Remedies for Defects in New Condominium Units in the Philippines

Last updated: October 19, 2025 (Philippine context). This is general information, not legal advice.

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When a newly turned-over condo unit has construction or finishing defects, Philippine law gives you multiple, overlapping paths to relief—contract, statute, and regulatory. You can pursue: (1) repair or correction, (2) price reduction (quanti minoris), (3) rescission/refund in serious cases, and/or (4) damages. Venue may be negotiation, DHSUD/HSAC (the housing regulator’s adjudicatory arm), CIAC arbitration (for construction disputes), the regular courts, and, for unsafe structures, the Office of the Building Official (OBO).

Legal framework (core sources)

Civil Code on Sales (Arts. 1547, 1561–1571) Implied warranties—including against hidden defects that render the thing unfit or substantially diminish its fitness. Buyer remedies: rescission or price reduction, plus damages in proper cases.
Civil Code on Builders’/Design Liability (Art. 1723) Architects/engineers/contractors are liable if, within 15 years from completion, a building collapses or suffers ruin due to defect in design, construction, or materials. Action must be brought within 10 years from the collapse/ruin. (This chiefly covers major structural defects.)
PD 957 (Subdivision and Condominium Buyers’ Protective Decree) and RA 4726 (Condominium Act) Developers must deliver according to approved plans/specifications and their license to sell. DHSUD (formerly HLURB) regulates and the Human Settlements Adjudication Commission (HSAC) hears buyer–developer disputes, with powers to order repairs, refunds, rescission, damages, and administrative sanctions.
PD 1096 (National Building Code) and IRR The Building Official can require correction/abatement for unsafe or non-compliant works; may suspend occupancy permits.
General Civil Code remedies Breach of contract (Art. 1170 et seq.), abuse-of-rights and tort (Arts. 19, 20, 21), quasi-delict (Art. 2176).
EO 1008 (CIAC Charter) The Construction Industry Arbitration Commission has original jurisdiction over construction disputes—often used by condo corporations vs developers/contractors for common-area defects; sometimes invoked by buyers when their claims arise from or are closely tied to a construction contract.

What counts as a “defect”?

Patent defects: obvious at turnover (e.g., chipped tiles, misaligned doors, leaks visible during inspection).
Latent/hidden defects: not discoverable by ordinary inspection at turnover but later manifest (e.g., concealed plumbing leaks, slab deflection, waterproofing failure).
Non-conformity to plans/specs: floor area shortfall beyond acceptable tolerance, different materials/finishes than advertised/approved.
Major structural defects / ruin: those implicating safety, stability (potential Art. 1723 territory).
Code violations: breaches of PD 1096, fire code, electrical/plumbing code standards.

Your primary remedies

1) Repair or correction

First-line remedy and often required under turnover/warranty clauses (many contracts give 30–365 days “defects liability” for punch-listed items).
Demand must specify defects and reasonable time to cure. Failure to repair timely can justify escalation to price reduction, rescission, and/or damages.

2) Price reduction (accion quanti minoris)

For defects that diminish value or utility but do not justify rescission.
Compute reduction based on cost-to-cure, loss of usable area, diminished market value, or non-conforming specs.

3) Rescission/refund (redhibition)

For substantial defects rendering the unit unfit or where the developer’s breach defeats the purpose of the sale (persistent water ingress, material floor-area shortage, pervasive MEPF failures).
Typically paired with return of the price plus incidental damages (moving/storage, interest).

4) Damages

Actual (repair costs, professional fees, alternative housing during repairs), moral/exemplary in cases of bad faith, attorney’s fees when justified.
For structural ruin under Art. 1723, damages may be sought from responsible professionals and contractor(s).

