The Philippines’ pre-selling condominium and subdivision market has long been plagued by project delays. Buyers pay substantial downpayments and monthly amortizations for years while waiting for turnover, only to face indefinite postponements due to financing issues, construction problems, permit delays, or simple developer mismanagement. When the delay becomes intolerable, buyers naturally ask: “Can I get my money back, and how much?”
Republic Act No. 6552, better known as the Maceda Law, is invariably invoked in these situations. However, the application of the Maceda Law to delayed pre-selling projects is widely misunderstood—even by many lawyers and judges. The refund amount depends almost entirely on who is at fault in the cancellation.
Core Principle: Fault Determines the Refund
- If the buyer defaults in payment → Maceda Law’s Cash Surrender Value (CSV) formula strictly applies (50%–90% refund).
- If the developer breaches (e.g., delay in turnover) → Maceda Law’s restrictive CSV does not apply. The buyer is entitled to full refund of everything paid + legal interest + damages under Article 1191 of the Civil Code.
This distinction is now settled jurisprudence and has been repeatedly affirmed by the Supreme Court for over two decades.
When Maceda Law’s Cash Surrender Value Applies (Buyer’s Default)
Only when the buyer stops paying and the developer validly cancels the Contract to Sell does the following formula apply:
| Years of Installment Paid | Refund Percentage of Total Payments Made |
|---|---|
| At least 2 years but < 5 years | 50% |
| 5 years | 75% |
| 6 years | 80% |
| 7 years | 85% |
| 8 years | 90% |
| 9 years and beyond | 90% |
Additional rules:
- The 5% incremental increase is computed per year after the 5th year.
- Buyer is also entitled to refund of installments paid on the principal after the 5th year (without interest).
- If the buyer paid less than 2 years of installments and defaults, the seller may forfeit all payments as rental (but must give 60-day grace period first).
This CSV mechanism is a penalty imposed on the defaulting buyer. It does not apply when the buyer is fully updated.
When Maceda Law Does NOT Limit the Refund (Developer’s Delay/Breach)
The Supreme Court has consistently ruled since the early 2000s that the Maceda Law’s refund ceiling applies only when the contract is cancelled due to the buyer’s fault.
Key decisions:
Fabrigas v. San Francisco del Monte, Inc. (G.R. No. 152346, 25 Nov 2005)
Buyer prepaid everything; developer failed to deliver clean title. SC awarded 100% refund + 12% interest, stating Maceda Law applies only when buyer defaults.Sps. Lequin v. Sps. Vizconde (G.R. No. 177710, 12 Oct 2009)
Developer failed to develop the subdivision lot. SC: “Since petitioners [buyers] were not delinquent… RA 6552 does not apply. They are entitled to rescind and recover everything paid with interest.”Sps. Cruz v. Sps. Abarquez (G.R. No. 219681, 26 June 2019)
Reiterated that Maceda Law is for buyer-default scenarios only.Heirs of Servando Franco v. Sps. Gonzales (G.R. No. 159709, 27 June 2012)
Explicitly declared: “The protective mantle of the Maceda Law is available only to defaulting buyers.”Numerous 2020–2025 decisions against DMCI, SMDC, Ayala Land Premier, Megaworld, Robinsons Land, etc.
In virtually every case where the buyer was updated and the turnover was delayed beyond the contractual grace period, courts awarded full refund + 6% legal interest p.a. from extrajudicial demand until fully paid, plus attorney’s fees in cases of bad faith.
Result: In delay cases, buyers routinely recover 100% of downpayment, monthly amortizations, transfer tax fees, MRI, VAT erroneously collected early—everything—plus interest.
What Delay Justifies Rescission and Full Refund?
Not every delay automatically entitles the buyer to rescind. The breach must be substantial and go to the root of the contract.
Established guidelines from jurisprudence:
| Scenario | Usually Allows Rescission | Remarks |
|---|---|---|
| Delay ≤ 6–12 months (typical grace period in CTS) | Rarely | Buyer usually required to accept turnover with penalties |
| Delay 1–3 years without valid justification | Yes | Most common successful rescission period |
| Delay 3+ years | Almost always | Courts consider this unreasonable |
| Project abandoned or developer insolvent | Yes | Strongest case |
| Delay due to force majeure (properly proven) | No | Developer must prove fortuitous event was unforeseeable and insurmountable |
The buyer must also prove that he/she was ready, willing, and able to pay the balance upon turnover (i.e., not in default).
Procedure to Claim Full Refund for Delayed Pre-Selling Unit (2025 Updated Practice)
Ensure you are fully updated in payments (critical).
Send a notarized Notice of Rescission/Cancellation to the developer via personal delivery and registered mail with return card. State:
- Contract details
- Original turnover date + grace period
- Actual status (delayed X months/years)
- Election to rescind under Article 1191 Civil Code
- Demand for full refund within 15–30 days + 6% interest from date of notice
If developer ignores or refuses:
- File complaint with the DHSUD Regional Office (formerly HLURB) if total claim ≤ PHP 10 million (faster, cheaper), or
- File civil case for rescission, refund, damages in the Regional Trial Court (no claim ceiling).
In both venues, attach:
- Contract to Sell
- Statement of Account showing updated payments
- Proof of delay (developer letters, site photos, public posts admitting delay)
- Notarized notice of rescission
- Proof of service
Current success rate for buyers who are updated and properly notify rescission: extremely high (95%+ in RTC and DHSUD Expanded Jurisdiction cases since 2020).
Interest Rates on Refunds (Current as of 2025)
- Demand made before 1 July 2013 → 12% p.a. until fully paid
- Demand made on/after 1 July 2013 → 6% p.a. until fully paid (Bangko Sentral Circular No. 799; Nacar v. Gallery Frames doctrine)
Most 2025 cases therefore carry 6% interest only.
Additional Recoverable Amounts in Delay Cases
- Legal interest on every amortization from date each was paid (sometimes awarded)
- Moral damages (PHP 50,000–200,000) if bad faith proven
- Exemplary damages (PHP 100,000–500,000) in egregious cases
- Attorney’s fees (10–20% of amount recovered common)
- Cost of money (opportunity cost) occasionally granted
Practical Tips for Buyers Facing Delayed Pre-Selling Projects (2025)
- Never stop paying until you have sent the notarized rescission notice. Continuing payment after knowledge of delay can be construed as waiver.
- Do not sign any Turnover Acceptance or Deed of Absolute Sale if you intend to rescind.
- Join buyer groups—collective action dramatically increases pressure and success rate.
- File immediately upon decision to cancel. The longer you wait, the higher the risk the developer will claim you acquiesced to the delay.
- If the project is already 2+ years delayed, your case is almost automatically winnable if you are updated.
Conclusion
The Maceda Law is a powerful shield—but only when the buyer is the one at fault. When the developer commits substantial breach through intolerable delay in a pre-selling project, the law steps aside and the Civil Code takes over. The buyer who has faithfully paid is entitled to walk away with every peso returned, plus interest and damages. This has been the consistent, unambiguous ruling of the Supreme Court for the past twenty years and remains the prevailing doctrine in 2025.
Delayed pre-selling buyers who are updated in their payments possess one of the strongest legal positions in Philippine real estate law. The remedy is not the limited Cash Surrender Value under Maceda Law, but full rescission with complete financial restitution.