refunded; Ronquillo rejects that position.

6. Administrative enforcement toolbox

Agency	What it can do
HSAC (formerly HLURB Adjudication)	Original & exclusive jurisdiction over refund, rescission, damages, specific performance, and broker liability.
DHSUD – Regulatory	May suspend the licence to sell, issue cease-and-desist orders, and impose administrative fines up to ₱10 000 per violation (Sec. 38 PD 957) (G.R. No. 185798).
Regular courts	Criminal prosecution under Sec. 38; execution of HSAC awards; related civil actions vs. third parties (banks, contractors).

Basic HSAC flow: (i) complaint → (ii) mediation → (iii) adjudication → (iv) appeal to DHSUD Secretary → (v) CA → (vi) SC. HSAC decisions are immediately executory unless enjoined.

7. Notice & procedure checklist for buyers

Gather proof: contract, brochure, licence-to-sell number, promised turnover date.
Send “demand-and-stop-payment” letter (keep courier proof).
If no satisfactory action in 15 days: file HSAC complaint with (a) demand for rescission or specific performance, (b) refund/damages, (c) prayer for CDO & fine.
Attend mandatory mediation; if no settlement, adjudication proceeds.
On winning: move for writ of execution; sheriff may garnish developer’s bank deposits or annotate the rescission on the project title/condo CCTs (RA 4726).

8. Interplay with other buyer-protective statutes

Law	When it kicks in	Interaction
Maceda Law (RA 6552)	Developer cancels because buyer defaults	PD 957 is lex specialis for condos/subdivisions; Maceda’s 50 – 90 % refund formula applies only when it is the developer who cancels.
Civil Code Art. 1191	Cash sales, or breaches outside PD 957 timeline	Subsidiary; invoked when buyer still wants the unit but with damages.
Condominium Act (RA 4726)	Annotation of rescission/refund orders	PD 957 remedies must be recorded on both the master title and derivative CCTs.

9. Leading Supreme Court decisions that shape Section 23

Case	Gist
Relucio v. Brillante-Garfin, G.R. 76518 (1990)	Upheld buyer’s right to stop payments once developer default is shown; interest component of instalments recognised. ([Urban Exam - Subdivision Development 1 Flashcards
Casa Filipina Realty v. OP, G.R. 155453 (2004)	Affirmed HLURB’s power to order refund and damages; notice requirement deemed satisfied by buyers’ letters.
Fil-Estate v. Spouses Go, G.R. 165164 (2007)	Asian financial crisis not a caso fortuito excuse for delay; refund with interest ordered.
Spouses Ronquillo v. Fil-Estate, G.R. 185798 (2014)	Applied Section 23; fixed legal interest to 6 % p.a.; moral and attorney’s fees granted. (G.R. No. 185798)
Tagaytay Realty v. Gacutan, G.R. 160033 (2015)	Clarified that HSAC jurisdiction covers both monetary and non-monetary relief under PD 957.

10. Penalties & corporate exposure for developers

Administrative fines: up to ₱10 000 per breach; each unpaid refund order is a separate count.
Suspension/Revocation of license to sell – freezes further marketing and collection.
Criminal liability: officers may be imprisoned 2 – 10 years for willful violations (Sec. 39 PD 957).
Contractual exposure: interest, actual and moral damages, plus attorney’s fees (as Ronquillo confirms).

11. Tips for buyers facing delayed turn-over (2025)

Document everything – screenshots of marketing promises, chat transcripts, progress photos.
Send the notice early – interest stops accruing only after formal demand.
Check the licence-to-sell expiry on DHSUD’s public registry; an expired LTS bolsters your case.
Consider group action – HSAC allows consolidation; collective bargaining increases leverage.
Be mindful of tax refunds – VAT and DST paid on a rescinded sale can be claimed within 2 years.

12. Current regulatory trend

DHSUD Department Order 2021-009 reaffirmed that the 2015 Time-of-Completion Rules remain in force, tightening extensions and requiring progress reports with geotagged photos every six months; failure to file triggers automatic ₱10 000/day administrative fines ([PDF] DEPARTMENT ORDER NO. 2021-009 Series of 2021 - DHSUD). In 2024, HSAC also began e-filing and virtual mediation, cutting average refund cases from 18 to 10 months.

13. Bottom line

Section 23 is the buyer’s “nuclear option” when a pre-sold house, lot or condominium is hopelessly delayed. It freezes instalments, bars forfeiture, and — after notice — lets the buyer walk away with every peso back, plus interest and damages. Because the procedure is administrative, relief is faster and cheaper than a full-blown court suit, and developers face real regulatory pain if they stonewall. For practitioners, mastery of Section 23, the 2015 Completion Rules, and recent HSAC jurisprudence is now indispensable in Philippine real-estate work.