Where to go (forums and jurisdiction)

DHSUD/HSAC complaint For buyer–developer disputes under PD 957/Condo Act: non-conforming delivery, refusal to repair, misrepresentation, refund. Proceedings are streamlined and specialized.
CIAC arbitration For disputes arising from construction (e.g., condo corp vs developer/contractor over common-area defects, waterproofing failures). If your contract has a construction arbitration clause, CIAC likely has jurisdiction.
Regular courts For complex damages claims, torts, or when arbitration/regulatory routes don’t fit, or to enforce/appeal regulatory orders.
Office of the Building Official (OBO) If the defect is unsafe or code-noncompliant (e.g., firestopping absent, structural cracking), file a complaint/inspection request. The OBO can issue notices of violation, require remedial works, or suspend occupancy.
Mediation/ADR Many developers offer internal punchlist desks and mediation. If productive, it’s the fastest path to repairs/refunds.

Prescription (deadlines) & timelines

Missing a deadline can bar your claim. Track both contractual and statutory clocks.

Hidden defects in sale (Civil Code Arts. 1561–1571) Actions prescribe in 6 months from delivery for redhibition/quanti minoris (unless seller acted in bad faith; then general prescriptive periods and damages may apply).
Breach of written contract: 10 years from breach.
Quasi-delict (tort): 4 years from discovery of the injury/defect.
Art. 1723 (major structural ruin/defect): Defects leading to collapse/ruin within 15 years from completion: responsible professionals/contractor may be liable; sue within 10 years from the collapse/ruin.
Regulatory complaints (HSAC): File within reasonable time; earlier is better to align with warranty periods and to preserve evidence.

Contracts often contain a “defects liability period” (e.g., 12 months) for workmanship and materials. This does not erase statutory rights but may set practical windows for free repairs before you shift to price reduction/damages.

Strategy: how to proceed (step-by-step)

Document immediately
- Create a dated punchlist: per room, itemized; photos/videos; moisture readings; levelness/flatness; thermal/infrared where available.
- Keep copies of turnover report, contract to sell/deed, brochures, approved plans and specs, as-builts, occupancy permit, and any service tickets.
Send a formal demand
- Cite contract, PD 957/Civil Code, and attach punchlist.
- Give a firm cure period (e.g., 10–15 working days for minor items; staged plan for major works).
- Reserve rights to price reduction/rescission/damages if uncured.
Allow reasonable access—but control it
- Schedule works; require method statements for invasive repairs; insist on protection of finishes and post-repair testing (water ponding tests for bathrooms/balconies; pressure tests for plumbing).
Escalate smartly
- No action or poor repairs? File with HSAC for specific performance/refund/damages.
- Structural or widespread common-area issues? Coordinate with the condo corp/HOA; consider CIAC vs developer/contractor.
- Unsafe conditions? Lodge a complaint with the OBO for code enforcement.
Preserve expert evidence
- Commission a licensed civil/structural engineer or architect report; for water issues, include building envelope/waterproofing specialist.
- Keep chain-of-custody for material samples if deterioration or inferior materials are suspected.

Typical scenarios & tailored remedies

Leaking bathroom/kitchen; hollow floor tiles; poor waterproofing → Demand removal and reinstallation to spec; require flood/ponding tests after cure; claim alternative lodging if unit is uninhabitable during repairs; seek price reduction if repeated failures.
Window wall/curtain wall water ingress; balcony leaks into lower unit → Likely common-area interface: coordinate with condo corp; escalate to CIAC for systemic façade defects; OBO if code non-compliance jeopardizes safety.
Floor area shortfall / non-conforming materials → Quanti minoris based on market value per sqm or rescission if shortfall is material; rely on approved plans and advertised specs as benchmarks.
Major structural distress (shear cracks, deflection, column issues) → Immediate OBO notification; independent structural assessment; preserve Art. 1723 claims; consider temporary evacuation if advised.
Defective MEPF (electrical/plumbing/HVAC) causing damage → Repair plus consequential damages (e.g., damaged furniture); if systemic in common areas, route via condo corp and possibly CIAC.

