Published — August 30, 2022
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
After reading “What is the Subdivision and Condominium Buyers Protective Decree (P.D. No. 957)?”, read also “May buyers of a real estate suspend amortization payments?”
-
A subdivision project shall mean a tract or a parcel of land registered under Act No. 496 which is partitioned primarily for residential purposes into individual lots with or without improvements thereon, and offered to the public for sale, in cash or in installment terms.
-
A condominium project shall mean the entire parcel of real property divided or to be divided primarily for residential purposes into condominium units, including all structures thereon.
-
Presidential Decree No. 957 is designed for the welfare of the public and protection from all types of real estate misrepresentations and fraudulent actions.
Decent human settlement with ample opportunities for improving the quality of life is to be afforded to the inhabitants of the State.
With the numerous reports that reveal that many real estate subdivision owners, developers, operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and other similar basic requirements resulting to endangering the health and safety of home and lot buyers, and reports of alarming magnitude that show cases of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles to the buyers or titles free from liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision lots to different innocent purchasers for value, it is imperative that these real estate subdivision and condominium businesses be closely supervised and regulated. Pertinent penalties are, therefore, imposed on fraudulent practices and manipulations connected therewith. (Presidential Decree No. 957, July 12, 1976) Hence, the enactment of this Presidential Decree.
What is a subdivision? The law defines both the terms “subdivision project” and “subdivision lot.”
The law says:
(d) Subdivision project. “Subdivision project” shall mean a tract or a parcel of land registered under Act No. 496 which is partitioned primarily for residential purposes into individual lots with or without improvements thereon, and offered to the public for sale, in cash or in installment terms. (Section 2 (d), Title I, Presidential Decree No. 957, July 12, 1976)
(e) Subdivision lot. “Subdivision lot” shall mean any of the lots, whether residential, commercial, industrial, or recreational, in a subdivision project. (Section 2 (e), Title I, Presidential Decree No. 957, July 12, 1976)
A subdivision project shall include all residential, commercial, industrial and recreational areas as well as open spaces and other community and public areas in the project.
What is a condominium? Similar to the definition of a “subdivision,” the law defines both “condominium project” and “condominium unit.”
The law says:
(g) Condominium project. “Condominium project” shall mean the entire parcel of real property divided or to be divided primarily for residential purposes into condominium units, including all structures thereon. (Section 2 (g), Title I, Presidential Decree No. 957, July 12, 1976)
(h) Condominium unit. “Condominium unit” shall mean a part of the condominium project intended for any type of independent use or ownership, including one or more rooms or spaces located in one or more floors (or part of parts of floors) in a building or buildings and such accessories as may be appended thereto. (Section 2 (h), Title I, Presidential Decree No. 957, July 12, 1976)
In furtherance of closely supervising and regulating real estate subdivision and condominium businesses, the buyer should check on the Certificate of Registration, License to Sell, and HLURB ID or Certificate of Registration for Dealer, Broker, and Salesman, among others.
The registration of both subdivision and condominium projects are stated under the law. As to the registration of subdivisions, the law says:
The registered owner of a parcel of land who wishes to convert the same into a subdivision project shall submit his subdivision plan to the Authority which shall act upon and approve the same, upon a finding that the plan complies with the Subdivision Standards’ and Regulations enforceable at the time the plan is submitted… (Section 4, Title II, Presidential Decree No. 957, July 12, 1976)
As to the registration of condominium units, the law says:
… The same procedure shall be followed in the case of a plan for a condominium project except that, in addition, said Authority shall act upon and approve the plan with respect to the building or buildings included in the condominium project in accordance with the National Building Code. (Section 4, Title II, Presidential Decree No. 957, July 12, 1976)
After the submission of the documentary requirements with the National Housing Authority, which has the exclusive jurisdiction to regulate the real estate trade and business in accordance with this Presidential Decree, (Section 3, Title II, Presidential Decree No. 957, July 12, 1976) the National Housing Authority shall cause the publication of the notice of the filing of the registration. Upon the completion of the publication requirement, the subdivision project or the condominium project shall be deemed registered. (Section 4, Title II, Presidential Decree No. 957, July 12, 1976)
Being issued a certificate of registration, does not, however, authorized such owner or dealer to sell any subdivision lot or condominium unit in the registered project unless he shall have first obtained a license to sell the project within two weeks from the registration of such project.
The law says:
The Authority, upon proper application therefor, shall issue to such owner or dealer of a registered project a license to sell the project if, after an examination of the registration statement filed by said owner or dealer and all the pertinent documents attached thereto, he is convinced that the owner or dealer is of good repute, that his business is financially stable, and that the proposed sale of the subdivision lots or condominium units to the public would not be fraudulent. (Section 5, Title II, Presidential Decree No. 957, July 12, 1976)
Lastly, the registration of dealers, brokers, and salesman is important. No real estate dealer, broker or salesman shall engage in the business of selling subdivision lots or condominium units unless he has registered himself with the National Housing Authority.
The law says:
If the Authority shall find that the applicant is of good repute and has complied with the applicable rules of the Authority, including the payment of the prescribed fee, he shall register such applicant as a dealer, broker or salesman upon filing a bond, or other security in lieu thereof, in such sum as may be fixed by the Authority conditioned upon his faithful compliance with the provisions of this Decree: Provided, that the registration of a salesman shall cease upon the termination of his employment with a dealer or broker.
Every registration under this section shall expire on the thirty-first day of December of each year. Renewal of registration for the succeeding year shall be granted upon written application therefor made not less than thirty nor more than sixty days before the first day of the ensuing year and upon payment of the prescribed fee, without the necessity of filing further statements or information, unless specifically required by the Authority. All applications filed beyond said period shall be treated as original applications.
The names and addresses of all persons registered as dealers, brokers, or salesmen shall be recorded in a Register of Brokers, Dealers and Salesmen kept in the Authority which shall be open to public inspection. (Section 11, Title III, Presidential Decree No. 957, July 12, 1976)
As a decree designed for the welfare of the public and protection from all types of real estate misrepresentations and fraudulent actions, a proper penalty is provided any person who shall violate the provisions of the Presidential Decree.
The law says:
Section 39. Penalties. Any person who shall violate any of the provisions of this Decree and/or any rule or regulation that may be issued pursuant to this Decree shall, upon conviction, be punished by a fine of not more than twenty thousand (P20,000.00) pesos and/or imprisonment of not more than ten years: Provided, That in the case of corporations, partnership, cooperatives, or associations, the President, Manager or Administrator or the person who has charge of the administration of the business shall be criminally responsible for any violation of this Decree and/or the rules and regulations promulgated pursuant thereto. (Section 39, Title IV, Presidential Decree No. 957, July 12, 1976)
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
[email-subscribers-form id=”4″]