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Contract Termination of the purchased Unit (Subdivision Unit in Cavite)

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Arresto Menor
Hi to all!

Here's the story.

We got a unit from a Developer that just recently had their own free media mileage because of IMBESTIGADOR.

Jan 2011 we start paying D.P. for the unit for 24 months period. The promise was the turnover will be after 15th month of DP.

We were scheduled for our 1st inspection last August 2012. This time is way beyond the suppose turnover time of 15th month after DP. We found several non-conformances vs blueprints and we notify them about the findings.

We are then scheduled for 2nd inspection last October 2012 and found the same non-conformances. They corrected some of the defects but the majority of the findings were still there.

Now, next month will be our 24th month of DP and we assume that they still not going to correct the findings we raised.

We learned some time in September 2012 that the unit was already taken out by the bank (Bank Financing) last mid of August 2012 without us knowing. But since the unit was not yet turned over to us, the developer assume the balance payment to the bank in excess to the monthly downpayment that we are giving to them. They did this probably to bind us to the unit since the bank already paid them. Though on the Letter of Guarantee of the Bank it states that the unit shall only be taken out if it is 100% completed.

1. Am I entitled to full refund since the unit's delivery time was delayed and because of faulty/defective unit at hand?

2. If not, am I protected under Maceda Law even the unit was already taken out by the Bank?

3. Can I terminate the contract and stop the payment to the bank while the case is on going (just in case)?

pasensya na po medyo mahaba. sana may makapansin. paunang pasasalamat sa inyo!

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for sure, they will not voluntarily refund your money. in my opinion, these are just casual breaches because they are correctible.

i recommend you accept the unit with reservation that they will fix the problems, and if they refuse, you can file a complaint at hlurb

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Arresto Menor
thanks for the reply atty!

what if i opt to terminate the contract because of the delay and faulty unit? Because if they intend to fix the problem, they should have done the correction na. It's the same problem as the other home owners experienced with this developer, they accepted the unit but up until now more and more problems are arising. That's the dilemma that we don't want to experience further..

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Arresto Menor
up ko lang po. salamat!

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Reclusion Perpetua
Question 1. Am I entitled to full refund since the unit's delivery time was delayed and because of faulty/defective unit at hand?
Answer: If your contract is contract to sell, you cannot rescind the contract but there is restitution of the amount you paid and demand for damages. This requires court proceedings. You ask the court for damages because of breach of contract and violation of warranties of the seller.
If your contract is one of contract of sale, then you can rescind the contract and ask for the full amount plus damages with interest.

Question 2. If not, am I protected under Maceda Law even the unit was already taken out by the Bank?

Answer: There are two conditions that must exist if Maceda law shall apply.
1. If you pay continously of more than 2 years
2. If you receive a letter of cancellation from the seller.
If these two are present, you are protected but you are entitled to only half the price. From the facts, since you just paid less than two years. Maceda law will not apply.

Question no 3 is answered by Answer 1.

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Arresto Menor
maraming salamat po shad marasigan!

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