Evidence & valuation toolkit

Before/after photos and videos with timestamps.
Moisture meter readings; thermal imaging for leaks/insulation gaps.
Laser level/straightedge for flatness and plumb.
Water ponding test results; pressure tests for plumbing.
Independent quantity surveyor (QS) estimate for cost-to-cure.
Broker valuation or appraiser report for diminution in value.
Communications log: dates of complaints, responses, site visits.

Working with the condo corporation (common areas)

Many leak and structural issues originate in common areas (roof deck, exterior walls, shafts). The condo corp (unit owners’ association) owns/controls these and is ordinarily the proper party to demand systemic remediation. Actions the board can take:

Aggregate unit owners’ complaints into a defects register.
Commission a forensic building audit.
Issue a board demand to the developer/contractor under the turnover deed; if refused, file CIAC arbitration or HSAC complaint depending on contracts and issues involved.
Secure interim measures (e.g., injunction to prevent unit turnovers into unsafe areas).

Money claims: how to compute

Cost-to-cure (labor + materials + access + redecoration).
Alternative accommodation if unit is unusable during repairs.
Loss of rent for investors; substantiate with listings/leases.
Diminution in value (persistent stigma, subpar specs).
Incidental expenses (testing, consultant fees, storage, transport).
Interest (legal or stipulated) from the date of demand.

Practical defenses you may face (and how to respond)

“Out of warranty.” → Contractual 1-year defect periods don’t extinguish statutory rights (Civil Code, PD 957).
“You modified the unit.” → Modifications causing the defect can bar recovery; but unrelated developer defects remain actionable—document causation.
“Force majeure.” → Only applies to unforeseeable events; poor workmanship/materials are not force majeure.
“You didn’t allow access.” → Keep a repair calendar and show you offered reasonable access/time windows.

Sample outline: demand letter

Heading and parties (buyer and developer details; unit, building, TCT/CTRS).
Statement of facts (turnover date; inspection/punchlist; subsequent findings).
Defects list (numbered, with photos annexed).
Legal basis (contract clauses; PD 957; Civil Code Arts. 1561–1571; 1170; 1723 where applicable).
Remedies sought: repair plan/timeline or price reduction/rescission; damages; inspection/testing at developer’s cost.
Deadline (e.g., 10 working days to respond; 30 days to complete repairs for minor items; staged plan for major).
Notice of escalation to HSAC/CIAC/OBO if unmet.
Reservation of rights.

Frequently asked questions

Q: Do I have to accept repairs instead of a refund? A: Not always. For significant defects or repeated failed repairs, the Civil Code allows rescission or price reduction, plus damages.

Q: The developer says leaks are from my fit-out. A: Obtain an independent engineer’s report to trace source; if leaks come from slabs/shafts/common areas, direct the claim via the condo corp and/or CIAC.

Q: How fast should I act? A: Immediately—send written notice upon discovery. Track the 6-month window for hidden-defect actions, and keep general 4-year/10-year prescriptions in mind depending on theory of liability.

Q: Can I stop paying remaining installments or association dues? A: Stopping payments can expose you to default; consult counsel about set-off or filing for rescission with provisional relief instead.

Quick checklists

Owner’s initial kit

Contract to sell/deed, annexes, plans/specs
Turnover documents/punchlist
Photos/videos; moisture/level checks
Demand letters and replies
Independent engineer/QS report (if needed)

When to escalate immediately

Safety risks (electrical, structural, gas) → OBO and management
Repeated failed repairs; non-response to written demands → HSAC/CIAC
Widespread/common-area failures → Condo corp action

Closing notes

Begin with clear documentation and a firm, written demand.
Choose the forum that fits your case (HSAC for buyer–developer disputes, CIAC for construction/common-area claims, OBO for safety/code issues, courts for broader damages).
Don’t let prescription and contractual timelines lapse.
Independent technical reports often decide outcomes—budget for them early.

If you want, I can draft a tailored demand letter or a HSAC complaint outline based on your unit’s facts and your contract.